<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JANUARY 26, 1996
REGISTRATION STATEMENT NO. 33-64811
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------
AMENDMENT NO. 2
TO
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
--------------
BRADLEY REAL ESTATE, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
MARYLAND 6798 04-6034603
(STATE OR OTHER (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
JURISDICTION CLASSIFICATION CODE) IDENTIFICATION NO.)
OF INCORPORATION OR
ORGANIZATION)
699 BOYLSTON STREET
BOSTON, MA 02116
(617) 867-4200
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICE)
--------------
E. LAWRENCE MILLER
PRESIDENT AND CHIEF EXECUTIVE OFFICER
BRADLEY REAL ESTATE, INC.
699 BOYLSTON STREET
BOSTON, MA 02116
(617) 867-4200
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
COPIES TO:
WILLIAM B. KING, P.C. EDWARD J. SCHNEIDMAN, ESQ.
JOSEPH L. JOHNSON III, ESQ. STUART M. LITWIN, ESQ.
GOODWIN, PROCTER & HOAR MAYER, BROWN & PLATT
EXCHANGE PLACE 190 S. LASALLE STREET
BOSTON, MA 02109-2881 CHICAGO, IL 60603-3441
(617) 570-1000 (312) 782-0600
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: Upon
consummation of the merger of Tucker Properties Corporation with and into
Bradley Real Estate, Inc. pursuant to an Agreement and Plan of Merger dated as
of October 30, 1995 described in the enclosed Joint Proxy Statement/Prospectus.
If the securities being registered on this Form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box. [ ]
--------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THIS REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(A), MAY DETERMINE.
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- --------------------------------------------------------------------------------
<PAGE>
BRADLEY REAL ESTATE, INC.
CROSS-REFERENCE SHEET
PURSUANT TO RULE 404(A) OF REGULATION C AND ITEM 501(B) OF REGULATION S-K
SHOWING THE LOCATION IN
THE JOINT PROXY STATEMENT/PROSPECTUS OF THE INFORMATION REQUIRED BY PART I OF
FORM S-4.
<TABLE>
<CAPTION>
LOCATION OR HEADING IN
ITEM OF FORM S-4 JOINT PROXY STATEMENT/PROSPECTUS
---------------------------- -------------------------------------------
<C> <S> <C>
A. INFORMATION ABOUT THE
TRANSACTION
1. Forepart of Registration
Statement and Outside Front
Cover Page of Prospectus... Facing Page of Registration Statement;
Outside Front Cover Page of Joint Proxy
Statement/Prospectus
2. Inside Front and Outside
Back Cover Pages of
Prospectus................. Available Information; Incorporation of
Documents by Reference; Table of Contents
3. Risk Factors, Ratio of
Earnings to Fixed Charges
and Other Information...... Outside Front Cover Page of Joint Proxy
Statement/Prospectus; Summary; Risk
Factors; The Companies
4. Terms of the Transaction.... Summary; The Merger; The Merger Agreement;
Comparison of Stockholder Rights
5. Pro Forma Financial
Information................ Summary; Unaudited Pro Forma Combined
Financial Statements
6. Material Contracts with the
Company Being Acquired..... Summary; The Merger; The Merger Agreement
7. Additional Information
Required for Reoffering by
Persons and Parties Deemed
to be Underwriters......... *
8. Interests of Named Experts
and Counsel................ Summary; The Merger; Legal Matters; Experts
9. Disclosure of Commission
Position on Indemnification
For Securities Act
Liabilities................ *
B. INFORMATION ABOUT THE
REGISTRANT
10. Information with Respect to
S-3 Registrants............ Available Information; Incorporation of
Documents by Reference; The Companies
11. Incorporation of Certain
Information by Reference... Available Information; Incorporation of
Documents by Reference
12. Information with Respect to
S-2 or S-3 Registrants..... *
13. Incorporation of Certain
Information by Reference...
*
14. Information with Respect to
Registrants Other Than S-3
or S-2 Registrants......... *
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
LOCATION OR HEADING IN
ITEM OF FORM S-4 JOINT PROXY STATEMENT/PROSPECTUS
------------------------------ -------------------------------------------
<C> <S> <C>
C. INFORMATION ABOUT THE COMPANY
BEING ACQUIRED
15. Information with Respect to
S-3 Companies................ Available Information; Incorporation of
Documents by Reference; The Companies
16. Information with Respect to S-
2 or S-3 Companies........... *
17. Information with Respect to
Companies Other Than S-2 or
S-3 Companies................ *
D. VOTING AND MANAGEMENT
INFORMATION
18. Information if Proxies,
Consents or Authorizations
are to be Solicited.......... Outside Front Cover Page of Joint Proxy
Statement/Prospectus; Available
Information; Incorporation of Documents
by Reference; Summary; The Merger; The
Meetings of Stockholders; Stockholder
Proposals
19. Information if Proxies,
Consents or Authorizations
Are Not to be Solicited, or
in an Exchange Offer......... *
</TABLE>
- --------
* Item is omitted because answer is negative or Item is inapplicable.
<PAGE>
BRADLEY REAL ESTATE, INC.
699 BOYLSTON STREET
BOSTON, MASSACHUSETTS 02116
January , 1996
Dear Stockholder:
You are cordially invited to attend a Special Meeting of Stockholders of
Bradley Real Estate, Inc. ("Bradley") to be held at 10:00 a.m., Eastern time,
on February , 1996, at , Boston, Massachusetts (the "Special Meeting").
At the Special Meeting, you will be asked to approve the merger of Tucker
Properties Corporation ("Tucker") with and into Bradley (the "Merger") and the
Agreement and Plan of Merger, dated as of October 30, 1995 (the "Merger
Agreement"), by and between Bradley and Tucker, pursuant to which, among other
things, each outstanding share of Tucker common stock will be converted into
the right to receive a percentage of a share of Bradley common stock to be
determined as follows. If the average per share closing price of Bradley
common stock for the 20 trading days prior to the fifth day preceding the
closing of the Merger is $16.00 or more, each share of Tucker common stock
will be exchanged for .665 of a share of Bradley common stock. If such average
closing price is between $15.50 and $16.00, the exchange ratio will be
determined by dividing $10.64 by the average closing price. If such average
closing price is $15.50 or less, the exchange ratio will be .686 of a share of
Bradley common stock. Approval of the Merger and the Merger Agreement requires
the affirmative vote of the holders of a majority of the outstanding shares of
Bradley common stock.
YOUR BOARD OF DIRECTORS BELIEVES THAT THE MERGER IS FAIR TO, AND IN THE BEST
INTERESTS OF, BRADLEY AND ITS STOCKHOLDERS. THE BOARD HAS UNANIMOUSLY APPROVED
THE MERGER AND THE MERGER AGREEMENT AND UNANIMOUSLY RECOMMENDS THAT YOU VOTE
TO APPROVE THE MERGER AND THE MERGER AGREEMENT.
The accompanying Joint Proxy Statement/Prospectus provides detailed
information concerning the proposed Merger, the reasons for your Board of
Directors' recommendation of the Merger and the Merger Agreement and certain
additional information, including, without limitation, the information set
forth under the heading "Risk Factors," which describes, among other items,
potential adverse effects to stockholders as a result of the Merger. We urge
you to carefully consider all of the information in the Joint Proxy
Statement/Prospectus. It is important that your shares of Bradley common stock
be represented at the Special Meeting, regardless of the number of shares you
hold. Therefore, please sign, date and return your proxy card as soon as
possible, whether or not you plan to attend the Special Meeting. This will not
prevent you from voting your shares in person if you subsequently choose to
attend the Special Meeting.
Sincerely,
E. LAWRENCE MILLER
President and Chief Executive
Officer
<PAGE>
BRADLEY REAL ESTATE, INC.
699 BOYLSTON STREET
BOSTON, MASSACHUSETTS 02116
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD ON FEBRUARY , 1996
To the Stockholders of Bradley Real Estate, Inc.:
A Special Meeting of Stockholders of Bradley Real Estate, Inc., a Maryland
corporation ("Bradley"), will be held at 10:00 a.m., Eastern time, on February
, 1996, at , Boston, Massachusetts (the "Special Meeting") for the
following purposes:
1. To consider and vote upon a proposal to approve the merger of Tucker
Properties Corporation ("Tucker") with and into Bradley (the "Merger") and
the Agreement and Plan of Merger, dated as of October 30, 1995 (the "Merger
Agreement"), by and between Bradley and Tucker, pursuant to which, among
other things, each outstanding share of Tucker common stock will be
converted into the right to receive a percentage of a share of Bradley
common stock to be determined as follows. If the average per share closing
price of Bradley common stock for the 20 trading days prior to the fifth
day preceding the closing of the Merger is $16.00 or more, each share of
Tucker common stock will be exchanged for .665 of a share of Bradley common
stock. If such average closing price is between $15.50 and $16.00, the
exchange ratio will be determined by dividing $10.64 by the average closing
price. If such average closing price is $15.50 or less, the exchange ratio
will be .686 of a share of Bradley common stock. A copy of the Merger
Agreement is attached as Annex A to the Joint Proxy Statement/Prospectus
accompanying this Notice.
2. To transact such other business as may properly come before the
meeting or any adjournments or postponements thereof.
Holders of record of shares of Bradley common stock at the close of business
on January , 1996 are entitled to notice of, and to vote at, the Special
Meeting. The Merger and other related matters are more fully described in the
accompanying Joint Proxy Statement/Prospectus, and the Annexes thereto, which
form a part of this Notice.
ALL STOCKHOLDERS ARE CORDIALLY INVITED TO ATTEND THE SPECIAL MEETING. TO
ENSURE YOUR REPRESENTATION AT THE SPECIAL MEETING, HOWEVER, YOU ARE URGED TO
COMPLETE, DATE, SIGN AND RETURN THE ENCLOSED PROXY AS PROMPTLY AS POSSIBLE. A
POSTAGE-PREPAID ENVELOPE IS ENCLOSED FOR THAT PURPOSE. ANY STOCKHOLDER
ATTENDING THE SPECIAL MEETING MAY VOTE IN PERSON EVEN IF THAT STOCKHOLDER HAS
RETURNED A PROXY.
By Order of the Board of Directors
WILLIAM B. KING
Secretary
January , 1996
<PAGE>
TUCKER PROPERTIES CORPORATION
40 SKOKIE BOULEVARD, SUITE 600
NORTHBROOK, ILLINOIS 60062
January , 1996
Dear Stockholder:
You are cordially invited to attend a Special Meeting of Stockholders of
Tucker Properties Corporation ("Tucker") to be held at 9:00 a.m., Central
time, on February , 1996, at , Chicago, Illinois (the "Special
Meeting").
At the Special Meeting, you will be asked to approve the merger (the
"Merger") of Tucker with and into Bradley Real Estate, Inc. ("Bradley") and
the Agreement and Plan of Merger, dated as of October 30, 1995 (the "Merger
Agreement"), by and between Bradley and Tucker, pursuant to which, among other
things, each outstanding share of Tucker common stock will be converted into
the right to receive a percentage of a share of Bradley common stock to be
determined as follows. If the average per share closing price of Bradley
common stock for the 20 trading days prior to the fifth day preceding the
closing of the Merger is $16.00 or more, each share of Tucker common stock
will be exchanged for .665 of a share of Bradley common stock. If such average
closing price is between $15.50 and $16.00, the exchange ratio will be
determined by dividing $10.64 by the average closing price. If such average
closing price is $15.50 or less, the exchange ratio will be .686 of a share of
Bradley common stock. Approval of the Merger and the Merger Agreement requires
the affirmative vote of the holders of two-thirds of the outstanding shares of
Tucker common stock.
YOUR BOARD OF DIRECTORS BELIEVES THAT THE MERGER IS FAIR TO, AND IN THE BEST
INTERESTS OF, TUCKER AND ITS STOCKHOLDERS. THE BOARD HAS UNANIMOUSLY APPROVED
THE MERGER AND THE MERGER AGREEMENT AND UNANIMOUSLY RECOMMENDS THAT YOU VOTE
TO APPROVE THE MERGER AND THE MERGER AGREEMENT.
The accompanying Joint Proxy Statement/Prospectus provides detailed
information concerning the proposed Merger, the reasons for your Board of
Directors' recommendation of the Merger and the Merger Agreement and certain
additional information, including, without limitation, the information set
forth under the heading "Risk Factors," which describes, among other items,
potential adverse effects to stockholders as a result of the Merger. We urge
you to carefully consider all of the information in the Joint Proxy
Statement/Prospectus. It is important that your shares of Tucker common stock
be represented at the Special Meeting, regardless of the number of shares you
hold. Therefore, please sign, date and return your proxy card as soon as
possible, whether or not you plan to attend the Special Meeting. This will not
prevent you from voting your shares in person if you subsequently choose to
attend the Special Meeting.
Sincerely,
KENNETH L. TUCKER
Chairman of the Board and President
<PAGE>
TUCKER PROPERTIES CORPORATION
40 SKOKIE BOULEVARD, SUITE 600
NORTHBROOK, ILLINOIS 60062
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD ON FEBRUARY , 1996
To the Stockholders of Tucker Properties Corporation:
A Special Meeting of Stockholders of Tucker Properties Corporation, a
Maryland corporation ("Tucker"), will be held at 9:00 a.m., Central time, on
February , 1996, at , Chicago, Illinois (the "Special Meeting") for the
following purposes:
1. To consider and vote upon a proposal to approve the merger (the
"Merger") of Tucker with and into Bradley Real Estate, Inc. ("Bradley") and
the Agreement and Plan of Merger, dated as of October 30, 1995 (the "Merger
Agreement"), by and between Bradley and Tucker, pursuant to which, among
other things, each outstanding share of Tucker common stock will be
converted into the right to receive a percentage of a share of Bradley
common stock to be determined as follows. If the average per share closing
price of Bradley common stock for the 20 trading days prior to the fifth
day preceding the closing of the Merger is $16.00 or more, each share of
Tucker common stock will be exchanged for .665 of a share of Bradley common
stock. If such average closing price is between $15.50 and $16.00, the
exchange ratio will be determined by dividing $10.64 by the average closing
price. If such average closing price is $15.50 or less, the exchange ratio
will be .686 of a share of Bradley common stock. A copy of the Merger
Agreement is attached as Annex A to the Joint Proxy Statement/Prospectus
accompanying this Notice.
2. To transact such other business as may properly come before the
meeting or any adjournments or postponements thereof.
The Board of Directors of Tucker has fixed the close of business on January
, 1996 as the record date for the determination of the holders of shares of
Tucker common stock entitled to notice of, and to vote at, the Special
Meeting. The Merger and other related matters are more fully described in the
accompanying Joint Proxy Statement/Prospectus, and the Annexes thereto, which
form a part of this Notice.
ALL STOCKHOLDERS ARE CORDIALLY INVITED TO ATTEND THE SPECIAL MEETING. TO
ENSURE YOUR REPRESENTATION AT THE SPECIAL MEETING, HOWEVER, YOU ARE URGED TO
COMPLETE, DATE, SIGN AND RETURN THE ENCLOSED PROXY AS PROMPTLY AS POSSIBLE. A
POSTAGE-PREPAID ENVELOPE IS ENCLOSED FOR THAT PURPOSE. ANY STOCKHOLDER
ATTENDING THE SPECIAL MEETING MAY VOTE IN PERSON EVEN IF THAT STOCKHOLDER HAS
RETURNED A PROXY.
By Order of the Board of Directors
RICHARD H. TUCKER
Secretary
PLEASE DO NOT SEND IN ANY CERTIFICATES FOR YOUR SHARES AT THIS TIME.
January , 1996
<PAGE>
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A +
+REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE +
+SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY +
+OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT +
+BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR +
+THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE +
+SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE +
+UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF +
+ANY SUCH STATE. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
SUBJECT TO COMPLETION JANUARY 26, 1996
BRADLEY REAL ESTATE, INC.
AND
TUCKER PROPERTIES CORPORATION
JOINT PROXY STATEMENT
-----------
BRADLEY REAL ESTATE, INC.
PROSPECTUS
This Joint Proxy Statement and Prospectus ("Joint Proxy
Statement/Prospectus") is being furnished to the holders of common stock, par
value $.01 per share ("Bradley Common Stock"), of Bradley Real Estate, Inc., a
Maryland corporation ("Bradley"), in connection with the solicitation of
proxies by the Board of Directors of Bradley for use at a Special Meeting of
Stockholders of Bradley to be held at , Boston, Massachusetts, on
February , 1996, at 10:00 a.m., Eastern time, and at any and all adjournments
or postponements thereof (the "Bradley Special Meeting"). This Joint Proxy
Statement/Prospectus also constitutes the Prospectus of Bradley with respect to
the issuance of up to 7,742,951 shares of Bradley Common Stock to be issued to
stockholders of Tucker Properties Corporation, a Maryland corporation
("Tucker"), in connection with the Merger (as hereinafter defined). Bradley
Common Stock is traded on the New York Stock Exchange (the "NYSE") under the
symbol "BTR." On January , 1996, the closing price for Bradley Common Stock as
reported by the NYSE Composite Tape was $ per share.
This Joint Proxy Statement/Prospectus is also being furnished to the holders
of common stock, par value $.001 per share ("Tucker Common Stock"), of Tucker
in connection with the solicitation of proxies by the Board of Directors of
Tucker for use at a Special Meeting of Stockholders of Tucker to be held at
, Chicago, Illinois, on February , 1996, at 9:00 a.m., Central time, and
at any and all adjournments or postponements thereof (the "Tucker Special
Meeting").
This Joint Proxy Statement/Prospectus relates to the proposed merger (the
"Merger") of Tucker with and into Bradley, pursuant to the Agreement and Plan
of Merger, dated as of October 30, 1995 (the "Merger Agreement"), by and
between Bradley and Tucker. Bradley will be the surviving corporation in the
Merger (sometimes hereinafter referred to as the "Surviving Company"), and upon
completion of the Merger, the separate corporate existence of Tucker will
cease. At the time the Merger becomes effective, each issued and outstanding
share of Tucker Common Stock will be converted into the right to receive a
percentage of a share of Bradley Common Stock to be determined as follows. If
the average per share closing price of Bradley Common Stock as reported on the
NYSE over the 20 trading days immediately preceding the fifth day prior to the
date of the closing of the Merger (the "Closing Price") is $16.00 or more, each
share of Tucker Common Stock will be exchanged for .665 of a share of Bradley
Common Stock. If the Closing Price is between $15.50 and $16.00, the exchange
ratio will be determined by dividing $10.64 by the Closing Price. If the
Closing Price is $15.50 or less, the exchange ratio will be .686 of a share of
Bradley Common Stock. In connection with the consummation of the Merger,
Bradley will issue an aggregate number of shares of Bradley Common Stock
ranging from 7,200,808 shares (assuming an exchange ratio of .665) to 7,428,202
shares (assuming an exchange ratio of .686), depending on the market price of
Bradley Common Stock prior to the closing of the Merger. For example, if the
Closing Price is equal to the last trading price of Bradley Common Stock on
January 22, 1996 ($13.375), then the Exchange Ratio would be .686, and thus
each Tucker stockholder would receive Bradley Common Stock having a market
value of $9.18 for each share of Tucker Common Stock which they own. Based on
the foregoing assumptions, Bradley would issue Tucker stockholders shares of
Bradley Common Stock having an aggregate market value of approximately
$99,350,000. Consummation of the Merger is subject to various conditions (which
must be satisfied or waived), including approval of the Merger and the Merger
Agreement by the holders of two-thirds of the outstanding shares of Tucker
Common Stock at the Tucker Special Meeting and by the holders of a majority of
the outstanding shares of Bradley Common Stock at the Bradley Special Meeting.
The stockholders of each of Bradley and Tucker also will consider and vote upon
such other business as may properly come before the Bradley Special Meeting or
the Tucker Special Meeting, as the case may be, or any adjournment(s) or
postponement(s) thereof.
FOR CERTAIN FACTORS WHICH SHOULD BE CONSIDERED IN EVALUATING THE MERGER, SEE
"RISK FACTORS" ON PAGE 22.
All information contained in this Joint Proxy Statement/Prospectus with
respect to Bradley has been provided by Bradley. All information contained in
this Joint Proxy Statement/Prospectus with respect to Tucker has been provided
by Tucker.
This Joint Proxy Statement/Prospectus and the accompanying forms of proxy are
first being mailed to stockholders of Bradley and Tucker on or about January ,
1996. A stockholder who has given a proxy may revoke it at any time prior to
its exercise.
-----------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS JOINT PROXY STATEMENT/PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
THE DATE OF THIS JOINT PROXY STATEMENT/PROSPECTUS IS JANUARY , 1996.
<PAGE>
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION NOT CONTAINED IN OR INCORPORATED BY REFERENCE IN THIS JOINT
PROXY STATEMENT/PROSPECTUS, AND, IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATION NOT CONTAINED HEREIN MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED. THIS JOINT PROXY STATEMENT/PROSPECTUS DOES NOT CONSTITUTE AN OFFER
TO SELL, OR THE SOLICITATION OF AN OFFER TO PURCHASE, ANY OF THE SECURITIES
OFFERED BY THIS JOINT PROXY STATEMENT/PROSPECTUS, OR THE SOLICITATION OF A
PROXY, IN ANY JURISDICTION TO OR FROM ANY PERSON TO OR FROM WHOM IT IS
UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION OF AN OFFER, OR PROXY SOLICITATION
IN SUCH JURISDICTION. NEITHER THE DELIVERY OF THIS JOINT PROXY
STATEMENT/PROSPECTUS NOR THE ISSUANCE OR SALE OF ANY SECURITIES HEREUNDER
SHALL UNDER ANY CIRCUMSTANCES CREATE ANY IMPLICATION THAT THERE HAS BEEN NO
CHANGE IN THE INFORMATION SET FORTH OR INCORPORATED HEREIN SINCE THE DATE
HEREOF.
AVAILABLE INFORMATION
Bradley and Tucker are each subject to the informational reporting
requirements of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and in accordance therewith file reports, proxy and information
statements and other information with the Securities and Exchange Commission
(the "Commission"). Such reports, proxy and information statements and other
information filed by Bradley and Tucker can be inspected and copied at the
public reference facilities maintained by the Commission at Room 1024,
Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549 and may be
available at the following Regional Offices of the Commission: Chicago
Regional Office, Northwestern Atrium Center, 500 West Madison Street, Suite
1400, Chicago, Illinois 60661; and New York Regional Office, 7 World Trade
Center, 13th Floor, New York, New York 10048. Copies of such materials can be
obtained at prescribed rates from the Public Reference Section of the
Commission at Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549.
In addition, reports, proxy and information statements and other information
concerning Bradley and Tucker can be inspected at the offices of the NYSE, 20
Broad Street, New York, New York 10005, on which the Bradley Common Stock and
Tucker Common Stock are listed.
This Joint Proxy Statement/Prospectus does not contain all the information
set forth in the Registration Statement on Form S-4 and exhibits relating
thereto, including any amendments (the "Registration Statement"), of which
this Joint Proxy Statement/Prospectus is a part, and which Bradley has filed
with the Commission under the Securities Act of 1933, as amended (the
"Securities Act"). Reference is made to such Registration Statement for
further information with respect to Bradley and the Bradley Common Stock
offered hereby. Statements contained herein or incorporated herein by
reference concerning the provisions of documents are summaries of such
documents, and each statement is qualified in its entirety by reference to the
copy of the applicable document if filed with the Commission or attached as an
annex hereto.
INCORPORATION OF DOCUMENTS BY REFERENCE
The following documents previously filed with the Commission are hereby
incorporated by reference into this Joint Proxy Statement/Prospectus:
Bradley
1. Annual Report on Form 10-K for the fiscal year ended December 31, 1994
(filed March 17, 1995);
2. Quarterly Reports on Form 10-Q for the fiscal quarters ended March 31,
1995 (filed May 11, 1995), June 30, 1995 (filed August 14, 1995) and
September 30, 1995 (filed November 13, 1995);
(ii)
<PAGE>
3. Current Reports on Form 8-K dated March 30, 1994 (filed August 13,
1994) reporting the acquisition of Rivercrest Shopping Center, June 29,
1995 (filed June 30, 1995) reporting the execution of the Underwriting
Agreement relating to the public offering of 2,500,000 shares of Bradley
Common Stock and November 3, 1995 (filed November 3, 1995) reporting the
execution of the Merger Agreement;
4. The description of the Bradley Common Stock contained or incorporated
by reference in Bradley's Registration Statement on Form 8-A, dated August
5, 1994, (filed August 8, 1994) including any amendments thereto; and
5. Proxy Statement dated and filed March 29, 1995 in connection with
Bradley's 1995 Annual Meeting of Stockholders.
Tucker
1. The information contained under the captions "The Properties," "Growth
Strategy and Philosophy" and "Federal Income Tax Considerations" in
Tucker's Registration Statement on Form S-11 (No. 33-64942) dated October
4, 1993 (filed October 4, 1993), including all exhibits thereto;
2. Annual Report on Form 10-K for the fiscal year ended December 31, 1994
(filed April 1, 1995);
3. Quarterly Reports on Form 10-Q for the fiscal quarters ended March 31,
1995 (filed May 17, 1995), June 30, 1995 (filed August 15, 1995) and
September 30, 1995 (filed November 14, 1995);
4. Current Report on Form 8-K dated October 30, 1995 (filed November 3,
1995) reporting the execution of the Merger Agreement and Current Report on
Form 8-K dated December 30, 1993 (filed January 14, 1994), as amended by
Form 8-K/A-1 filed March 21, 1994 and Form 8-K/A-2 filed May 9, 1994;
5. The description of the Tucker Common Stock contained or incorporated
by reference in Tucker's Registration Statement on Form 8-A, dated and
filed September 27, 1993, including any amendments thereto, such amendments
filed on October 4, 1993 and October 19, 1993; and
6. Proxy Statement dated May 1, 1995 (processed May 8, 1995) in
connection with Tucker's 1995 Annual Meeting of Stockholders.
In addition, all reports and other documents filed by each of Bradley and
Tucker pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act
subsequent to the date hereof and prior to the Bradley Special Meeting and the
Tucker Special Meeting shall be deemed to be incorporated by reference herein
and to be a part hereof from the date of filing of such reports and documents.
Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Joint Proxy Statement/Prospectus to the extent that a
statement contained herein, or in any other subsequently filed document that
also is incorporated or deemed to be incorporated by reference herein,
modifies or supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Joint Proxy Statement/Prospectus.
THIS JOINT PROXY STATEMENT/PROSPECTUS INCORPORATES DOCUMENTS BY REFERENCE
WHICH ARE NOT PRESENTED HEREIN OR DELIVERED HEREWITH. THESE DOCUMENTS (NOT
INCLUDING EXHIBITS TO SUCH DOCUMENTS UNLESS SUCH EXHIBITS ARE SPECIFICALLY
INCORPORATED BY REFERENCE INTO SUCH DOCUMENTS) ARE AVAILABLE, WITHOUT CHARGE,
UPON WRITTEN OR ORAL REQUEST OF ANY PERSON, INCLUDING ANY BENEFICIAL OWNER, TO
WHOM THIS JOINT PROXY STATEMENT/PROSPECTUS IS DELIVERED TO, IN THE CASE OF
DOCUMENTS RELATING TO BRADLEY, 699 BOYLSTON STREET, BOSTON, MASSACHUSETTS
02116, ATTENTION: DONNA MACAULEY (TELEPHONE NO. (617) 867-4200), OR, IN THE
CASE OF DOCUMENTS RELATING TO TUCKER, 40 SKOKIE BOULEVARD, SUITE 600,
NORTHBROOK, ILLINOIS 60062, ATTENTION: MARY TIERNEY GIBSON, SHAREHOLDER
RELATIONS (TELEPHONE NO. (708) 272-9800, EXT. 46). IN ORDER TO ENSURE TIMELY
DELIVERY OF THE DOCUMENTS, ANY REQUEST SHOULD BE MADE BY FEBRUARY , 1996.
(iii)
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TABLE OF CONTENTS
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SUMMARY................................................................... 1
The Companies............................................................ 1
The Merger............................................................... 3
Risk Factors............................................................. 9
The Merger Agreement..................................................... 10
The Meetings of Stockholders............................................. 12
Comparison of Stockholder Rights......................................... 13
Summary Historical and Unaudited Pro Forma Combined Financial Data....... 14
Comparative Per Share Data............................................... 19
Comparative Market Data.................................................. 20
Distribution and Dividend Policy......................................... 21
RISK FACTORS.............................................................. 22
Substantial Debt Obligations and Terms of Debt........................... 22
Restrictions on Ability of Surviving Company to Dispose of Properties.... 23
Reductions in Dividends Per Share for Tucker Stockholders following
Consummation of the Merger.............................................. 23
Stock Price Fluctuations................................................. 23
Shares Available for Future Sale Could Adversely Affect Price of Bradley
Common Stock............................................................ 24
Conflicts of Interest Arising from Benefits to Certain Tucker Directors
and Officers............................................................ 24
Differences Between Rights of Tucker Stockholders and Bradley
Stockholders and Potential Anti-Takeover Effect of Certain Provisions... 24
Substantial Expenses and Payments if Merger Fails to Occur............... 25
Real Estate Investment Considerations.................................... 25
Possible Environmental Liabilities....................................... 26
Adverse Consequences of Failure to Qualify as a REIT and Other Tax Risks
Relating to Operation of Bradley After the Effective Time............... 28
Competition.............................................................. 28
Ownership Limits......................................................... 29
Dissenters' Rights....................................................... 29
THE COMPANIES............................................................. 29
Bradley.................................................................. 29
Tucker................................................................... 30
Surviving Company........................................................ 30
One North State.......................................................... 35
THE MERGER................................................................ 37
Terms of the Merger...................................................... 37
Background of the Merger................................................. 37
Reasons for the Merger; Recommendation of the Board of Directors of
Tucker.................................................................. 45
Opinion of Tucker's Financial Advisor.................................... 49
Reasons for the Merger; Recommendation of the Board of Directors of
Bradley................................................................. 54
Opinion of Bradley's Financial Advisor................................... 57
Conflicts of Interest Arising From Benefits to Certain Officers and
Directors of Tucker..................................................... 61
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Material Federal Income Tax Consequences................................ 63
Accounting Treatment.................................................... 68
Regulatory Approval..................................................... 68
Certain Resale Restrictions............................................. 69
New York Stock Exchange Listing......................................... 69
Dissenters' Rights...................................................... 69
THE MERGER AGREEMENT..................................................... 70
General................................................................. 70
Effective Time of the Merger............................................ 70
Exchange of Tucker Stock Certificates................................... 70
Conditions to the Merger................................................ 71
Representations and Warranties.......................................... 73
Certain Covenants....................................................... 73
Termination............................................................. 75
Termination Amount and Expenses......................................... 75
Reduction of Termination Amount or Expenses............................. 77
No Solicitation of Transactions......................................... 77
Indemnification......................................................... 78
Amendments.............................................................. 78
Amended TOP Partnership Agreement....................................... 79
Transfer of Interests in TMC............................................ 82
UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS........................ 83
MANAGEMENT OF THE SURVIVING COMPANY...................................... 94
THE MEETINGS OF STOCKHOLDERS............................................. 96
Bradley Special Meeting................................................. 96
Tucker Special Meeting.................................................. 97
COMPARISON OF STOCKHOLDER RIGHTS......................................... 98
Amendment of Charter and Bylaws......................................... 98
Required Vote for Authorization of Certain Actions...................... 98
Board of Directors...................................................... 99
Special Meetings........................................................ 99
Business Combinations................................................... 99
Restrictions on the Ownership, Transfer or Issuance of Shares........... 100
Advance Notice for Stockholder Proposals and Director Nominations....... 102
Control Share Acquisitions.............................................. 103
Dissolution............................................................. 103
OTHER MATTERS............................................................ 104
LEGAL MATTERS............................................................ 104
EXPERTS.................................................................. 104
STOCKHOLDER PROPOSALS.................................................... 104
ANNEXES
A. Agreement and Plan of Merger......................................... A-1
B. Opinion of Tucker's Financial Advisor: PaineWebber Incorporated...... B-1
C. Opinion of Bradley's Financial Advisor: Alex. Brown & Sons
Incorporated.......................................................... C-1
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(iv)
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[MAP SHOWING LOCATION OF BRADLEY AND TUCKER PROPERTIES]
(v)
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SUMMARY
The following is a brief summary of certain information contained elsewhere
in this Joint Proxy Statement/Prospectus and the Annexes hereto relating to the
proposed merger (the "Merger") of Tucker Properties Corporation ("Tucker") with
and into Bradley Real Estate, Inc. ("Bradley"), pursuant to which Bradley will
be the surviving corporation (sometimes hereinafter referred to as the
"Surviving Company") and the separate corporate existence of Tucker will cease.
This summary does not purport to contain all material information relating to
the Merger and the Agreement and Plan of Merger, dated as of October 30, 1995
(the "Merger Agreement"), by and between Bradley and Tucker, and is qualified
in its entirety by the more detailed information and financial statements
contained or incorporated by reference in this Joint Proxy
Statement/Prospectus. STOCKHOLDERS OF BRADLEY AND TUCKER SHOULD READ CAREFULLY
THIS JOINT PROXY STATEMENT/PROSPECTUS AND THE ANNEXES ATTACHED HERETO IN THEIR
ENTIRETY. Unless the context indicates otherwise, all references to Bradley and
Tucker include their respective subsidiaries and affiliated partnerships.
THE COMPANIES
BRADLEY
Bradley is one of the nation's oldest continuously qualified real estate
investment trusts ("REIT") under the Internal Revenue Code of 1986, as amended
(the "Code"). Bradley focuses on the ownership and operation of community
shopping centers, primarily in the Midwestern and the Northeastern regions of
the United States. Bradley's objective is to enhance the operating performance
and value of its portfolio through renovation, expansion and leasing strategies
designed to meet the needs of an evolving retail marketplace. Bradley also
seeks to create value through the acquisition of properties which can benefit
from Bradley's expertise in shopping center management, renovation and
expansion. Bradley's properties currently encompass approximately 3.0 million
square feet of rentable retail space.
Originally organized in 1961 as a Massachusetts business trust under the name
Bradley Real Estate Trust, Bradley was reorganized as a Maryland corporation in
October 1994. Bradley's principal executive office is located at 699 Boylston
Street, Boston, Massachusetts 02116 and its telephone number is (617) 867-4200.
TUCKER
Tucker is a leader in the Midwest in the development, acquisition and long-
term ownership of community shopping centers. Headquartered in Northbrook,
Illinois, Tucker owns and manages more than 4.3 million square feet of income-
producing properties. The properties are located primarily in Chicago and other
areas of the Midwest, with tenants primarily selling value-oriented
merchandise.
Tucker is a Maryland corporation, formed on May 28, 1993, which elected to
qualify as a REIT under the Code following the public offering of its common
stock, par value $.001 per share ("Tucker Common Stock"), in October 1993.
Tucker is a fully integrated real estate management and development company and
was established to continue the business of The Tucker Companies, Inc. ("TTC"),
its affiliates and related real estate entities (collectively, the "Predecessor
Business") as an owner, manager and developer of shopping centers. TTC was
founded in 1976 by Kenneth L. Tucker, Tucker's Chairman of the Board, President
and a Director.
All of Tucker's real estate properties are held by, and all of its operations
are conducted through, the Tucker Operating Limited Partnership ("TOP") and its
subsidiaries. TOP was formed for the purpose of acquiring, operating and
expanding the business of Tucker and certain of its affiliates. Tucker is the
sole general partner of TOP and owns 95.9% of the outstanding partnership units
of TOP ("TOP Units"). The limited partners of TOP, including Kenneth L. Tucker,
Richard H. Tucker, Tucker's Executive Vice President, Chief Operating Officer
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and a Director, and Harold Eisenberg, Tucker's Executive Vice President--
Leasing and Development and a Director (collectively, the "Management
Directors"), were equity holders of the entities which previously owned the
properties transferred to TOP in connection with Tucker's initial public
offering in October 1993. The TOP Units are exchangeable, subject to certain
limitations imposed to protect Tucker's status as a REIT, into shares of Tucker
Common Stock on the basis of one TOP Unit for one share of Tucker Common Stock.
Tucker Financing Partnership ("TFP") was created to facilitate the
refinancing of indebtedness encumbering certain of the Tucker properties
through a loan to TFP from a trust qualifying as a real estate mortgage
investment conduit (the "Tucker REMIC") for federal income tax purposes. The
six Tucker properties owned by TFP collateralize a $100,000,000 mortgage note
(the "Tucker REMIC Note") held by the Tucker REMIC and issued pursuant to that
certain indenture (the "Tucker REMIC Indenture") dated as of June 1, 1994 by
and among TFP, Bankers Trust Company of California, N.A. (the "Indenture
Trustee") and Bankers Trust Company. TOP is the 99% general partner of TFP, and
Tucker Financing Corp. ("TFC"), a wholly-owned subsidiary of Tucker, is the 1%
general partner of TFP.
Tucker's principal executive office is located at 40 Skokie Boulevard, Suite
600, Northbrook, Illinois 60062 and its telephone number is (708) 272-9800.
SURVIVING COMPANY
Pursuant to the Merger Agreement, at the time the Merger becomes effective
(the "Effective Time"), Tucker will merge with and into Bradley and the
separate corporate existence of Tucker will cease. Bradley will be the
Surviving Company and the former Tucker stockholders will become Bradley
stockholders with all of the rights and privileges attendant thereto. As a
result of the Merger, Bradley will succeed to Tucker's partnership interest in
TOP and its equity interest in TFC. Immediately following the Merger, the
following subsidiaries or affiliates of Tucker will remain in existence and
will become subsidiaries or affiliates of Bradley, as applicable: TOP, TFC (or
its successor), TFP, Tucker Management Corp. ("TMC"), Tucker Management Limited
Partnership and Williamson Square Associates Limited Partnership. A chart
outlining the corporate structure of the Surviving Company following the Merger
is set forth on page 31.
Following the consummation of the Merger, Bradley and Tucker believe that the
Surviving Company will be one of the largest owners and operators of community
shopping centers in the Midwestern region of the United States. The Surviving
Company will own 31 community shopping centers encompassing approximately 7.3
million square feet of rentable retail space in eleven states. The Merger
allows the Surviving Company to enter four new states (Tennessee, Kentucky,
Indiana and Wisconsin) and to significantly expand its presence throughout the
Midwest. A map indicating the locations of all the Surviving Company's
properties (with the exception of St. Francis Plaza in Santa Fe, New Mexico) is
set forth on page (v).
The current executive officers and directors of Bradley will manage the
business and affairs of the Surviving Company following the consummation of the
Merger. For information concerning these persons, see "Management of the
Surviving Company." Following the Merger, the Surviving Company will employ
most of Tucker's property management personnel. Given the strength of Tucker's
property-level operational personnel and systems, Bradley's management believes
the Merger will broaden its existing property management capabilities and allow
the Surviving Company to internalize its property management and leasing
functions.
Bradley is currently in discussions with the lead lender under its existing
$65 million secured revolving credit facility regarding replacing this facility
with a $150 million unsecured revolving credit facility. For a description of
the terms of Bradley's existing credit facility, see "The Companies--Bradley."
Bradley anticipates that the new credit facility will be available for the
acquisition, development, renovation and expansion of new and existing
properties (including, but not limited to, capital improvements, tenant
improvements, and leasing commissions), and other working capital purposes. It
is anticipated that the interest
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rates available under the new credit facility will be more favorable than those
currently available under Bradley's existing secured credit facility and may
become even more favorable in the event the Surviving Company (x) meets certain
loan to value tests or (y) receives an investment grade unsecured debt rating.
Bradley anticipates that the new credit facility will contain financial and
other covenants which are consistent with similar unsecured lines of credit for
comparable publicly-traded REITs. Bradley believes that the increased size,
lower interest rate and unsecured nature of the new credit facility will
increase the Surviving Company's financial flexibility and prospects for
obtaining an investment grade debt rating. It is currently contemplated that
the new credit facility will become effective simultaneously with the closing
of the Merger. While discussions regarding a new credit facility are ongoing,
there can be no assurance that such a credit facility will be obtained, or if
obtained, when it will become effective or become available. If this new credit
facility cannot be obtained, consent to the Merger would be required from the
existing revolving credit lenders to Bradley and Tucker. See "The Merger
Agreement--Conditions to the Merger."
THE MERGER
TERMS OF THE MERGER
The Board of Directors of each of Bradley and Tucker have approved the Merger
and the Merger Agreement, a copy of which is attached hereto as Annex A,
pursuant to which, upon fulfillment (or waiver) of the conditions set forth
therein, at the Effective Time (i) Tucker will be merged with and into Bradley,
with Bradley being the Surviving Company in the Merger, and (ii) each issued
and outstanding share of Tucker Common Stock will be converted into the right
to receive a percentage of a share of common stock, par value $.01 per share,
of Bradley ("Bradley Common Stock"), to be determined as follows. If the
average per share closing price of Bradley Common Stock as reported on the New
York Stock Exchange (the "NYSE") over the 20 trading days immediately preceding
the fifth day prior to the date of the closing of the Merger (the "Closing
Price") is $16.00 or more, each share of Tucker Common Stock will be exchanged
for .665 of a share of Bradley Common Stock. If the Closing Price is between
$15.50 and $16.00, the exchange ratio will be determined by dividing $10.64 by
the Closing Price. If the Closing Price is $15.50 or less, the exchange ratio
will be .686 of a share of Bradley Common Stock. (The applicable percentage of
a share of Bradley Common Stock to be issued to Tucker stockholders in
connection with the Merger upon such conversion will sometimes hereinafter be
referred to as the "Exchange Ratio.") The Closing Price for Bradley Common
Stock for the 20 trading days ended January , 1996 was $ . The Exchange
Ratio was the result of arms-length negotiations between Bradley and Tucker.
No fractional shares of Bradley Common Stock will be issued in connection
with the Merger. In lieu thereof, a holder of Tucker Common Stock otherwise
entitled to a fractional share of Bradley Common Stock will be paid an amount
in cash (without interest), rounded to the nearest cent, determined by
multiplying the Closing Price by the fraction of a share of Bradley Common
Stock to which such holder would otherwise be entitled.
Based upon the number of shares of Tucker Common Stock and Bradley Common
Stock outstanding at January , 1996, the former Tucker stockholders will hold,
immediately after the Merger, (i) assuming an Exchange Ratio of .665,
approximately 7,200,808 shares of Bradley Common Stock, representing
approximately 39% of the aggregate number of outstanding shares of Bradley
Common Stock; and (ii) assuming an Exchange Ratio of .686, approximately
7,428,202 shares of Bradley Common Stock, representing approximately 40% of the
aggregate number of outstanding shares of Bradley Common Stock.
REASONS FOR THE MERGER; RECOMMENDATIONS OF THE BOARDS OF DIRECTORS
Tucker
The Board of Directors of Tucker believes that the Merger is fair to and in
the best interests of Tucker and its stockholders. THE TUCKER BOARD OF
DIRECTORS HAS UNANIMOUSLY APPROVED THE MERGER AND THE MERGER AGREEMENT AND
UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS OF TUCKER VOTE FOR THE MERGER AND THE
MERGER AGREEMENT. The primary factors that Tucker's Board of Directors
considered in reaching the foregoing conclusions were:
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(i) Tucker's highly-leveraged capital structure, its decline in funds from
operations ("FFO") and its resulting difficulty in accessing capital markets;
(ii) the Tucker Board of Directors' belief that there are no feasible
alternatives to a merger available to Tucker that are likely in the near term
to significantly improve the profitability of Tucker's existing operations;
(iii) the Tucker Board of Directors' belief that the Merger is the best offer
reasonably available for Tucker's stockholders; (iv) the anticipated cost
savings and operating efficiencies available to the Surviving Company from the
Merger; (v) Tucker's and Bradley's stock price multiples relative to each other
and to the multiples of comparable REITs; (vi) the terms of the Merger
Agreement, including the Exchange Ratio and the equity interest in the
Surviving Company to be received by Tucker's stockholders; (vii) the fact that
the Merger will provide an opportunity for Tucker's stockholders to share in
any future appreciation of the Surviving Company; (viii) the fact that the
Merger is structured to enable Tucker's stockholders to convert their shares of
Tucker Common Stock into shares of Bradley Common Stock on a tax-free basis;
(ix) the similarities between Tucker and Bradley, with both companies being of
similar size, focused primarily in the retail sector and owning properties
concentrated in the Midwest; (x) the complementary strengths of Tucker and
Bradley, including Tucker's property management and leasing capabilities and
Bradley's property acquisition and capital markets expertise; (xi) the fact
that the Surviving Company will have increased capacity which will allow it to
attract national tenants and provide it with increased negotiating leverage;
and (xii) the Total Market Capitalization (as measured by the aggregate value
of the outstanding common stock plus outstanding indebtedness) of the Surviving
Company will be larger than Tucker's Total Market Capitalization, which will
provide Tucker's stockholders with enhanced liquidity. In making its
recommendation, the Tucker Board of Directors also considered the opinion,
analyses and presentations of PaineWebber Incorporated ("PaineWebber"),
Tucker's financial advisor, including its oral opinion of October 29, 1995,
which will be confirmed by a written opinion on the date that this Joint Proxy
Statement/Prospectus is mailed to Tucker stockholders, to the effect that, as
of the date of such opinion, and based upon and subject to certain matters
stated therein, the Exchange Ratio was fair, from a financial point of view, to
Tucker's stockholders. See "The Merger--Reasons for the Merger; Recommendation
of the Board of Directors of Tucker" and "--Opinion of Tucker's Financial
Advisor."
Bradley
The Board of Directors of Bradley believes that the Merger is fair to and in
the best interests of Bradley and its stockholders. THE BRADLEY BOARD OF
DIRECTORS HAS UNANIMOUSLY APPROVED THE MERGER AND THE MERGER AGREEMENT AND
UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS OF BRADLEY VOTE FOR THE MERGER AND THE
MERGER AGREEMENT. The primary factors that Bradley's Board of Directors
considered in reaching the foregoing conclusions were its belief that: (i) the
Merger will result in the Surviving Company becoming one of the leading owners
and operators of community shopping centers in the Midwest; (ii) the Merger
will provide the Surviving Company with a broader and more diverse tenant base
and thus reduce the potential impact on Bradley of the loss of any tenant and
also enhance its position with regional and national tenants; (iii) the Merger
will be accretive (i.e., will result in an incremental increase) to the
projected net income per share, FFO per share and cash available for
distribution per share of the Surviving Company in 1996 and 1997; (iv) the
Merger will provide the Surviving Company with greater access to the capital
markets including increasing the likelihood of access by the Surviving Company
to unsecured investment grade debt; (v) the Merger will improve the liquidity
of the Surviving Company's common stock; (vi) the Merger will allow the
Surviving Company to improve the terms of its revolving credit agreement,
including increasing the amount available under such line and obtaining such
financing on an unsecured basis; (vii) the Merger will lead to ongoing
operating synergies and additional cost savings, initially estimated to be
approximately $1.4 million per annum prior to the offset of costs associated
with the Merger (which costs are estimated to be approximately $8.5 million);
and (viii) the Merger will broaden Bradley's property management capabilities
and allow it to internalize its property management and leasing functions. In
making its recommendation, the Board of Directors of Bradley also considered
the opinion, analyses and presentations of Alex. Brown & Sons Incorporated
("Alex. Brown"), Bradley's financial advisor, including its
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oral opinion of October 20, 1995, confirmed by a written opinion, dated October
30, 1995, to the effect that, as of the date of such opinion and based upon and
subject to certain matters stated therein, the Exchange Ratio was fair, from a
financial point of view, to Bradley's stockholders. See "The Merger--Reasons
for the Merger; Recommendation of the Board of Directors of Bradley" and "--
Opinion of Bradley's Financial Advisor."
For a discussion of the circumstances surrounding the Merger and the reasons
for the recommendations of the Boards of Directors of Tucker and Bradley, see
"The Merger--Background of the Merger," "--Reasons for the Merger;
Recommendation of the Board of Directors of Tucker" and "--Reasons for the
Merger; Recommendation of the Board of Directors of Bradley."
OPINIONS OF FINANCIAL ADVISORS
Tucker
On October 29, 1995, PaineWebber delivered its oral opinion to Tucker's Board
of Directors to the effect that, as of such date, based on PaineWebber's review
and subject to certain limitations, the Exchange Ratio was fair, from a
financial point of view, to the holders of Tucker Common Stock. PaineWebber
will render such opinion in writing on the date that this Joint Proxy
Statement/Prospectus is mailed to Tucker stockholders. In rendering such
opinion, PaineWebber has, among other things, (i) reviewed certain publicly
available financial information concerning Tucker and Bradley; (ii) reviewed
certain information, including financial forecasts, related to the business,
earnings, cash flow, assets and prospects of Tucker and Bradley, furnished to
PaineWebber by Tucker and Bradley, respectively; (iii) conducted discussions
with members of the senior management of Tucker and Bradley concerning their
respective businesses and prospects; (iv) reviewed the historical market prices
and trading activities for Tucker Common Stock and Bradley Common Stock and
compared such prices and trading histories with those of certain other
publicly-traded companies which PaineWebber deemed to be relevant; (v) compared
the financial position and results of operations of Tucker and Bradley with
those of certain other publicly-traded companies which PaineWebber deemed to be
relevant; (vi) reviewed the Merger Agreement; (vii) reviewed the Amended and
Restated TOP Agreement of Limited Partnership (the "Amended TOP Partnership
Agreement"); and (viii) reviewed such other financial studies and analyses and
performed such investigations and took into account such other matters as
PaineWebber deemed appropriate, including its assessment of general economic,
market and monetary conditions. A copy of the full text of the written opinion
of PaineWebber, which sets forth the assumptions made, procedures followed,
matters considered and limits of its review, will be attached as Annex B to
this Joint Proxy Statement/Prospectus, and should be read in its entirety. See
"The Merger--Opinion of Tucker's Financial Advisor."
Bradley
On October 30, 1995, Alex. Brown delivered its written opinion to Bradley's
Board of Directors to the effect that, as of such date, based upon the facts
and circumstances as they existed at that time and subject to certain
limitations, the Exchange Ratio was fair, from a financial point of view, to
Bradley's stockholders. In rendering such opinion, Alex. Brown (i) reviewed the
Merger Agreement and certain related documents; (ii) reviewed certain publicly
available financial information concerning Bradley and Tucker and certain
internal financial analyses and other information furnished to it by Bradley
and Tucker; (iii) held discussions with members of the senior managements of
Bradley and Tucker regarding the business and prospects of Bradley and Tucker
Common Stock; (v) compared certain financial and stock market information for
Tucker and Bradley with similar information for certain other companies whose
securities are publicly-traded; (vi) reviewed the financial terms of certain
recent business combinations; and (vii) performed such other studies and
analyses and considered such other factors as it deemed comparable, in whole or
in part. A copy of the full text of the written opinion of Alex. Brown, which
sets forth the assumptions made, procedures followed, matters considered and
limits of its review, is attached as Annex C to this Joint Proxy
Statement/Prospectus, and should be read in its entirety. See "The Merger--
Opinion of Bradley's Financial Advisor."
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CONFLICTS OF INTEREST ARISING FROM BENEFITS TO CERTAIN OFFICERS AND DIRECTORS
OF TUCKER
In considering the recommendation of the Boards of Directors of Tucker and
Bradley to approve the Merger and the Merger Agreement, stockholders should be
aware that conflicts of interest exist because certain members of the
management and the Board of Directors of Tucker have certain interests in, and
will receive benefits from, the Merger that are separate from the interests of,
and benefits to, the stockholders of Tucker generally. Stockholders that are
not directors or officers of Tucker will not receive these benefits. In
connection with the execution of the Merger Agreement, Tucker adopted and
entered into the following plans and agreements: (i) the Tucker Severance Pay
Plan (the "Severance Plan"), pursuant to which all employees of Tucker and its
affiliates (with the exception of those described below) whose employment
terminates under certain specified conditions prior to December 31, 1996 will
be entitled to receive a severance payment equal to six weeks' base salary plus
an additional two weeks' base salary for each full year of regular full-time
employment with Tucker, its predecessors and their respective affiliates
(including TTC), up to a maximum payment of twice the employee's annual
compensation for the calendar year immediately prior to the employee's
termination of employment; (ii) a severance agreement with Kenneth Tucker,
Tucker's Chairman of the Board, President and a Director, pursuant to which Mr.
Tucker will be entitled to receive (a) a severance payment of $225,000 if his
employment is terminated under certain specified conditions prior to December
31, 1996 or if he is still employed by Tucker as of the Effective Time and (b)
twelve months of continued health care coverage following termination of
employment if his employment is terminated under certain specified conditions
prior to December 31, 1996; (iii) individual severance agreements with Richard
Tucker, Tucker's Executive Vice President, Chief Operating Officer and a
Director, Harold Eisenberg, Tucker's Executive Vice President--Leasing and
Development and a Director, and Lawrence Tucker, Tucker's Vice President,
pursuant to which the employee will be entitled to receive a severance payment
of $123,000, $122,000 and $58,000, respectively, which severance payments were
substantially identical to the payments such individuals would have received
under the Severance Plan, as well as twelve months of continued health care
coverage, if his employment is terminated under certain specified conditions
prior to December 31, 1996; (iv) an agreement with Norris Eber, Tucker's Senior
Vice President--Asset Management and Acquisitions, pursuant to which Mr. Eber
will receive (a) $139,000 if he is still employed by Tucker as of the Effective
Time and (b) a severance payment of $61,000 and twelve months of continued
health care coverage if his employment is terminated under certain specified
conditions prior to December 31, 1996; and (v) a severance agreement with
William Karnes, Tucker's Chief Financial Officer, pursuant to which Mr. Karnes
will receive twelve months of continued health care coverage if his employment
is terminated under certain specified conditions prior to or concurrently with
the consummation of the Merger or if his employment is terminated for any
reason after the consummation of the Merger but prior to December 31, 1996.
Tucker previously entered into an employment agreement with Mr. Karnes pursuant
to which he will receive a severance payment equal to twelve months' base
salary (currently $210,000) if his employment is terminated under certain
conditions. Bradley has agreed to assume and be bound by these agreements after
the Effective Time. Bradley also has entered into a three-year consulting
agreement with Kenneth Tucker, effective as of the Effective Time, pursuant to
which Mr. Tucker will receive an aggregate payment of $405,000, consisting of
three annual consulting fee payments of $135,000 each. In addition, Bradley has
agreed to continue to provide the directors, officers, employees, advisors and
agents of Tucker and each of its subsidiaries with all rights to
indemnification or exculpation existing under their respective charters or
bylaws in effect as of the date of the Merger Agreement with respect to matters
occurring at or prior to the Effective Time, and to provide such persons with
certain indemnification rights under Bradley's Articles of Amendment and
Restatement (the "Bradley Charter") and Bradley's Bylaws (the "Bradley
Bylaws"). Bradley has also agreed to purchase, at or prior to the Effective
Time, liability insurance coverage for Tucker's directors and officers for a
period of six years which will provide the directors and officers with
$10,000,000 of aggregate coverage. In addition, Bradley has agreed to adopt
certain amendments to Tucker's existing indemnification agreements with its
directors. See "The Merger--Conflicts of Interest Arising from Benefits to
Certain Officers and Directors of Tucker" and "The Merger Agreement--
Indemnification." In connection with the execution of the Merger Agreement,
Bradley, Tucker and certain of the limited partners of TOP, including the
Management Directors, agreed to an amendment and
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restatement of the TOP Agreement of Limited Partnership (the "TOP Partnership
Agreement"), which, among other things, limits in certain respects the
environmental indemnification obligations of the Management Directors under the
TOP Partnership Agreement and requires Bradley to register the shares of
Bradley Common Stock which the limited partners may receive upon redemption of
TOP Units under the Securities Act of 1933, as amended (the "Securities Act").
The shares issuable upon redemption of the outstanding TOP Units have been
registered under the Securities Act in this Joint Proxy Statement/Prospectus.
In connection with the consummation of the Merger, Kenneth and Richard Tucker
also have agreed to transfer their equity interests in TMC to two individuals
who are officers of Bradley for $500 each at or prior to the Effective Time.
Approval of the Merger by stockholders does not constitute a ratification of
any of the foregoing transactions. See "The Merger Agreement--Transfer of
Interests in TMC."
Because of these potential conflicts of interest, the Tucker Board of
Directors designated the non-management directors as a special committee (the
"Tucker Special Committee") to evaluate and negotiate on behalf of Tucker any
compensation, severance and other arrangements or transactions involving
Tucker's management. The Tucker Special Committee was represented by its own
independent counsel. Tucker believes that Tucker's stockholders were not
adversely affected by any of such compensation, severance and other
arrangements or transactions.
MATERIAL FEDERAL INCOME TAX CONSEQUENCES
Mayer, Brown & Platt, counsel for Tucker, has delivered its opinion to Tucker
that, on the basis of facts, representations and assumptions set forth in such
opinion, the Merger will be treated for United States federal income tax
purposes as a reorganization within the meaning of Section 368(a)(1)(A) of the
Code. Accordingly, (i) no gain or loss will be recognized by Tucker as a result
of the Merger, and (ii) no gain or loss will be recognized by any stockholder
of Tucker who receives Bradley Common Stock in exchange for Tucker Common Stock
(except with respect to any cash received in lieu of a fractional interest in
Bradley Common Stock). Goodwin, Procter & Hoar, counsel for Bradley, has
delivered its opinion to Bradley that, on the basis of facts, representations
and assumptions set forth in such opinion, the Merger will be treated for
United States federal income tax purposes as a reorganization within the
meaning of Section 368(a)(1)(A) of the Code. Accordingly, no gain or loss will
be recognized by Bradley as a result of the Merger. See "The Merger--Material
Federal Income Tax Consequences" and "The Merger Agreement--Conditions to the
Merger."
If certain detailed conditions imposed by the REIT provisions of the Code are
met, entities such as Bradley and Tucker that invest primarily in real estate
and that otherwise would be treated for federal income tax purposes as
corporations generally are not taxed at the corporate level on their "real
estate investment trust taxable income" that is currently distributed to
stockholders. This treatment substantially eliminates the "double taxation" on
earnings (i.e., taxation at both the corporate and stockholder levels) that
generally results from the use of corporations. Prior to the consummation of
the Merger, Bradley and Tucker each has operated in a manner intended to allow
it to qualify as a REIT. Bradley intends to operate following the Merger in a
manner so that Bradley will continue to qualify as a REIT. If Bradley fails to
qualify as a REIT in any taxable year, Bradley will be subject to federal
income taxation as if it were a domestic corporation, and Bradley could be
subject to potentially significant tax liabilities which could reduce or
eliminate cash available to distribute to stockholders. Unless entitled to
relief under certain Code provisions, Bradley also would be disqualified from
treatment as a REIT for the four taxable years following the year during which
qualification was lost. Moreover, under certain circumstances, Bradley's
qualification as a REIT following the Merger could depend on Tucker's
qualification as a REIT for periods prior to the Merger, and in any event the
liabilities that Bradley will assume in the Merger would include Tucker's
liability for any unpaid taxes, including taxes resulting if Tucker failed to
qualify as a REIT, for any period prior to the Merger. At the closing of the
Merger, Goodwin, Procter & Hoar will render an opinion regarding Bradley's
qualification as a REIT for periods prior to the Merger. In connection with
this Joint Proxy Statement/Prospectus, Goodwin Procter & Hoar has rendered an
opinion regarding Bradley's ability to qualify as a REIT following the Merger,
which has been filed as an exhibit to this Joint Proxy Statement/Prospectus.
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At the Closing of the Merger, Mayer, Brown & Platt will render an opinion
regarding Tucker's qualification as a REIT for the taxable year ended December
31, 1995 and for the short tax year ending at the date of the closing of the
Merger, and Coopers & Lybrand L.L.P. will render an opinion regarding Tucker's
qualification as a REIT for the taxable years ended December 31, 1993 and
December 31, 1994. Such opinions will be based on representations from
management regarding Tucker's and Bradley's compliance with the requirements
for qualification as a REIT and are not binding on the Internal Revenue Service
(the "IRS"). Accordingly, no assurance can be given that the IRS cannot
challenge the status of Bradley or Tucker as a REIT prior to the Merger or the
status of Bradley as a REIT following the Merger. See "The Merger--Material
Federal Income Tax Consequences--Qualification of Bradley as a REIT Following
the Merger."
ALTERNATIVES TO THE MERGER
In the event the Merger is not consummated for any reason, Bradley will
continue to pursue its business objectives of (i) maximizing FFO and cash
available for distribution to holders of Bradley Common Stock, (ii) increasing
distributions per share of Bradley Common Stock, (iii) increasing the value of
its properties by continuing its growth through the active management and
expansion of existing shopping centers and selective development and
acquisition of new shopping centers, and (iv) holding its properties for long-
term investment. In addition, Bradley may seek other acquisition opportunities
and additional debt or equity financing.
In the event the Merger is not consummated for any reason, Tucker will
continue to pursue its business objectives of maximizing the value of its
properties and reducing overhead to increase its net cash flow. Tucker would
also seek to reduce the amount of its indebtedness through potential sales of
properties and improved cash flow. In addition, Tucker may seek another
strategic combination. The Tucker Board of Directors believes there are no
feasible alternatives to the Merger available to Tucker at the present time
that are likely to significantly improve the profitability of Tucker's existing
operations or result in greater stockholder value.
ACCOUNTING TREATMENT
Bradley will account for the Merger as a purchase in accordance with
Accounting Principles Board Opinion No. 16. See "The Merger--Accounting
Treatment."
CERTAIN RESALE RESTRICTIONS
All shares of Bradley Common Stock received by Tucker stockholders in the
Merger will be freely transferable, except that shares of Bradley Common Stock
received by persons who are deemed to be "affiliates" (as such term is defined
under the Securities Act) of Tucker at the time of the Special Meeting of
Tucker stockholders may be resold by them only in certain permitted
circumstances. See "The Merger--Certain Resale Restrictions."
NEW YORK STOCK EXCHANGE LISTING
It is a condition to Tucker's and Bradley's obligations to consummate the
Merger that, prior to the Effective Time, Bradley obtain the approval for the
listing of the shares of Bradley Common Stock issuable in the Merger on the
NYSE, subject to official notice of issuance. See "The Merger--New York Stock
Exchange Listing" and "The Merger Agreement--Conditions to the Merger."
DISSENTERS' RIGHTS
Under the Maryland General Corporation Law ("MGCL"), stockholders of Tucker
and Bradley are not entitled to dissenters' rights in connection with the
Merger. See "The Merger--Dissenters' Rights."
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<PAGE>
RISK FACTORS
In considering whether to approve the Merger and the Merger Agreement,
stockholders of Bradley and Tucker should consider, in addition to the other
information in this Joint Proxy Statement/Prospectus, the matters discussed
under "Risk Factors." Such matters include:
. Possible adverse consequences to the stockholders of Bradley as a result
of (i) the increase of the amount of total debt payable by the Surviving
Company to approximately $220.5 million after the Merger as compared to
$34.7 million for Bradley as of September 30, 1995; (ii) the increase in
the Surviving Company's pro forma ratio of debt to Total Market
Capitalization to approximately 46% after the Merger as compared to 18%
for Bradley as of September 30, 1995; and (iii) the increase in the
amount of the Surviving Company's adjustable interest rate debt to
approximately $82.4 million after the Merger as compared to $9.8 million
for Bradley as of September 30, 1995.
. Risks associated with the Surviving Company's potential inability to
refinance indebtedness when due on reasonable terms and conditions,
including approximately $100,000,000 of indebtedness relating to the
Tucker REMIC Note which matures in September 2000.
. Restrictions on the ability of the Surviving Company to dispose of
properties collateralizing the Tucker REMIC Note or to prepay the Tucker
REMIC Note. Pursuant to the terms of the Tucker REMIC Indenture, prior to
October 1997, the principal amount of the Tucker REMIC Note cannot be
prepaid and the Tucker properties securing the Tucker REMIC Note cannot
be sold. If the Surviving Company wishes either to prepay principal
amounts of the Tucker REMIC Note or to sell any of the properties
collateralizing the Tucker REMIC Note after such date, it will incur
significant prepayment penalties. See "Risk Factors--Restrictions on
Ability of Surviving Company to Dispose of Properties." The Amended TOP
Partnership Agreement also contains certain restrictions on the sale of
properties held by TOP. See "The Merger Agreement--Amended TOP
Partnership Agreement."
. Reduction in dividends per share to Tucker stockholders following
consummation of the Merger. Assuming the Surviving Company continues to
make regular quarterly distributions at Bradley's current rate of $.33
per share, each stockholder of Tucker will receive an equivalent
quarterly dividend payment of $.219 per share (assuming an Exchange Ratio
of .665) or $.226 per share (assuming an Exchange Ratio of .686), as
compared to Tucker's most recent quarterly dividend of $.25 per share.
. Possible adverse consequences to Tucker's stockholders associated with a
decline in the price of Bradley Common Stock between the date of this
Joint Proxy Statement/Prospectus and the Effective Time.
. Risks associated with a possible reduction in the price of Bradley Common
Stock following the Effective Time, due to future sales of the Surviving
Company's common stock or the potential for sales of the Surviving
Company's common stock by current Tucker stockholders.
. Possible conflicts of interests due to the fact that certain members of
the Board of Directors and management of Tucker have certain interests
in, and will receive certain benefits from, the Merger that are separate
from the interests of and benefits to stockholders of Tucker generally.
See "The Merger--Conflicts of Interest Arising from Benefits to Certain
Officers and Directors of Tucker."
. Certain differences between the rights of stockholders of Tucker under
Tucker's Articles of Amendment and Restatement (the "Tucker Charter") and
Tucker's Bylaws (the "Tucker Bylaws") and the rights of stockholders of
Bradley under the Bradley Charter and the Bradley Bylaws. See "Comparison
of Stockholder Rights."
. Possible payment of a termination fee and expenses by Tucker to Bradley.
If the Merger Agreement were to be terminated under certain circumstances
and/or Tucker were to enter into an acquisition agreement with a third
party under certain circumstances, Tucker would be required to pay
Bradley a termination fee of $3,000,000 plus reimbursement of Bradley's
out-of-pocket expenses up to $2,000,000. If the Merger Agreement is
terminated in certain other circumstances, Tucker will be required to
reimburse Bradley for its out-of-pocket expenses up to $2,000,000.
9
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THE MERGER AGREEMENT
EFFECTIVE TIME OF THE MERGER
In accordance with the MGCL, the Merger will become effective upon the
acceptance for record of the Articles of Merger by the State Department of
Assessments and Taxation of Maryland. Subject to the fulfillment (or waiver) of
the other conditions to the obligations of Bradley and Tucker to consummate the
Merger, it is currently expected that the Merger will be consummated as soon as
practicable following the approval by the stockholders of Bradley and Tucker of
the Merger and the Merger Agreement at their respective Special Meetings of
Stockholders. See "The Merger Agreement--Effective Time of the Merger."
EXCHANGE OF TUCKER STOCK CERTIFICATES
Promptly after the Effective Time, a designated exchange agent (the "Exchange
Agent") will mail a letter of transmittal and instructions to each holder of
record of a certificate representing shares of Tucker Common Stock (a
"Certificate") as of the Effective Time for use in effecting the surrender of
the Certificate in exchange for certificates representing shares of Bradley
Common Stock and cash in lieu of fractional shares. Upon surrender of a
Certificate for cancellation to the Exchange Agent, together with such letter
of transmittal, duly executed and completed in accordance with the instructions
thereto, the holder of such Certificate will be entitled to receive in exchange
therefor (i) a certificate representing the number of whole shares of Bradley
Common Stock to which such holder shall be entitled, and (ii) a check
representing the amount of cash in lieu of fractional shares, if any, plus the
amount of any dividends or distributions, if any, as provided in the Merger
Agreement, after giving effect to any required withholding tax, and the
Certificate so surrendered will be canceled. Certificates should not be
surrendered until the letter of transmittal and instructions are received. See
"The Merger Agreement--Exchange of Tucker Stock Certificates."
CONDITIONS TO THE MERGER
The respective obligations of Bradley and Tucker to effect the Merger and the
other transactions contemplated in the Merger Agreement are subject to the
fulfillment or waiver of certain conditions at or prior to the Effective Time
including, among others: (a) approval of the Merger and the Merger Agreement by
the requisite vote of stockholders of Tucker and Bradley; (b) receipt of
various third-party consents, including the consent (the "Tucker REMIC
Consent") of the Indenture Trustee under the Tucker REMIC Indenture and the
consent of each of the lenders under Bradley's and Tucker's credit agreements;
(c) execution by Tucker and all of the limited partners of TOP of the Amended
TOP Partnership Agreement; (d) receipt by Bradley of a letter from Coopers &
Lybrand L.L.P., independent public accountants for Tucker, certifying, among
other things, that for federal income tax purposes, Tucker will not have any
accumulated or current earnings or profits immediately prior to the Effective
Time; and (e) receipt by Bradley of a private letter ruling from the IRS to the
effect that following the consummation of the Merger, each of TFC and TPI will
qualify as a "qualified REIT subsidiary" of Bradley under Section 856(i) of the
Code. See "The Merger Agreement--Conditions to the Merger."
TERMINATION
The Merger Agreement may be terminated and abandoned at any time prior to the
Effective Time, whether before or after approval of the Merger and the Merger
Agreement, by the stockholders of Tucker and Bradley, in a number of
circumstances, including, among others: (a) by the mutual written consent of
Tucker and Bradley; (b) by either Tucker or Bradley if (i) the Merger Agreement
and the transactions contemplated thereby shall have failed to receive the
requisite vote for approval by the stockholders of Bradley or Tucker upon the
holding of a duly convened stockholder meeting, or (ii) the Merger shall not
have been consummated on or before June 30, 1996 (other than due to the failure
of the party seeking to terminate the Merger Agreement to perform its
obligations under the Merger Agreement required to be performed by it at or
prior to the Effective Time); (c) by action of Tucker if (i) the Board of
Directors of Tucker recommends to Tucker's stockholders approval or
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<PAGE>
acceptance of an Acquisition Proposal (as defined below in "The Merger
Agreement--No Solicitation of Transactions") by a person other than Bradley,
but only in the event that the Board of Directors of Tucker, after consultation
with and based upon the advice of Mayer, Brown & Platt or another nationally
recognized law firm, has determined in good faith that such action is necessary
for the Board of Directors of Tucker to comply with its fiduciary duties to its
stockholders under applicable law, or (ii) the Board of Directors of Bradley
recommends to Bradley's stockholders approval or acceptance of a proposal by a
person other than Tucker to acquire 50% or more of the assets or stock of
Bradley, by way of merger, tender offer, exchange offer or similar transaction;
or (d) by action of Bradley if the Board of Directors of Tucker shall have
recommended that stockholders of Tucker accept or approve an Acquisition
Proposal by a person other than Bradley. See "The Merger Agreement--
Termination."
TERMINATION AMOUNT AND EXPENSES
If (a) Bradley terminates the Merger Agreement because (i) the Board of
Directors of Tucker has recommended that stockholders of Tucker accept or
approve an Acquisition Proposal by a person other than Bradley (or Tucker or
its Board has resolved to do such), or (ii) any representation, warranty,
covenant or agreement on the part of Tucker set forth in the Merger Agreement
has been willfully breached; or (b) Tucker terminates the Merger Agreement
because the Board of Directors of Tucker, after consultation with and based
upon the advice of Mayer, Brown & Platt or another nationally recognized law
firm, has determined in good faith that its fiduciary duties to its
stockholders under applicable law require it to recommend to its stockholders
approval or acceptance of an Acquisition Proposal by a person other than
Bradley, then Tucker shall pay to Bradley an amount (the "Termination Amount")
in cash equal to the sum of $3,000,000 plus Bradley's out-of-pocket costs and
expenses in connection with the Merger Agreement and the transactions
contemplated thereby, up to $2,000,000.
If Bradley terminates the Merger Agreement because (i) the Board of Directors
of Tucker has failed to make, or has withdrawn, amended, modified or changed
its approval or recommendation of the Merger Agreement or any of the
transactions contemplated thereby; (ii) Tucker has failed as soon as
practicable to mail this Joint Proxy Statement/Prospectus to its stockholders
or to include the recommendation of its Board of Directors of the Merger
Agreement and the transactions contemplated thereby in this Joint Proxy
Statement/Prospectus; (iii) Tucker or its Board of Directors has resolved to do
either (i) or (ii) above; or (iv) any representation, warranty, covenant or
agreement on the part of Tucker set forth in the Merger Agreement has been
breached or become untrue, as the case may be, and is incapable of being
satisfied by June 30, 1996 (except for a termination because of a willful
breach by Tucker in which case the previous paragraph will apply), Tucker shall
pay all of Bradley's out-of-pocket costs and expenses in connection with the
Merger Agreement and the transactions contemplated thereby, up to $2,000,000
("Expenses").
If at any time within one year after termination of the Merger Agreement,
unless such termination was pursuant to certain events or circumstances
specified in the Merger Agreement, Tucker enters into an agreement relating to
an Acquisition Proposal with a person other than Bradley or Tucker's Board of
Directors recommends or resolves to recommend to Tucker's stockholders approval
or acceptance of an Acquisition Proposal with a person other than Bradley,
then, upon the entry into such agreement or the making of such recommendation
or resolution, Tucker shall pay to Bradley the Termination Amount, which amount
shall be reduced by any monies previously paid by Tucker to Bradley pursuant to
the previous paragraphs. See "The Merger Agreement--Termination Amount and
Expenses."
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<PAGE>
THE MEETINGS OF STOCKHOLDERS
BRADLEY SPECIAL MEETING
The Special Meeting of Bradley's stockholders will be held at
, Boston, Massachusetts, on February , 1996, at 10:00 a.m., Eastern time
(including any and all adjournments and postponements thereof, the "Bradley
Special Meeting"). At the Bradley Special Meeting, holders of Bradley Common
Stock will consider and vote upon a proposal to approve the Merger and the
Merger Agreement. This proposal must be approved by the affirmative vote of the
holders of a majority of the outstanding shares of Bradley Common Stock
entitled to vote thereon. Holders of Bradley Common Stock are entitled to one
vote per share. Only holders of Bradley Common Stock at the close of business
on January , 1996 (the "Bradley Record Date") will be entitled to notice of
and to vote at the Bradley Special Meeting. As of the Bradley Record Date,
directors and executive officers of Bradley, all of whom have indicated that
they will vote all of their shares of Bradley Common Stock for approval of the
Merger and the Merger Agreement, and their affiliates were owners of
approximately 64,000 shares of Bradley Common Stock, representing less than 1%
of the outstanding shares of Bradley Common Stock. See "The Meetings of
Stockholders--Bradley Special Meeting."
Bradley stockholders as of the Bradley Record Date may grant proxies by
completing, dating, signing and returning the proxy card accompanying this
Joint Proxy Statement/Prospectus. All shares of Bradley Common Stock
represented by properly executed proxies will, unless such proxies have been
previously revoked, be voted in accordance with the instructions indicated in
such proxies. IF NO INSTRUCTIONS ARE INDICATED, SUCH SHARES OF BRADLEY COMMON
STOCK WILL BE VOTED IN FAVOR OF THE MERGER AND THE MERGER AGREEMENT. A
stockholder who has given a proxy may revoke it at any time prior to its
exercise by giving written notice thereof to the Secretary of Bradley, by
signing and returning a later-dated proxy or by voting in person at the Bradley
Special Meeting; however, mere attendance at the Bradley Special Meeting will
not in and of itself have the effect of revoking the proxy.
THE BOARD OF DIRECTORS OF BRADLEY HAS UNANIMOUSLY APPROVED THE MERGER AND THE
MERGER AGREEMENT AND UNANIMOUSLY RECOMMENDS THAT BRADLEY STOCKHOLDERS VOTE FOR
APPROVAL OF THE MERGER AND THE MERGER AGREEMENT. SEE "THE MERGER--BACKGROUND OF
THE MERGER" AND "--REASONS FOR THE MERGER; RECOMMENDATION OF THE BOARD OF
DIRECTORS OF BRADLEY."
TUCKER SPECIAL MEETING
The Special Meeting of Tucker's stockholders will be held at
, Chicago, Illinois, on February , 1996, at 9:00 a.m., Central time
(including any and all adjournments and postponements thereof, the "Tucker
Special Meeting"). At the Tucker Special Meeting, holders of Tucker Common
Stock will consider and vote upon a proposal to approve the Merger and the
Merger Agreement. This proposal must be approved by the affirmative vote of the
holders of two-thirds of the outstanding shares of Tucker Common Stock entitled
to vote thereon. Holders of Tucker Common Stock are entitled to one vote per
share. Only holders of Tucker Common Stock at the close of business on January
, 1996 (the "Tucker Record Date") will be entitled to notice of and to vote at
the Tucker Special Meeting. As of the Tucker Record Date, directors and
executive officers of Tucker, all of whom have indicated that they will vote
all of their shares of Tucker Common Stock for approval of the Merger and the
Merger Agreement, and their affiliates were beneficial owners of 112,583 shares
of Tucker Common Stock, representing approximately 1% of the outstanding shares
of Tucker Common Stock. See "The Meetings of Stockholders--Tucker Special
Meeting."
Tucker stockholders as of the Tucker Record Date may grant proxies by
completing, dating, signing and returning the proxy card accompanying this
Joint Proxy Statement/Prospectus. All shares of Tucker Common Stock represented
by properly executed proxies will, unless such proxies have been previously
revoked, be voted
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<PAGE>
in accordance with the instructions indicated in such proxies. IF NO
INSTRUCTIONS ARE INDICATED, SUCH SHARES OF TUCKER COMMON STOCK WILL BE VOTED IN
FAVOR OF THE MERGER AND THE MERGER AGREEMENT. A stockholder who has given a
proxy may revoke it at any time prior to its exercise by giving written notice
thereof to the Secretary of Tucker, by signing and returning a later-dated
proxy or by voting in person at the Tucker Special Meeting; however, mere
attendance at the Tucker Special Meeting will not in and of itself have the
effect of revoking the proxy.
THE BOARD OF DIRECTORS OF TUCKER HAS UNANIMOUSLY APPROVED THE MERGER AND THE
MERGER AGREEMENT AND UNANIMOUSLY RECOMMENDS THAT TUCKER STOCKHOLDERS VOTE FOR
APPROVAL OF THE MERGER AND THE MERGER AGREEMENT. SEE "THE MERGER--BACKGROUND OF
THE MERGER," "--REASONS FOR THE MERGER; RECOMMENDATION OF THE BOARD OF
DIRECTORS OF TUCKER" AND "--CONFLICTS OF INTEREST ARISING FROM BENEFITS TO
CERTAIN OFFICERS AND DIRECTORS OF TUCKER."
COMPARISON OF STOCKHOLDER RIGHTS
The rights of stockholders of Tucker, a Maryland corporation, currently are
governed by Maryland law, the Tucker Charter and the Tucker Bylaws. Upon
completion of the Merger, stockholders of Tucker will become stockholders of
Bradley, a Maryland corporation, and their rights as stockholders of Bradley
will be governed by Maryland law, the Bradley Charter and the Bradley Bylaws.
Certain differences between the rights of stockholders of Tucker and the
rights of stockholders of Bradley include the following: (i) the affirmative
vote of two-thirds of the outstanding shares of Tucker Common Stock is required
to amend the Tucker Charter or to approve a merger, consolidation, share
exchange or sale of all or substantially all of the assets of Tucker, whereas
the affirmative vote of a majority of the outstanding shares of Bradley Common
Stock is required for comparable actions involving Bradley; (ii) the Bradley
Charter provides for three classes of directors, with the term of office of one
class expiring each year, whereas the Tucker Charter provides that all of its
directors are elected each year at the annual meeting of stockholders; (iii)
the holders of not less than 10% of the outstanding shares of Tucker Common
Stock may call a special meeting of Tucker's stockholders, whereas the holders
of not less than 25% of the outstanding shares of Bradley Common Stock may call
a special meeting of Bradley's stockholders; (iv) the Tucker Board of Directors
has exempted certain transactions from the Maryland business combination
statute (including the Merger), whereas Bradley has not made any such
exemptions (except that Bradley's Board of Directors has exempted the Merger
from such statute); (v) the Bradley Charter generally limits any holder from
acquiring more than 9.8% of the value of all outstanding capital stock of
Bradley while the Tucker Charter generally limits any holder from acquiring
more than 7% of the value of the issued and outstanding stock of Tucker (in the
case of Bradley, this ownership limitation does not apply to shares of capital
stock acquired pursuant to certain all cash tender offers for all of the
outstanding shares of capital stock); and (vi) the holders of Tucker Common
Stock may only amend certain provisions of the Tucker Bylaws, whereas the
holders of Bradley Common Stock may amend any provision of the Bradley Bylaws.
See "Comparison of Stockholder Rights."
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BRADLEY REAL ESTATE, INC.
SUMMARY HISTORICAL AND UNAUDITED PRO FORMA COMBINED FINANCIAL DATA
The following tables set forth financial information for Bradley on a
historical and on a pro forma basis and should be read in conjunction with, and
are qualified in their entirety by, the respective historical financial
statements and notes thereto of Bradley and Tucker incorporated by reference
into this Joint Proxy Statement/Prospectus. The financial information presented
below includes the accounts of Bradley (including its predecessor Bradley Real
Estate Trust) and, for the pro forma information, the accounts of Tucker and of
its subsidiaries whose accounts are combined and consolidated with the Tucker
accounts.
The stock price used to determine the purchase consideration paid by Bradley
in the pro forma financial statements is $14.125 per share, which represents an
estimated Closing Price based upon the estimated average closing prices of
Bradley Common Stock on the NYSE over the 20 trading days prior to the fifth
day preceding the date of the original filing of this Joint Proxy
Statement/Prospectus with the Commission on December 7, 1995.
During the period from January 1, 1994 to September 30, 1995, Bradley
acquired three properties, sold one property, effected a $125,000,000 shelf
registration statement, acquired the REIT advisory business of its
long-standing external advisor, completed a public offering of 2,500,000 shares
of Bradley Common Stock (the "July Offering") and repaid certain fixed rate
mortgage debt.
In March 1994, Bradley purchased the 429,000 square foot Rivercrest Center in
Crestwood, Illinois ("Rivercrest") for $24,500,000. The purchase of Rivercrest
was financed through borrowings under Bradley's $65,000,000 secured revolving
line of credit with The First National Bank of Boston, lead lender with Fleet
National Bank and Wells Fargo Realty Advisors Funding, Incorporated (the
"Bradley Line of Credit"). In November 1994, Bradley acquired Westwind Plaza,
an 88,000 square foot community shopping center located in Minnetonka,
Minnesota ("Westwind"), for $7,500,000. Westwind was purchased with the
assumption of $5,000,000 of mortgage debt, with the balance paid through a tax-
deferred exchange from the sale of Spruce Tree Centre, a mixed-use
office/retail property in St. Paul, Minnesota ("Spruce Tree"). In April 1995,
Bradley acquired St. Francis Plaza, a 30,000 square foot shopping center
located in Santa Fe, New Mexico ("St. Francis Plaza"), for $5,200,000. St.
Francis Plaza was purchased with the assumption of approximately $2,100,000 of
mortgage debt and the cash proceeds from the sale of 182,500 shares of Bradley
Common Stock to the former owner of St. Francis Plaza.
On January 31, 1995, following stockholder approval, Bradley acquired the
REIT advisory business of its long-standing external advisor and thereby became
a self-administered REIT. The acquisition, pursuant to which Bradley issued
325,000 shares of Bradley Common Stock to the owners of the advisor, resulted
in the termination of an advisory arrangement extending through August 1999.
On July 6, 1995, Bradley completed the July Offering at a price of $16 per
share. Net proceeds from the July Offering were approximately $37,405,000, of
which $32,600,000 was used to pay down the Bradley Line of Credit, $4,712,000
was used to pay off the non-recourse mortgages assumed in November 1994 upon
the acquisition of Westwind and the balance was used for general business
purposes.
In June 1994, Tucker acquired the Pavilion at Mequon, a community shopping
center aggregating approximately 212,000 square feet of gross leasable area
located in Mequon, Wisconsin (the "Mequon Pavilions"). The Mequon Pavilions was
purchased for $18,300,000 which was financed through a $13,500,000 mortgage
note and borrowings for the balance under the $50,000,000 collateralized
revolving line of credit with The First National Bank of Boston, lead lender
with Mellon Bank, N.A. (the "Tucker Line of Credit").
The unaudited pro forma operating and other data are presented as if the
Bradley and Tucker acquisitions, disposition and capital transactions,
described above, and the Merger had been consummated on January 1, 1994,
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with Bradley qualifying as a REIT, distributing all of its taxable income and,
therefore, incurring no federal income tax expense during the period from
January 1, 1994 to September 30, 1995. The Merger has been accounted for under
the purchase method of accounting in accordance with Accounting Principles
Board Opinion No. 16.
The unaudited pro forma operating and other data are presented for
comparative purposes only and are not necessarily indicative of what the actual
results of operations of Bradley would have been for the periods presented, nor
does such data purport to represent the results to be achieved in future
periods.
<TABLE>
<CAPTION>
NINE MONTHS ENDED SEPTEMBER 30,
----------------------------------------------
HISTORICAL
PRO FORMA(1) --------------------------
1995 1995 1994
----------------- ------------ ------------
(IN THOUSANDS EXCEPT PER SHARE DATA)
<S> <C> <C> <C>
OPERATING DATA:
Income:
Rental income................. $ 63,787 $ 26,697 $ 24,467
Other income.................. 1,046 141 62
------------ ------------ ------------
Total revenue............... 64,833 26,838 24,529
------------ ------------ ------------
Expenses:
Operations, maintenance and
management................... 10,285 4,235 3,854
Real estate taxes............. 14,294 6,380 6,304
Mortgage and other interest... 12,945 3,826 3,100
Depreciation and
amortization................. 9,910 5,413 3,692
Administrative and general.... 2,346 1,154 1,641
Provision for merger related
expenses and write-downs..... 473 -- --
------------ ------------ ------------
Total expenses.............. 50,253 21,008 18,591
------------ ------------ ------------
Income before allocation to
minority interest.............. 14,580 5,830 5,938
Income allocated to minority
interest....................... (64) -- --
------------ ------------ ------------
Net income...................... $ 14,516 $ 5,830 $ 5,938
============ ============ ============
Net income per share............ $ .78 (2) $ .62 $ .72
OTHER DATA:
Funds from operations(3)........ 24,262 (4) 11,243 9,630
Cash flows provided by (used
in):
Operating activities.......... 26,978 11,833 7,201
Investing activities.......... (15,036) (8,034) (32,612)
Financing activities.......... (4,042) (3,010) 27,180
Distributions per share......... 1.00 (2) .99 .96
Weighted average number of
shares outstanding............. 18,628 (2) 9,404 8,191
</TABLE>
<TABLE>
<CAPTION>
SEPTEMBER 30,
-----------------------
PRO FORMA(5) HISTORICAL
1995 1995
------------ ----------
(IN THOUSANDS)
<S> <C> <C>
BALANCE SHEET DATA:
Net real estate investments............................. $452,870 $158,392
Total assets............................................ 494,333 178,855
Mortgage and bank loans payable......................... 220,458 34,667
Total liabilities....................................... 248,809 42,700
Total stockholders' equity.............................. 241,078 136,155
</TABLE>
- --------
See footnotes on page 17.
15
<PAGE>
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
------------------------------------------------------------
HISTORICAL
PRO FORMA(1) ---------------------------------------------
1994 1994 1993 1992 1991 1990
------------ -------- -------- ------- ------- -------
(IN THOUSANDS EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C>
OPERATING DATA:
Income:
Rental income......... $83,705 $ 32,875 $ 22,875 $11,839 $10,352 $ 9,733
Other income.......... 1,360 112 594 308 202 72
------- -------- -------- ------- ------- -------
Total revenue....... 85,065 32,987 23,469 12,147 10,554 9,805
------- -------- -------- ------- ------- -------
Expenses:
Operations,
maintenance and
management........... 11,584 5,315 3,731 1,821 1,839 1,762
Real estate taxes..... 18,107 8,070 5,772 2,259 2,008 1,782
Mortgage and other
interest............. 14,282 4,524 2,947 3,596 3,006 2,516
Depreciation and
amortization......... 12,516 5,146 3,564 2,178 1,764 1,609
Administrative and
general.............. 4,438 2,288 1,920 1,331 1,233 1,422
Tenant abandonment.... -- -- -- 175 -- --
------- -------- -------- ------- ------- -------
Total expenses...... 60,927 25,343 17,934 11,360 9,850 9,091
------- -------- -------- ------- ------- -------
Income before gain on
sale of property and
allocation to minority
interest............... 24,138 7,644 5,535 787 704 714
Gain on sale of
property............... -- 983 -- -- -- --
Income allocated to
minority interest...... (392) -- -- -- -- --
------- -------- -------- ------- ------- -------
Net income.............. $23,746 $ 8,627 $ 5,535 $ 787 $ 704 $ 714
======= ======== ======== ======= ======= =======
Net income per share.... $ 1.27 (2) $ 1.05 $ .82 $ .40 $ .38 $ .36
OTHER DATA:
Funds from
operations(3).......... 35,852 (4) 12,790 9,099 2,965 2,468 2,323
Cash flows provided by
(used in):
Operating activities.. 32,765 10,877 6,532 3,343 1,390 3,343
Investing activities.. (38,623) (33,853) (39,349) (41,160) (9,921) (41,160)
Financing activities.. 5,944 22,219 28,135 41,453 10,245 41,453
Distributions per
share.................. 1.42 (2) 1.29 1.22 1.20 1.20 1.50
Weighted average number
of shares outstanding.. 18,628 (2) 8,192 6,716 1,972 1,898 1,987
<CAPTION>
DECEMBER 31,
HISTORICAL
---------------------------------------------
1994 1993 1992 1991 1990
-------- -------- ------- ------- -------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:
Net real estate investments.......... $155,554 $120,033 $83,750 $44,399 $35,957
Total assets......................... 166,579 127,931 93,326 50,345 39,055
Mortgage and bank loans payable...... 66,748 29,317 44,085 40,685 28,880
Total liabilities.................... 72,000 31,547 45,482 41,973 29,109
Total stockholders' equity........... 94,579 96,384 47,844 8,372 9,946
</TABLE>
- --------
See footnotes on page 17.
16
<PAGE>
- --------
(1) Pro forma data includes operating revenues and expenses for the nine months
ended September 30, 1995 and for the year ended December 31, 1994 for the
Bradley and Tucker properties acquired between January 1, 1994 and
September 30, 1995 for the period during which Bradley and Tucker did not
own them. For the nine months ended September 30, 1995 and the year ended
December 31, 1994, Bradley pro forma mortgage and other interest has been
increased by approximately $554,000 and $738,000, respectively, for the
borrowings estimated for payment of fees and expenses related to the
Merger. Bradley pro forma depreciation and amortization for the nine months
ended September 30, 1995 and the year ended December 31, 1994 has been
decreased by approximately $4,356,000 and $4,644,000, respectively, to give
effect to recording the acquisition of Tucker's properties at Bradley's
purchase price. Bradley pro forma administrative and general expense for
the nine months ended September 30, 1995 and the year ended December 31,
1994 has been decreased by approximately $1,050,000 and $1,400,000,
respectively, for estimated cost savings which will be achieved as a result
of the Merger.
(2) The Exchange Ratio used in the pro forma financial statements was .686 of a
share of Bradley Common Stock per share of Tucker Common Stock. If the
Exchange Ratio was .665, then pro forma net income per share for the nine
months ended September 30, 1995 and for the year ended December 31, 1994
would have been $.78 and $1.28, respectively; pro forma distributions per
share would have been $1.02 and $1.43, respectively; and pro forma weighted
average number of shares outstanding would have been 18,400,139 and
18,400,139, respectively.
(3) Bradley generally considers FFO to be an appropriate supplemental measure
of the performance of an equity REIT because it is predicated on a cash
flow analysis, as opposed to a measure predicated on generally accepted
accounting principles, which gives effect to non-cash items such as
depreciation. FFO, as defined by the National Association of Real Estate
Investment Trusts and as followed by Bradley, represents net income
(computed in accordance with generally accepted accounting principles),
excluding gains (or losses) from debt restructuring and sales of property,
plus depreciation and amortization, and after adjustments for
unconsolidated partnerships and joint ventures. Adjustments for
unconsolidated partnerships and joint ventures will be calculated to
reflect FFO on the same basis. Since the definition of FFO is a guideline,
computation of FFO may vary from one REIT to another. FFO does not
represent cash generated from operating activities in accordance with
generally accepted accounting principles and should not be considered as an
alternative to net income as an indicator of Bradley's operating
performance or as an alternative to cash flow as a measure of liquidity. In
addition, FFO is not necessarily indicative of cash available to fund cash
needs.
(4) Depreciation and amortization added back to net income in the calculation
of FFO is net of depreciation and amortization allocated to minority
interest of approximately $164,000 and $410,000 for the nine months ended
September 30, 1995 and the year ended December 31, 1994, respectively.
(5) The pro forma balance sheet was prepared as if the Merger had been
consummated on September 30, 1995.
17
<PAGE>
TUCKER PROPERTIES CORPORATION
SUMMARY HISTORICAL FINANCIAL DATA
The following tables set forth financial information for Tucker which should
be read in conjunction with, and is qualified in its entirety by, the
historical financial statements and notes thereto of Tucker incorporated by
reference into this Joint Proxy Statement/Prospectus.
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
---------------------------------------------
TUCKER PROPERTIES
CORPORATION PREDECESSOR BUSINESS
----------------- --------------------------
1994 1993(1) 1992 1991 1990
-------- -------- -------- ------- -------
(IN THOUSANDS EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C>
OPERATING DATA:
Total revenues................. $49,157 $ 27,354 $ 17,760 $11,264 $ 6,665
Income (loss) before allocation
to minority interests and
extraordinary item............ 8,244 (791) (646) (4,362) (1,702)
Net income (loss).............. 7,852 (11,390) (646) (4,362) (1,702)
Income (loss) per share before
extraordinary item............ .73 (.08) -- -- --
Net income (loss) per share.... .73 (1.05) -- -- --
<CAPTION>
AS OF DECEMBER 31,
---------------------------------------------
TUCKER PROPERTIES
CORPORATION PREDECESSOR BUSINESS
----------------- --------------------------
1994 1993 1992 1991 1990
-------- -------- -------- ------- -------
(IN THOUSANDS EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:
Net real estate investments.... $287,508 $272,691 $108,516 $84,168 $50,037
Total assets................... 322,160 300,252 118,026 89,008 52,831
Mortgage notes payable......... 125,474 111,974 118,225 86,790 49,355
Lines of credit borrowings..... 38,939 22,378 -- -- --
Predecessor business owners'
deficit....................... -- -- (10,718) (7,635) (3,795)
Stockholders' equity........... 135,184 144,168 -- -- --
Dividends/distributions
declared (per share).......... 1.46 .32 -- -- --
OTHER DATA:
Properties owned............... 13 11 4 2 0
Investments in joint ventures.. 1 1 3 3 3
</TABLE>
- --------
(1) Operating data for 1993 includes the results of the Predecessor Business
through October 11, 1993 (the date of the initial public offering of Tucker
Common Stock) plus the results of Tucker thereafter.
18
<PAGE>
COMPARATIVE PER SHARE DATA
The following table sets forth Bradley's and Tucker's historical per share
data, unaudited pro forma per share data giving effect to the Merger using the
purchase method of accounting and the equivalent pro forma combined per share
amounts of Tucker. The pro forma combined data are not necessarily indicative
of actual financial position or future operating results or that which would
have occurred or will occur upon consummation of the Merger.
<TABLE>
<CAPTION>
NINE MONTHS ENDED SEPTEMBER 30, 1995 YEAR ENDED DECEMBER 31, 1994
------------------------------------- -------------------------------------
TUCKER TUCKER
HISTORICAL PRO FORMA(A) EQUIVALENT(B) HISTORICAL PRO FORMA(A) EQUIVALENT(B)
---------- ------------ ------------- ---------- ------------ -------------
<S> <C> <C> <C> <C> <C> <C>
Net Income
Bradley.................. $ .62 $ .78 $ 1.05 $ 1.27
Tucker................... .14 $ .54 .73 $.87
Cash
Distributions/Dividends(C)
Bradley.................. .99 1.00 1.29 1.42
Tucker................... .86 .69 1.46 .97
Book Value per Common Share
Bradley.................. 12.13 12.92 11.54 13.14
Tucker................... 11.76 8.86 12.48 9.01
</TABLE>
- --------
(A) The pro forma combined per share data for Bradley and Tucker for the nine
months ended September 30, 1995 and the year ended December 31, 1994 have
been prepared as if the Bradley capital transactions occurring between
January 1, 1994 and September 30, 1995 and the Merger had occurred prior to
the beginning of the period presented, resulting in weighted average shares
outstanding of 18,627,533 for both periods. The pro forma combined book
value per share for Bradley and Tucker has been prepared assuming that in
the Merger each share of Tucker Common Stock is converted into .686 of a
share of Bradley Common Stock, resulting in total outstanding shares of
Bradley Common Stock of 18,654,826 at September 30, 1995. Assuming that
each share of Tucker Common Stock is converted into .665 of a share of
Bradley Common Stock, the pro forma combined book value per share would be
$13.64 at September 30, 1995 (based upon 18,427,432 shares outstanding) and
$13.87 at December 31, 1994 (based upon 18,405,362 shares outstanding).
(B) The equivalent pro forma combined per share amounts of Tucker are
calculated by multiplying pro forma Net Income per share of Bradley Common
Stock, pro forma Cash Distributions/Dividends per share of Bradley Common
Stock and pro forma Book Value per share of Bradley Common Stock by an
assumed Exchange Ratio of .686. If the Exchange Ratio was .665, then
equivalent pro forma Net Income per share for the nine months ended
September 30, 1995 and for the year ended December 31, 1994 would have been
$.52 and $.85, respectively; equivalent pro forma Cash
Distributions/Dividends per share would have been $.68 and $.95,
respectively; equivalent pro forma Book Value per share would have been
$9.07 and $9.22, respectively; and equivalent pro forma number of shares
outstanding would have been 7,200,808 and 7,200,808, respectively.
(C) Bradley currently pays a quarterly distribution of $.33 per share. Bradley
currently intends to continue to pay such regular quarterly distribution.
Future distributions by Bradley will be at the discretion of its Board of
Directors and will depend on certain factors. With respect to Bradley's and
Tucker's 1994 dividends, approximately 26% and 38%, respectively, of these
dividends represented a return of capital. See "--Distribution and Dividend
Policy."
19
<PAGE>
COMPARATIVE MARKET DATA
The Bradley Common Stock has traded on the NYSE (symbol "BTR") since October
18, 1994 and before that date traded for many years on the American Stock
Exchange. The Tucker Common Stock has traded on the NYSE (symbol "TUC") since
October 5, 1993. The table below sets forth, for the calendar quarters
indicated, the high and low sales prices per share reported by the NYSE
Composite Tape or on the American Stock Exchange, as the case may be, and
dividends paid for the Bradley Common Stock and the Tucker Common Stock
(adjusted in the case of Bradley for a reverse stock split in 1994).
<TABLE>
<CAPTION>
BRADLEY COMMON STOCK TUCKER COMMON STOCK
------------------------- -------------------------
PER SHARE PER SHARE
HIGH LOW DIVIDENDS HIGH LOW DIVIDENDS
------- ------- --------- ------- ------- ---------
<S> <C> <C> <C> <C> <C> <C>
1994:
First Quarter............ $18 3/4 $16 3/4 $.32 $18 1/2 $16 3/8 $.36
Second Quarter........... $19 1/4 $16 3/4 $.32 $18 1/8 $15 5/8 $.36
Third Quarter............ $17 3/4 $14 1/2 $.32 $16 3/4 $14 7/8 $.38
Fourth Quarter........... $15 3/4 $13 3/8 $.33 $17 $11 1/2 $.36
1995:
First Quarter............ $16 3/4 $14 7/8 $.33 $12 7/8 $11 $.36
Second Quarter........... $16 3/8 $15 $.33 $13 5/8 $10 5/8 $.25
Third Quarter............ $16 7/8 $15 3/8 $.33 $12 $10 $.25
Fourth Quarter........... $16 1/4 $13 1/8 $.33 $11 1/2 $ 8 5/8 $.25
1996:
First Quarter (through
January 8, 1996)........ $13 7/8 $13 1/8 $ 9 $ 8 5/8
</TABLE>
The following table sets forth the last reported sales prices per share of
Bradley Common Stock and Tucker Common Stock (i) on September 8, 1995, the last
trading day preceding public announcement that Bradley and Tucker were
negotiating a possible acquisition of Tucker by Bradley, (ii) on October 27,
1995, the last trading day preceding public announcement of the terms of the
Merger, and (iii) on January , 1996, the most recent date for which prices
were available prior to printing this Joint Proxy Statement/Prospectus.
<TABLE>
<CAPTION>
BRADLEY TUCKER
COMMON COMMON
STOCK STOCK
------- -------
<S> <C> <C>
September 8, 1995.......................................... $16 7/8 $10 1/2
October 27, 1995........................................... $15 $10 3/8
January , 1996............................................ $ $
</TABLE>
BECAUSE THE MARKET PRICE OF BRADLEY COMMON STOCK IS SUBJECT TO FLUCTUATION,
THE MARKET VALUE OF THE BRADLEY COMMON STOCK THAT HOLDERS OF TUCKER COMMON
STOCK WILL RECEIVE IN THE MERGER MAY INCREASE OR DECREASE PRIOR TO AND
FOLLOWING THE MERGER. STOCKHOLDERS ARE URGED TO OBTAIN CURRENT MARKET
QUOTATIONS FOR BRADLEY COMMON STOCK AND TUCKER COMMON STOCK.
20
<PAGE>
DISTRIBUTION AND DIVIDEND POLICY
BRADLEY
Bradley currently pays a regular quarterly distribution of $.33 per share of
Bradley Common Stock (which, annualized, equals $1.32 per share).
Further distributions by Bradley will be at the discretion of its Board of
Directors and will depend on Bradley's actual cash available for distribution,
its financial condition, capital requirements, the annual distribution
requirements under the REIT provisions of the Code and such other factors as
the Board of Directors deems relevant. However, Bradley currently intends to
continue to pay regular quarterly distributions of $.33 per share of Bradley
Common Stock. Management believes that based in part on unaudited pro forma per
share data after giving effect to the Merger, there will be sufficient cash
available to make such distributions. Assuming the Surviving Company continues
to make regular quarterly distributions at Bradley's current rate of $.33 per
share of Bradley Common Stock, each stockholder of Tucker would be entitled to
receive a quarterly distribution equivalent to $.219 per share of Tucker Common
Stock (assuming an Exchange Ratio of .665) or $.226 per share of Tucker Common
Stock (assuming an Exchange Ratio of .686).
Bradley anticipates that cash available for distribution will exceed earnings
and profits due to non-cash expenses, primarily depreciation and amortization,
to be incurred by Bradley. Distributions by Bradley to the extent of its
current or accumulated earnings and profits for federal income tax purposes,
other than capital gain dividends, will be taxable to stockholders as ordinary
dividend income. Any dividends designated by Bradley as capital gain dividends
generally will give rise to capital gain for stockholders. Distributions in
excess of Bradley's current or accumulated earnings and profits will be treated
as a non-taxable reduction of a stockholder's basis in its shares of Bradley
Common Stock to the extent thereof, and thereafter as capital gain.
Distributions treated as non-taxable reductions in basis will have the effect
of deferring taxation until the sale of a stockholder's shares of Bradley
Common Stock or future distributions in excess of the stockholder's basis in
the shares of Bradley Common Stock.
In order to maintain its qualification as a REIT, Bradley will be required to
make annual distributions to its stockholders in an amount equal to at least
95% of its taxable income (excluding net capital gains). In the event that cash
available for distribution is insufficient to meet these distribution
requirements, Bradley could be required to borrow the amount of the deficiency
or sell assets to obtain the cash necessary to make the distributions required
to retain REIT status.
Bradley maintains a Dividend Reinvestment and Share Purchase Plan pursuant to
which stockholders of record may elect to reinvest cash distributions and to
make limited additional cash payments (minimum $100, maximum $2,500 per quarter
by any one stockholder of record) to purchase newly issued shares of Bradley
Common Stock at 97% of the current market value. Bradley may suspend or amend
such plan at any time. This Joint Proxy Statement/Prospectus does not
constitute an offer of any shares of Bradley Common Stock that may be issued by
Bradley in connection with a distribution reinvestment program, and such shares
may only be purchased pursuant to a separate prospectus contained in an
effective registration statement.
TUCKER
Effective the second quarter of 1995, the Board of Directors of Tucker
reduced Tucker's quarterly cash dividend from $.36 per share to $.25 per share.
Tucker's quarterly cash dividend had previously been reduced from $.38 per
share to $.36 per share, effective the fourth quarter of 1994. Annualized, the
quarterly dividend of $.25 per share equals $1.00 per share of Tucker Common
Stock.
21
<PAGE>
RISK FACTORS
In considering whether to approve the Merger and the Merger Agreement,
stockholders of Bradley and Tucker should consider, in addition to the other
information in this Joint Proxy Statement/Prospectus, the material discussed
in this section.
SUBSTANTIAL DEBT OBLIGATIONS AND TERMS OF DEBT
The Surviving Company's pro forma debt obligations after giving effect to
the Merger will aggregate approximately $220.5 million as compared to $34.7
million for Bradley as of September 30, 1995. The pro forma ratio of debt to
Total Market Capitalization of the Surviving Company will be approximately 46%
as compared to 18% for Bradley as of September 30, 1995. This increase in the
Surviving Company's leverage and its pro forma ratio of debt to Total Market
Capitalization could increase the risk of default under its indebtedness.
Failure to pay the debt obligations when due could result in the Surviving
Company losing its interest in the properties collateralizing such
obligations. Certain of Tucker's and Bradley's credit agreements provide that
a default with respect to any other indebtedness of such company shall cause
an event of default under that credit agreement and accelerate the company's
obligations thereunder.
Bradley believes that the ratio of debt to Total Market Capitalization is an
important factor to consider in evaluating a REIT's debt level because this
ratio is one indicator of a company's ability to borrow funds. Bradley
believes that using the ratio of debt to book value of assets is not as
reliable an indicator of a REIT's debt level because the book value of a
REIT's assets indicates only the depreciated value of the REIT's property
without consideration of the market value of such assets at a particular point
in time. The use of the ratio of debt to Total Market Capitalization also has
certain risks because the Total Market Capitalization of a company is more
variable than the book value because it is dependent on the current stock
price of a company. Accordingly, there can be no assurance that the use of the
ratio of debt to Total Market Capitalization in evaluating the Surviving
Company's debt level will adequately protect it from being too highly
leveraged.
In particular, the maturity of the $100 million Tucker REMIC Note in
September 2000 may increase the Surviving Company's risk of default on its
indebtedness. Prior to the date hereof, each of Tucker and Bradley and their
predecessors have been able to refinance debt when it has become due on terms
which they believe to be commercially reasonable. There can be no assurance
that the Surviving Company will continue to be able to repay or to refinance
its indebtedness relating to the Tucker REMIC Note or any of its other
indebtedness on commercially reasonable or any other terms.
The Surviving Company's pro forma debt obligations subject to floating
interest rates at September 30, 1995, after giving effect to the Merger, will
aggregate approximately $82.4 million at a weighted average interest rate of
approximately 8.266% per annum as compared to $9.8 million at a weighted
average interest rate of approximately 8.065% per annum for Bradley as of
September 30, 1995. To the extent the Surviving Company's exposure to
increases in interest rates is not eliminated through interest rate protection
or cap agreements, such increases will adversely affect the Surviving
Company's net income, FFO and cash available for distribution and may affect
the amount of distributions it can make to its stockholders and holders of TOP
Units.
The Bradley Line of Credit requires that Bradley maintain interest rate
protection, at a rate satisfactory to the lead lender, with respect to at
least $30 million of indebtedness. As required, Bradley entered into an
interest rate protection agreement (the "Interest Rate Protection Agreement")
in January 1994 with its lead lender, which has the effect of mitigating
increases in interest rates available to Bradley under the Bradley Line of
Credit with respect to $30 million of indebtedness (the "Protected Amount") by
reimbursing Bradley the amount by which the then applicable three-month LIBOR
Rate (as defined in the Interest Rate Protection Agreement) for the Protected
Amount exceeds the then applicable Cap Rate (as described below) for the
Protected Amount. The Cap Rate is 8.7% for the period January 30, 1995 through
January 28, 1996 and 8.9% for the period January 29, 1996 through January 28,
1997. Bradley is currently in discussions with its lead lender regarding the
replacement of the Bradley Line of Credit with a $150 million unsecured
revolving credit facility. Bradley anticipates that this new credit facility
will also require Bradley to obtain interest rate protection for an amount in
excess of the amount currently required under the Bradley Line of Credit,
which amount could be up to $100
22
<PAGE>
million. There can be no assurance that such an interest rate protection
agreement will be available at that time. If an interest rate protection
agreement is required and obtained, there can be no assurance that the parties
to such interest rate protection agreements will honor their obligations or
that such interest rate caps will be effective. Furthermore, if an interest
rate cap is obtained for a period which expires prior to the expiration of the
new credit facility, there can be no assurance that the Surviving Company will
be able to enter into similar agreements.
The foregoing risks associated with the debt obligations of the Surviving
Company may adversely affect the market price of Bradley Common Stock and may
inhibit the Surviving Company's ability to raise capital and issue equity in
both the public and private markets following the consummation of the Merger.
RESTRICTIONS ON ABILITY OF SURVIVING COMPANY TO DISPOSE OF PROPERTIES
Pursuant to the terms of the Tucker REMIC Indenture, prior to October 1997,
principal payments on the Tucker REMIC Note cannot be made and the properties
collateralizing the Tucker REMIC Note cannot be sold. If the Surviving Company
wishes either to prepay all or part of the $100 million principal of the
Tucker REMIC Note or to sell any of the properties collateralizing the Tucker
REMIC Note after such date, it will incur significant prepayment penalties.
The prepayment of principal of the Tucker REMIC Note requires an additional
payment of the greater of either (i) 1% of the amount of principal being
prepaid or (ii) the product of (A) the difference between the outstanding
principal balance of the Tucker REMIC Note before prepayment and the present
value of all remaining interest and principal payments thereon and (B) the
amount of principal being prepaid divided by the outstanding principal balance
of the Tucker REMIC Note. After October 1997, in order to release any of the
properties collateralizing the Tucker REMIC Note from the lien so that such
properties may be sold, the Tucker REMIC Indenture requires that certain
additional conditions be met, including that (i) the aggregate amount of
principal repaid on the Tucker REMIC Note equal at least 125% of the amount of
principal allocated to the property to be released and (ii) certain debt
service coverage ratios continue to be satisfied.
Pursuant to the terms of the Amended TOP Partnership Agreement, for a period
of 24 months after the Effective Time, the general partner of TOP may not
elect to dissolve TOP or sell all or substantially all of the assets of TOP
without the consent of a majority in interest of the limited partners, except
in connection with the merger or other business combination of the general
partner or its affiliates. Thus, Bradley is restricted from disposing of all
or substantially all of the properties held by TOP. See "The Companies--
Surviving Company" for information regarding these properties.
REDUCTIONS IN DIVIDENDS PER SHARE FOR TUCKER STOCKHOLDERS FOLLOWING
CONSUMMATION OF THE MERGER
Assuming the Surviving Company continues to make regular quarterly
distributions at Bradley's current rate of $.33 per share following
consummation of the Merger, each Tucker stockholder will receive an equivalent
quarterly dividend payment of $.219 per share (assuming an Exchange Ratio of
.665) or $.226 per share (assuming an Exchange Ratio of .686), as compared to
Tucker's most recent quarterly dividend of $.25 per share.
STOCK PRICE FLUCTUATIONS
The relative stock prices of Bradley Common Stock and Tucker Common Stock at
the Effective Time may vary significantly from the prices as of the date of
execution of the Merger Agreement, the date hereof or the date on which
stockholders vote on the Merger and the Merger Agreement, due to changes in
the business, operations and prospects of Bradley or Tucker, market
assessments of the likelihood that the Merger will be consummated and the
timing thereof, general market and economic conditions and other factors such
as market perception of REIT stocks, retail stocks and REIT retail stocks
generally. There can be no assurance that the price of Bradley Common Stock
will not decline between the date of this Joint Proxy Statement/Prospectus and
the Effective Time. A change in the stock price of Bradley Common Stock will
change the Exchange Ratio as follows. If the Closing Price of Bradley Common
Stock is $16.00 or more, each share of Tucker Common Stock will be exchanged
for .665 of a share of Bradley Common Stock. If the Closing Price is between
$15.50 and
23
<PAGE>
$16.00, the Exchange Ratio will be determined by dividing $10.64 by the
Closing Price. If the Closing Price is $15.50 or less, the Exchange Ratio will
be .686 of a share of Bradley Common Stock. In considering whether to approve
the Merger and the Merger Agreement, stockholders of Bradley and Tucker should
consider the risks associated with a potential change in the stock price of
Bradley Common Stock between the date of this Joint Proxy Statement/Prospectus
and the Effective Time.
SHARES AVAILABLE FOR FUTURE SALE COULD ADVERSELY AFFECT PRICE OF BRADLEY
COMMON STOCK
Except for shares issued to affiliates of Tucker, all of the shares of
Bradley Common Stock to be issued to Tucker stockholders in connection with
the Merger (approximately 7,125,941 shares assuming an Exchange Ratio of .665
or 7,170,972 shares assuming an Exchange Ratio of .686) will be freely
transferable. In addition, in certain circumstances, holders of TOP Units will
receive upon redemption of their TOP Units approximately 305,113 shares
(assuming an Exchange Ratio of .665) or 314,749 shares (assuming an Exchange
Ratio of .686) of Bradley Common Stock, which will be freely transferable
following such redemption. Sales of a substantial number of shares of Bradley
Common Stock by current Tucker stockholders and unitholders following the
consummation of the Merger, or the perception that such sales could occur,
could adversely affect the market price for shares of Bradley Common Stock
after the Merger.
CONFLICTS OF INTEREST ARISING FROM BENEFITS TO CERTAIN TUCKER DIRECTORS AND
OFFICERS
In considering the recommendation of the Boards of Directors of Tucker and
Bradley to approve the Merger and the Merger Agreement, stockholders should be
aware that conflicts of interest exist because certain members of the
management and the Board of Directors of Tucker have certain interests in, and
will receive benefits from, the Merger that are separate from the interests
of, and benefits to, stockholders of Tucker. Generally, such benefits may have
resulted in conflicts of interest for such recipients in negotiating the
Merger and may result in conflicts of interest with respect to such recipients
in determining whether Tucker should consummate the Merger. Tucker
stockholders that are not directors or officers of Tucker will not receive
these benefits. See "The Merger--Conflicts of Interest Arising from Benefits
to Certain Officers and Directors of Tucker." In addition, the Management
Directors faced a conflict of interest during the negotiation of their
environmental indemnity obligations under the Amended TOP Partnership
Agreement. In this regard, it should be noted that these indemnity obligations
were limited in the Amended TOP Partnership Agreement to apply only to certain
third party claims. See "The Merger Agreement--Amended TOP Partnership
Agreement--Environmental Matters."
DIFFERENCES BETWEEN RIGHTS OF TUCKER STOCKHOLDERS AND BRADLEY STOCKHOLDERS AND
POTENTIAL ANTI-TAKEOVER EFFECT OF CERTAIN PROVISIONS
The rights of stockholders of Tucker, a Maryland corporation, currently are
governed by Maryland law, the Tucker Charter and the Tucker Bylaws. Upon
completion of the Merger, stockholders of Tucker will become stockholders of
Bradley, a Maryland corporation, and their rights as stockholders of Bradley
will be governed by Maryland law, the Bradley Charter and the Bradley Bylaws.
Certain differences between the rights of stockholders of Tucker and the
rights of stockholders of Bradley include the following: (i) the affirmative
vote of two-thirds of the outstanding shares of Tucker Common Stock is
required to amend the Tucker Charter or to approve a merger, consolidation,
share exchange or sale of all or substantially all of the assets of Tucker,
whereas the affirmative vote of a majority of the outstanding shares of
Bradley Common Stock is required for comparable actions involving Bradley;
(ii) the Bradley Charter provides for three classes of directors, with the
term of office of one class expiring each year, whereas the Tucker Charter
provides that all of its directors are elected each year at the annual meeting
of stockholders; (iii) the holders of not less than 10% of the outstanding
shares of Tucker Common Stock may call a special meeting of Tucker's
stockholders, whereas the holders of not less than 25% of the outstanding
shares of Bradley Common Stock may call a special meeting of Bradley's
stockholders; (iv) the Tucker Board of Directors has exempted certain
transactions from the Maryland business combination statute (including the
Merger), whereas Bradley has not made any such exemptions (except that
Bradley's Board of Directors has exempted the Merger from such statute); (v)
the Bradley Charter generally limits any holder from acquiring more than 9.8%
of the value of all
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outstanding capital stock of Bradley while the Tucker Charter generally limits
any holder from acquiring more than 7% of the value of the issued and
outstanding stock of Tucker (in the case of Bradley, this ownership limitation
does not apply to shares of capital stock acquired pursuant to certain all
cash tender offers for all of the outstanding shares of capital stock); and
(vi) the holders of Tucker Common Stock may only amend certain provisions of
the Tucker Bylaws, whereas the holders of Bradley Common Stock may amend any
provision of the Bradley Bylaws. See "Comparison of Stockholder Rights."
Certain of the provisions described above could have a potential anti-
takeover effect on the Surviving Company. The staggered Board provision in the
Bradley 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
Surviving Company in control for a longer period of time. The staggered Board
provision and the provision in Bradley's By-laws requiring holders of at least
25% of the outstanding shares of Bradley Common Stock to call a special
meeting of stockholders may have the effect of making it more difficult for a
third party to acquire control of Bradley without the consent of its Board of
Directors, including certain acquisitions which stockholders may deem to be in
their best interest.
SUBSTANTIAL EXPENSES AND PAYMENTS IF MERGER FAILS TO OCCUR
No assurance can be given that the Merger will be consummated. If the Merger
is not consummated, Tucker and Bradley will have incurred substantial expenses
in connection with the transaction. If the Merger Agreement is terminated
under certain circumstances, Tucker shall be required to pay Bradley the
Termination Amount of $3,000,000 plus Bradley's out-of-pocket expenses, up to
$2,000,000. If the Merger Agreement is terminated in certain other
circumstances, Tucker will be required to reimburse Bradley for its expenses,
up to $2,000,000. See "The Merger Agreement--Termination Amount and Expenses."
REAL ESTATE INVESTMENT CONSIDERATIONS
Dependence on Midwestern Region and Retail Industry
A substantial percentage of the Surviving Company's properties will be
located in the Midwestern region of the United States and such properties
consist predominantly of community shopping centers. The Surviving Company's
performance therefore will be linked to economic conditions in the Midwest and
in the market for retail space generally. The market for retail space has been
adversely affected by the ongoing consolidation in the retail sector, the
adverse financial condition of certain large companies in this sector and the
excess amount of retail space in certain markets. To the extent that these
conditions impact the market rents for retail space, they could result in a
reduction of net income, FFO and cash available for distribution and thus
affect the amount of distributions the Surviving Company can make to its
stockholders.
In addition, the Surviving Company will predominantly own and operate retail
shopping centers catering to retail tenants. To the extent that the investing
public has a negative perception of the retail sector, the value of shares of
common stock of the Surviving Company may be negatively impacted, thereby
resulting in such shares trading at a discount below the inherent value of the
assets of the Surviving Company as a whole.
Financial Condition and Bankruptcy of Tenants
Since substantially all of Bradley's and Tucker's income has been, and
substantially all of the Surviving Company's income will continue to be,
derived substantially from rental income from retail shopping centers, the
Surviving Company's net income, FFO and cash available for distribution would
be adversely affected if a significant number of the Surviving Company's
tenants were unable to meet their obligations to the Surviving Company or if
the Surviving Company were unable to lease on economically favorable terms a
significant amount of space in its shopping centers. In addition, in the event
of default by a tenant, the Surviving Company may experience delays and incur
substantial costs in enforcing its rights as landlord.
At any time, a tenant of the Surviving Company's properties may seek the
protection of the bankruptcy laws, which could result in the rejection and
termination of the tenant lease. Such an event could cause a reduction of net
income, FFO and cash available for distribution and thus affect the amount of
distributions the
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Surviving Company can make to its stockholders. No assurance can be given that
any present tenant which has filed for bankruptcy protection will continue
making payments under its lease or that other 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 Surviving Company, the Surviving Company may experience delays in
enforcing its rights as lessor or sublessor and may incur substantial costs
and experience significant delays associated with protecting its investment,
including costs incurred in renovating and releasing the property.
Potential Negative Effect of One North State Property
On a pro forma basis, for the nine months ended September 30, 1995, $10.6
million or 16% of the total revenue of the Surviving Company is derived from
rents and expense reimbursements from tenants of Tucker's One North State
property, which is a "mixed use" property located in downtown Chicago. The
total charges currently being paid by certain of this property's tenants may
be in excess of current market rates. The leases of these tenants begin to
expire in 2001. One office tenant, however, has the option exercisable on or
beforeApril 1, 1996 to terminate its lease, effective as of April 1, 1998,
upon payment of a $1.8 million cancellation fee. This tenant has indicated
that it will move out of this space prior to the expiration of its lease, but
has not yet determined whether or not it will exercise its early termination
right. Pursuant to the terms of the Tucker REMIC Indenture, this termination
fee is required to be paid into a reserve account which can be used, for among
other things, to pay for tenant alterations, leasing commissions and other
lease inducements directly related to this space. Any unused amount of this
reserve account must be used to repay the principal amounts owed under the
Tucker REMIC Note. The inability of the Surviving Company to lease such
property, or a significant reduction in the amount of rent and expense
reimbursements paid by the tenants of such property, could have an adverse
impact on the operating results of the Surviving Company.
POSSIBLE ENVIRONMENTAL LIABILITIES
Under various federal, state and local laws, ordinances and regulations, an
owner of real estate is liable for the costs of removal or remediation of
certain hazardous or toxic substances on or in such property. Such laws often
impose such liability without regard to whether the owner knew of, or was
responsible for, the presence of such hazardous or toxic substances. The
presence of such substances, or the failure to properly remediate such
substances, may adversely affect the owner's ability to sell or rent such
property or to use such property as collateral in its borrowings. All of the
properties of Tucker and Bradley 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 of Bradley or Tucker
aware of any environmental liability with respect to the properties that such
management believes would have a material adverse effect on the Surviving
Company's business, assets or results of operations. No assurance can be given
that existing environmental studies with respect to the properties reveal all
environmental liabilities or that any prior owner of any such property did not
create any material environmental condition not known to Bradley or Tucker.
Phase II site assessments of Tucker's Commons of Chicago Ridge property have
disclosed the presence of contaminants in fill material and soil at the
property that could be associated with the property's former use as a landfill
and as the former site of an asphalt plant and storage tanks for petroleum
products (which storage tanks have been removed from the property), but not at
such levels as would require reporting to environmental agencies. These Phase
II site assessments also disclosed the presence in the groundwater of
contaminants similar to those detected in the soil samples. Environmental
assessments of the property have also detected methane gas, probably
associated with the former use of the property as a landfill. A regular
maintenance program has been implemented by Tucker 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
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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 Surviving Company to take action to
address the contamination, which action could range from ongoing monitoring to
remediation of the contamination. Based on the information currently
available, the managements of Tucker and Bradley do not believe that the cost
of responding to such contamination would be material to the Surviving
Company.
In connection with the execution of the Merger Agreement, Bradley, TOP and,
if the Merger is consummated, the Management Directors have agreed to share
the cost of having an outside consultant conduct a new Phase II investigation
of the soil and groundwater of the Commons of Chicago Ridge property and to
prepare a report recommending what actions the Surviving Company should take
with respect to such matters. It is currently anticipated that this outside
consultant will be engaged immediately following the consummation of the
Merger. In the event that Bradley decides to implement any of the
recommendations of such consultant (the "Recommended Work"), TOP and the
Management Directors have each agreed to each pay fifty percent of the costs
of the Recommended Work, with the Management Directors' aggregate liability
for the Recommended Work limited to a maximum of $200,000. After the
consummation of the Merger, Bradley will hold 95.9% of the outstanding TOP
Units and, as a consequence, will be responsible for 95.9% of TOP's share of
the costs of the Recommended Work. Based on the information currently
available, neither the managements of Bradley and Tucker nor the Management
Directors believe that the Surviving Company's aggregate liability for the
Recommended Work will have a material effect on the financial condition,
liquidity or operating results of the Surviving Company. See "The Merger
Agreement--Amended TOP Partnership Agreement."
At the time of Tucker's initial public offering, the Management Directors
agreed to indemnify Tucker and TOP against certain potential environmental
liabilities and expenses relating to the Commons of Chicago Ridge property.
These indemnification obligations will be amended in certain respects by the
Amended TOP Partnership Agreement. As amended, the Management Directors
generally have agreed to indemnify the Surviving Company, TOP and its
subsidiaries and affiliates against all claims, losses, costs and expenses
incurred by such parties arising out of any administrative, regulatory or
judicial action, suit, investigation or proceeding in connection with any
applicable environmental health or safety law regarding hazardous substances,
materials, wastes or petroleum products, or any common law right 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, Bradley has agreed to keep the Management
Directors reasonably informed of various activities relating to the property
and to consult with the Management Directors with respect to any potential
claims, settlements and remediation which could trigger the indemnification
obligations of the Management Directors. Regardless of such indemnification,
based on the information currently available, the managements of Tucker and
Bradley do 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 Surviving
Company.
The Management Directors' indemnification obligations currently are secured
by 102,308 shares of Tucker Common Stock and 427,339 TOP Units acquired by the
Management Directors in connection with Tucker's initial public offering and,
upon consummation of the Merger, will be secured by 70,183 shares of Bradley
Common Stock (into which their respective shares of Tucker Common Stock will
be exchanged) and 293,154 TOP Units held or otherwise beneficially owned by
each of the Management Directors and their family members as of the Effective
Time (in each case assuming an Exchange Ratio of .686; an Exchange Ratio of
.665 would yield 68,034 shares of Bradley Common Stock and 284,180 TOP Units,
respectively). After the Effective Time, the TOP Units generally will be
exchangeable for cash or shares of Bradley Common Stock (subject to certain
rights of Bradley), and all such shares of Bradley Common Stock may be
transferred at any time, subject to compliance with applicable federal
securities laws. Accordingly, there can be no assurance that the Management
Directors will hold any shares of Bradley Common Stock or TOP Units at the
time, if ever, when Bradley attempts to realize this security interest or that
the shares of Bradley Common Stock or TOP Units held by the Management
Directors will be sufficient to cover their indemnification obligations.
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ADVERSE CONSEQUENCES OF FAILURE TO QUALIFY AS A REIT AND OTHER TAX RISKS
RELATING TO OPERATION OF BRADLEY AFTER THE EFFECTIVE TIME
Bradley (including its predecessor, Bradley Real Estate Trust) believes that
it has operated in a manner that permits it to qualify as a REIT under the
Code for each taxable year since its formation in 1961. Although management of
Bradley believes that Bradley is organized and is operating in such a manner,
no assurance can be given that Bradley will be able to continue to operate in
a manner so as to qualify or remain so qualified. Qualification as a REIT
involves the application of highly technical and complex Code provisions for
which there are only limited judicial or administrative interpretations and
the determination of various factual matters and circumstances not entirely
within Bradley's control. For example, in order to qualify as a REIT, at least
95% of Bradley's gross income in any year must be derived from qualifying
sources and Bradley must make distributions to stockholders aggregating
annually at least 95% of its REIT taxable income (excluding net capital
gains). In addition, no assurance can be given that new legislation, new
regulations, administrative interpretations or court decisions will not change
the tax laws with respect to qualification as a REIT or the federal income tax
consequences of such qualification. Bradley, however, is not aware of any
currently pending tax legislation that would adversely affect its ability to
continue to operate as a REIT.
If Bradley fails to qualify as a REIT, Bradley will be subject to federal
income tax (including any applicable alternative minimum tax) on its taxable
income at corporate rates. In addition, unless entitled to relief under
certain statutory provisions, Bradley will also be disqualified from treatment
as a REIT for the four taxable years following the year during which
qualification is lost. This treatment would reduce the net earnings of Bradley
available for investment or distribution to stockholders because of the
additional tax liability to Bradley for the year or years involved. In
addition, distributions would no longer be required to be made. To the extent
that distributions to stockholders would have been made in anticipation of
Bradley's qualifying as a REIT, Bradley might be required to borrow funds or
to liquidate certain of its investments to pay the applicable tax. The failure
to qualify as a REIT would also constitute a default under certain debt
obligations of Bradley.
Tucker believes that, since its formation, it has operated so as to qualify
as a REIT under the Code. The failure of Tucker to qualify as a REIT would
have consequences generally similar to the consequences of any failure by
Bradley to qualify as a REIT, as described above. If Tucker has failed to
qualify as a REIT in any year in which it elected so to qualify and
consequently becomes liable to pay taxes as a regular non-REIT corporation,
the liabilities of Tucker that Bradley will assume upon effectiveness of the
Merger will include such tax liability. Moreover, if it were subsequently
determined that Tucker had earnings and profits as determined for federal
income tax purposes (notwithstanding the requirement in the Merger Agreement
that Tucker distribute all earnings and profits prior to the Merger) or if
former stockholders of Tucker acquired 50% or more in value of the shares of
Bradley Common Stock as a result of or following the Merger, Tucker's failure
to qualify as a REIT also could disqualify Bradley as a REIT.
Bradley's acquisition of Tucker's general partner interest in TOP and
Tucker's indirect interests in the subsidiary partnerships of TOP involves
special tax considerations, including the qualification of each such
partnership as a "partnership" for federal income tax purposes, which may
adversely impact Bradley's ability to qualify as a REIT following the Merger.
See "The Merger--Material Federal Income Tax Consequences--Tax Aspects of
Bradley's Investment in TOP."
The failure to qualify as a REIT would have a material adverse effect on an
investment in Bradley as the taxable income of Bradley would be subject to
federal income taxation at corporate rates, and, therefore, the amount of cash
available for distribution to its stockholders would be reduced or eliminated.
COMPETITION
All of the properties owned by Bradley and by Tucker are located in
developed areas. There are numerous other retail properties and real estate
companies within the market area of each such property which will compete with
the Surviving Company for tenants and development and acquisition
opportunities. The number of
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competitive retail properties and real estate companies in such areas could
have a material effect on (i) the Surviving Company's ability to rent space at
the properties and the amount of rents currently charged and (ii) development
and acquisition opportunities. The Surviving Company will compete for tenants
and acquisitions with others who may have greater resources than the Surviving
Company.
OWNERSHIP LIMITS
In order to maintain its qualification as a REIT, not more than 50% in value
of the outstanding shares of the Surviving Company may be owned, directly or
indirectly, by five or fewer individuals (as defined in the Code). To minimize
the possibility that Bradley will fail to qualify as a REIT under this test,
the Bradley Charter (which will continue as the charter of the Surviving
Company) authorizes the directors to take such action as may be required to
preserve its qualification as a REIT and generally limits the ownership of
shares of Bradley Common Stock by any particular stockholder to 9.8% of the
value of the outstanding shares of Bradley Common Stock. The Tucker Charter
contains comparable ownership limits, which generally prohibit any particular
stockholder from owning more than 7% of the value of the outstanding shares of
Tucker Common Stock. See "Comparison of Stockholder Rights--Restrictions on
the Ownership, Transfer or Issuance of Shares."
The ownership limits in the Bradley Charter, as well as Bradley's authority
to issue preferred stock and other provisions in the Bradley Charter and the
Bradley Bylaws, may delay, defer or prevent a change in control of Bradley and
may also (i) deter certain tender offers for the shares of Bradley Common
Stock, which might be attractive to certain stockholders, or (ii) limit the
opportunity for stockholders to receive a premium for their shares of Bradley
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 Bradley Common Stock, or otherwise effect a change in control of
Bradley. No change in the ownership limits of Bradley Common Stock will be
effected as a result of the Merger.
DISSENTERS' RIGHTS
Under the MGCL, stockholders of Bradley and Tucker do not have dissenters'
rights in connection with the Merger.
THE COMPANIES
BRADLEY
Bradley is one of the nation's oldest continuously qualified REITs under the
Code. Originally organized in 1961 as a Massachusetts business trust under the
name Bradley Real Estate Trust, Bradley was reorganized as a Maryland
corporation in October 1994. Bradley focuses on the ownership and operation of
community shopping centers, primarily in the Midwestern and the Northeastern
regions of the United States. Bradley's objective is to enhance the operating
performance and value of its portfolio through renovation, expansion and
leasing strategies designed to meet the needs of an evolving retail
marketplace. Bradley also seeks to create value through the acquisition of
properties which can benefit from Bradley's expertise in shopping center
management, renovation and expansion. Bradley currently owns fifteen shopping
centers, one retail/office building and the land under a retail/office tower.
In total, Bradley's existing properties encompass approximately 3.1 million
rentable square feet (of which approximately 3.0 million square feet is
rentable retail space), leased to over 300 tenants. Bradley's existing
portfolio was 94% leased as of September 30, 1995.
Bradley is the borrower under the Bradley Line of Credit, a $65,000,000
revolving credit agreement with three lenders, which is secured by a blanket
mortgage on six of Bradley's properties. The current interest rates available
to Bradley under the Bradley Line of Credit are (i) the higher of (x) the rate
announced by the lead lender as its "base rate" or (y) one half of one percent
(.5%) above the overnight federal funds effective rate published by the Board
of Governors of the Federal Reserve System and (ii) the adjusted LIBOR rate
(as defined
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therein) plus one and seven-eighths percent (1.875%). The Bradley Line of
Credit has a maturity date of December 31, 1996. The Bradley Line of Credit
contains certain covenants which Bradley believes are customary for agreements
of this type. Among other provisions, the covenants require the lenders'
consent to the incurrence of additional indebtedness, the signing of certain
leases, the sale and purchase of assets, and the maintenance of certain
financial standards including minimum net worth and debt service coverage
requirements. Consent of the lenders to the Merger will be required if a new
facility is not in place at or prior to the Effective Time.
TUCKER
Tucker believes that it is a leader in the Midwest in the development,
acquisition and long-term ownership of community shopping centers.
Headquartered in Northbrook, Illinois, Tucker owns and manages more than 4.3
million square feet of income-producing properties. The properties are located
primarily in Chicago and other areas of the Midwest, with tenants primarily
selling value-oriented merchandise.
Tucker is a Maryland corporation, formed on May 28, 1993, which elected to
qualify as a REIT under the Code following the public offering of Tucker
Common Stock in October 1993. Tucker is a fully integrated real estate
management and development company and was established to continue the
business of the Predecessor Business as an owner, manager and developer of
shopping centers. TTC was founded in 1976 by Kenneth L. Tucker. Prior to their
acquisition by Tucker, nine of the properties owned or controlled by Tucker
were owned by entities in which principals of TTC had substantial interests.
All of Tucker's real estate properties are held by, and all of its
operations are conducted through, TOP and its subsidiaries. TOP was formed for
the purpose of acquiring, operating and expanding the business of Tucker and
certain of its affiliates. Tucker is the sole general partner of TOP and owns
95.9% of the outstanding TOP Units. The limited partners of TOP, including the
Management Directors, were equity holders of the entities which previously
owned the properties transferred to TOP in connection with Tucker's initial
public offering in October 1993. The TOP Units are exchangeable, subject to
certain limitations imposed to protect Tucker's status as a REIT, into shares
of Tucker Common Stock on the basis of one TOP Unit for one share of Tucker
Common Stock.
TFP, which owns six of the Tucker properties, was created to facilitate the
refinancing of indebtedness encumbering certain of the Tucker properties
through a loan to TFP from a trust qualifying as a REMIC for federal income
tax purposes. TOP is the 99% general partner of TFP, and TFC, a wholly-owned
subsidiary of Tucker, is the 1% general partner of TFP. Upon completion of
Tucker's initial public offering, TFP issued mortgage notes in an aggregate
principal amount of $100,000,000 (the "Original Mortgage Notes") to finance
these six properties. Net proceeds to Tucker from this issuance were
approximately $97,400,000. In June 1994, TFP exchanged the Original Mortgage
Notes for the Tucker REMIC Note which was issued pursuant to the Tucker REMIC
Indenture. At the same time, Kidder, Peabody Acceptance Corporation I sold six
classes of pass-through certificates evidencing the entire beneficial
ownership of interest of the Tucker REMIC, a trust consisting solely of the
Tucker REMIC Note and related instruments evidencing the Tucker REMIC's
security interest in the related collateral. The Tucker REMIC Note matures in
one balloon payment in September 2000 and bears interest at a fixed-rate of
7.3% per annum, with monthly interest-only payments required. The Tucker REMIC
Note is recourse only to the assets of TFP and is collateralized by first
mortgage liens on each of the properties owned by TFP (Commons of Crystal
Lake, Heritage Square, Sheridan Village, Speedway SuperCenter, Washington
Lawndale Commons and One North State) and by an assignment of all of the TFP's
interest in the rents and the leases at each of these properties.
SURVIVING COMPANY
Pursuant to the Merger Agreement, at the Effective Time, Tucker will merge
with and into Bradley and the separate corporate existence of Tucker will
cease. Bradley will be the Surviving Company and the former Tucker
stockholders will become Bradley stockholders with all of the rights and
privileges attendant thereto. As a result of the Merger, Bradley will succeed
to Tucker's partnership interest in TOP and its equity interest in TFC.
Immediately following the Merger, the following subsidiaries or affiliates of
Tucker will remain in existence and will become subsidiaries or affiliates of
Bradley, as applicable: TOP, TFC (or its successor), TFP, TMC, Tucker
Management Limited Partnership and Williamson Square Associates Limited
Partnership.
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The corporate structure of the Surviving Company immediately following the
Merger is expected to be as follows:
(CHART SHOWING CORPORATE STRUCTURE OF SURVIVING COMPANY)
- ---------------
(1) Bradley will own the following properties directly: Rivercrest Center,
Westview Center, Crossroads Center, Har Mar Mall, Sun Ray Shopping Center,
Richfield Hub Shopping Center, Hub West Shopping Center, White Bear Hills,
Terrace Mall, Burning Tree Plaza, Westwind Plaza, Grandview Plaza, Hood
Commons, Augusta Plaza, St. Francis Plaza, and 585 Boylston Street. In
addition, Bradley will hold the ground lease for 501-529 Nicollet Avenue.
Bradley has two additional subsidiaries, Bradley Real Estate Management,
Inc. and Bradley Midwest Management Inc.
(2) In connection with the Merger, TOP will amend the TOP Partnership
Agreement, among other things, to change its name to Bradley Operating
Limited Partnership. Bradley will own 95.9% of the outstanding partnership
units of Bradley Operating Limited Partnership. Bradley Operating Limited
Partnership will own the following seven properties: Commons of Chicago
Ridge, StonyBrook Shopping Center, Meadows Town Mall, Village Shopping
Center, High Point Centre, Mequon Pavilions and Rollins Crossing. In
addition, Bradley Operating Limited Partnership will be the sole general
partner of, and hold a 60% interest in, Williamson Square Associates
Limited Partnership, which owns Williamson Square Shopping Center.
(3) In connection with the Merger, TFC will transfer all of its assets to a
new corporation with the name Bradley Financing Corp. which will be 100%
owned by Bradley, or alternatively Bradley will acquire 100% of the stock
of TFC, which will change its name to Bradley Financing Corp.
(4) TFP will change its name to Bradley Financing Partnership and its
partnership units will be owned by Bradley Operating Limited Partnership
(99%) and Bradley Financing Corp. (1%). Bradley Financing Partnership will
own the following six properties: Commons of Crystal Lake, Heritage
Square, Sheridan Village, Speedway SuperCenter, Washington Lawndale
Commons and One North State.
(5) Tucker Management Corp. will change its name to Bradley Management Corp.,
and 92% of its voting common stock and 5% of its nonvoting preferred stock
will be held by two individuals who are officers of Bradley while the
remaining 8% of its voting common stock and 95% of its nonvoting preferred
stock will be held by Bradley Operating Limited Partnership. The nonvoting
preferred stock is entitled to dividends of 99% of Bradley Management
Corp.'s cash flow.
(6) Tucker Management Limited Partnership will change its name to Bradley
Management Limited Partnership, and its sole general partner, Bradley
Management Corp., will hold 60% of its partnership units while its sole
limited partner, Bradley Operating Limited Partnership, will hold 40% of
its partnership units.
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Following the consummation of the Merger, Bradley and Tucker believe that
the Surviving Company will be one of the largest owners and operators of
community shopping centers in the Midwestern region of the United States. The
Surviving Company will own 31 community shopping centers encompassing
approximately 7.3 million square feet of rentable retail space in eleven
states. Set forth below is a property chart which contains certain information
concerning the shopping centers to be owned by the Surviving Company following
the consummation of the Merger. Properties indicated by an asterisk (*) are
currently owned by the Tucker entity identified in the applicable footnote.
<TABLE>
<CAPTION>
YEAR RENTABLE PERCENT LEASED AT SQUARE BASE LEASE/OPTION
SHOPPING CENTERS ACQUIRED SQUARE FEET SEPT. 30, 1995 MAJOR TENANTS(1) FEET EXPIRATION DATE
---------------- -------- ----------- ----------------- ---------------- ------- -----------------
<S> <C> <C> <C> <C> <C> <C>
ILLINOIS
Rivercrest Center....... 1994 429,000 100% OMNI Foods 87,937 2011/2031
Crestwood, Illinois Venture 79,903 2012/2032
Sears Roebuck and Co. 55,000 2001/2011
T.J. Maxx 34,425 2004/2019
PETsMART 31,639 2009/2030
Best Buy 25,000 2008/2023
OfficeMax 24,000 2007/2017
Hollywood Park 15,000 2000/2005
Westview Center......... 1993 326,000 78% Cub Foods 67,163 2009/2029
Hanover Park, Illinois Marshalls 34,302 2004/2019
Crossroads Center....... 1992 242,000 94% K-Mart (ground lease) 96,268 2001/2020
Fairview Heights, Illi-
nois T.J. Maxx 25,200 1998/2013
*Commons of Chicago
Ridge(3)............... 1988(2) 286,000 79% T.J. Maxx 25,082 1998/2008
Chicago Ridge, Illinois Marshalls 27,000 1999/2014
Office Depot 27,680 2002/2012
Cineplex Odeon 25,000 2008/2018
Michaels Stores 17,550 1999/2004
*Chicago Ridge An-
nex(3)................. 1995 41,854 53% Pep Boys 22,354 2015/2035
Chicago Ridge, Illinois
*Commons of Crystal
Lake(4)................ 1993(2) 269,000 98% Jewel/Osco 59,804 2007/2042
Crystal Lake, Illinois Handy Andy 68,800 2018
Venture 81,338 2006
(not owned)
*Heritage Square(4)..... 1992(2) 212,000 100% Montgomery Ward 111,016 2013/2033
Naperville, Illinois Circuit City 28,351 2009/2024
Stroud's 26,703 2003/2013
*Meadows Town Mall(3)... 1988(2) 382,000 83% T.J. Maxx 24,000 1999/2009
Rolling Meadows, Illi-
nois Waccamaw 108,000 1999/2009
Elek-Tek 32,000 2001/2011
Women's Club 20,478 1998/2008
*Sheridan Village(4).... 1990(2) 301,000 96% Bergner's Dept. Store 162,852 2006/2021
Peoria, Illinois Cohen Furniture 16,600 2007
*High Point Centre(3)... 1993(2) 240,000 93% Cub Foods 62,000 2008/2033
Lombard, Illinois T.J. Maxx 25,200 1998/2013
Office Depot 36,416 2003/2013
Macfrugal's 17,040 2006/2016
*Rollins Crossing(3).... 1995 62,000 100% Sears Hardware 21,083 2005/2020
Round Lake Beach,
Illinois Super K-Mart 190,000 2033
(not owned)
MINNESOTA
Har Mar Mall............ 1992 397,000 91% HomePlace 54,500 2011/2026
Roseville, Minnesota Barnes & Noble 44,856 2010/2025
Marshalls 34,858 1998/2013
T.J. Maxx 25,025 1998/2008
General Cinema 22,252 2001/2021
General Cinema 19,950 2000/2010
Michaels Stores 17,907 2003/2018
</TABLE>
32
<PAGE>
<TABLE>
<CAPTION>
YEAR RENTABLE PERCENT LEASED AT SQUARE BASE LEASE/OPTION
SHOPPING CENTERS ACQUIRED SQUARE FEET SEPT. 30, 1995 MAJOR TENANTS(1) FEET EXPIRATION DATE
---------------- -------- ----------- ----------------- ---------------- ------- -----------------
<S> <C> <C> <C> <C> <C> <C>
Sun Ray Shopping Cen-
ter.................... 1961 254,000 94% J.C. Penney 40,451 1999/2009
St. Paul, Minnesota Marshalls 26,256 2005/2020
T.J. Maxx 23,955 2000/2005
Kowalski's 23,218 2000/2010
Michaels Stores 18,127 2004/2019
Richfield Hub Shopping
Center................. 1988 138,000 97% Marshalls 26,785 2003/2008
Richfield, Minnesota Michaels Stores 24,235 1999/2014
Hub West Shopping Cen-
ter.................... 1991 77,000 100% Rainbow Foods 50,817 2012/2017
Richfield, Minnesota U.S. Swim & Fitness 26,185 2001/2003
White Bear Hills........ 1993 67,000 100% Gateway Foods 45,679 2011/2021
White Bear Lake, Minne-
sota
Terrace Mall............ 1993 140,000 92% Rainbow Foods 59,232 2013/2033
Robbinsdale, Minnesota North Memorial 32,000 1999/2004
Burning Tree Plaza...... 1993 110,000 97% T.J. Maxx 30,000 2004/2019
Duluth, Minnesota Best Buy 28,000 1999/2014
Northwest Fabrics 17,682 1999/2004
Westwind Plaza.......... 1994 88,000 95% Northern Hydraulics 18,165 2002/2012
Minnetonka, Minnesota
INDIANA
*Speedway
SuperCenter(4)......... 1993(2) 530,000 95% Kohl's 75,000 1999/2019
Speedway, Indiana Kroger 59,515 2013/2043
Sears Roebuck and Co. 30,825 2004/2024
Old Navy 15,000 2005/2010
Kittles 25,320 2000/2010
PETsMART 21,781 2002/2012
Factory Card Outlet 16,675 2003/2013
Lindo Super Spa 16,859 2000/2010
*The Village(3)......... 1993(2) 355,000 97% J.C. Penney 60,600 1999/2004
Gary, Indiana Goldblatt's 55,000 2000/2005
McCrory's 24,500 1998/2003
Jacobsens 22,896 1996
Post-Tribune
Publishing 19,246 1996
Indiana Employment 18,050 1996/2000
*Washington Lawndale
Commons(4)............. 1992(2) 333,000 99% Target 83,110 2005/2025
Evansville, Indiana Sears Homelife 34,527 2003/2018
Allied Sporting Goods 20,285 1997/2012
Kuester's 40,857 1996
Jo-Ann Fabrics 15,262 2003/2013
Books-A-Million 20,515 2002/2008
TENNESSEE
*Williamson Square(5)... 1993(2) 335,000 95% Wal-Mart 117,493 2008/2038
Franklin, Tennessee Kroger 63,986 2008/2038
Carmike Cinemas 29,000 2008/2018
WISCONSIN
*Mequon Pavilions(3).... 1994 212,000 96% Kohl's Food Emporium 45,697 2010/2050
Furniture Clearance 19,900 1997
KENTUCKY
*StonyBrook(3).......... 1991(2) 136,000 97% Kroger 79,625 2021/2046
MISSOURI
Grandview Plaza......... 1971 314,000 98% Home Quarters 84,611 2013/2033
Florissant, Missouri Schnucks 68,025 2011/2026
Walgreens 15,984 2043
J.C. Penney 63,892 1996
</TABLE>
33
<PAGE>
<TABLE>
<CAPTION>
YEAR RENTABLE PERCENT LEASED AT SQUARE BASE LEASE/OPTION
SHOPPING CENTERS ACQUIRED SQUARE FEET SEPT. 30, 1995 MAJOR TENANTS(1) FEET EXPIRATION DATE
---------------- -------- ----------- ----------------- ---------------- ------- -----------------
<S> <C> <C> <C> <C> <C> <C>
NEW HAMPSHIRE
Hood Commons............ 1973 216,000 97% Shaw's 58,258 2013/2033
Derry, New Hampshire Ames 50,000 2000/2005
Decelle 26,653 1999/2014
MAINE
Augusta Plaza........... 1971 152,000 89% K-Mart 85,808 1997/2012
Augusta, Maine
NEW MEXICO
St. Francis Plaza....... 1995 30,000 100% Walgreens 14,950 2043
Santa Fe, New Mexico Wild Oats 14,850 2006/2066
RETAIL/OFFICE BUILDINGS
*One North State(4)..... 1990(2) 640,000 95% First Chicago 296,782 2003
Chicago, Illinois Arthur Andersen 126,533 2003/2013(6)
T.J. Maxx 77,675 2001/2011
Filene's Basement 50,000 2002/2012
Int'l. Academy of Design 27,270 2003/2008
and Merchandising
585 Boylston Street..... 1961 22,000 98% CVS Pharmacy 7,582 2001/2016
Boston, Massachusetts Various Office Tenants 13,589 Varies
GROUND LEASE
501-529 Nicollet Ave-
nue.................... 1969 51,000 100% Brookfield 51,000 2086
Minneapolis, Minnesota
</TABLE>
- --------
(1) Major tenants are defined as tenants occupying 15,000 square feet or more
of the rentable square footage with the exception of 585 Boylston Street
and St. Francis Plaza. In some cases, the named tenant occupies the
premises as a sublessee. Bradley views "anchor" tenants as a subset of the
major tenants at each property, generally consisting of those tenants
which also represent more than 15% of the property's rentable square
footage.
(2) The property was previously acquired by the Predecessor Business in the
year indicated and was acquired by Tucker in connection with its initial
public offering in 1993.
(3) Currently owned by TOP. The amount of rentable square feet at Rollins
Crossing does not include approximately 190,000 square feet which is owned
by K-Mart Corp.
(4) Currently owned by TFP. The amount of rentable square feet at Commons of
Crystal Lake does not include approximately 81,000 square feet which is
owned by Metropolitan Life and leased to an anchor tenant.
(5) Currently owned by Williamson Square Associates Limited Partnership, of
which TOP is the 60% general partner.
(6) This tenant has the option exercisable on or before April 1, 1996 to
terminate its lease, effective as of April 1, 1998, upon payment of a $1.8
million cancellation fee. This tenant has indicated that it will move out
of its space prior to the expiration of its lease, but has not yet
determined whether or not it will exercise its early termination right.
See "Risk Factors--Real Estate Investment Considerations."
Bradley has entered into a nonbinding letter of intent with Brookfield
Development, Inc., the current groundlessee, regarding the proposed sale by
Bradley of its interest in 501-529 Nicollet Avenue, Minneapolis, Minnesota.
The sale price, subject to standard closing adjustments, is $12,900,000. If
consummated, the sale would result in a gain to Bradley of approximately
$9,182,000 for financial reporting purposes and $10,800,000 for federal income
tax purposes. For federal income tax purposes, however, Bradley intends to
structure the transaction in part as a tax deferred "like-kind" exchange under
the Code. In that regard, Bradley intends to identify Brookdale Square
Shopping Center, a 185,000 square foot community shopping center located in
Brooklyn Center, Minnesota ("Brookdale"), as the replacement property in the
exchange. The purchase price for Brookdale, subject to standard closing
adjustments, is $8,750,000. Brookdale is currently owned by a major insurance
company whose asset disposition team has agreed upon the business terms which
it will recommend
34
<PAGE>
to its corporate office. To the extent that the sales proceeds from 501-529
Nicollet Avenue exceed the purchase price of Brookdale, Bradley intends to
apply such excess to reduce the Bradley Line of Credit. Closings of the sale
of 501-529 Nicollet Avenue and the acquisition of Brookdale will be subject to
various third party consents and other conditions beyond Bradley's control;
and no assurance can be given that the transactions will be completed or that
if 501-529 Nicollet Avenue is sold that Bradley will be able to identify and
acquire replacement property that would result in deferral of the taxable gain
on the sale of 501-529 Nicollet Avenue. Brookdale is currently approximately
85% leased, and its major tenants include Circuit City, Office Depot, Drug
Emporium, United Artists and Brookdale Cinema. Bradley intends to distribute
to its stockholders the amount of any taxable gain recognized from such
disposition to the extent not offset with deductions from other sources.
The current executive officers and directors of Bradley will manage the
business and affairs of the Surviving Company following the consummation of
the Merger. For information concerning these persons, see "Management of the
Surviving Company." Following the Merger, the Surviving Company will employ
most of Tucker's property management personnel. Given the strength of Tucker's
property-level operational personnel and systems, Bradley's management
believes the Merger will broaden its existing property management capabilities
and allow the Surviving Company to internalize its property management and
leasing functions.
Bradley is currently in discussions with the lead lender under the Bradley
Line of Credit regarding replacing this facility with a $150 million unsecured
revolving credit facility. Bradley anticipates that the new credit facility
will be available for the acquisition, development, renovation and expansion
of new and existing properties (including, but not limited to, capital
improvements, tenant improvements, and leasing commissions), and other working
capital purposes. It is anticipated that the interest rates available under
the new credit facility will be more favorable than those currently available
under the Bradley Line of Credit and may become even more favorable in the
event the Surviving Company (x) meets certain loan to value tests or (y)
receives an investment grade unsecured debt rating. Bradley anticipates that
the new credit facility will contain financial and other covenants which are
consistent with similar unsecured lines of credit for comparable publicly-
traded REITs. Bradley believes that the increased size, lower interest rate
and unsecured nature of the new credit facility will increase the Surviving
Company's financial flexibility and prospects for obtaining an investment
grade debt rating. It is currently contemplated that the new credit facility
will become effective simultaneously with the closing of the Merger. While
discussions regarding a new credit facility are ongoing, there can be no
assurance that such a credit facility will be obtained, or if obtained, when
it will become effective or become available. If this new credit facility
cannot be obtained, consent to the Merger would be required from the existing
revolving credit lenders to Bradley and Tucker. See "The Merger Agreement--
Conditions to the Merger." For a discussion of the current Bradley Line of
Credit, see "--Bradley."
ONE NORTH STATE
One North State is a mixed-use property located in the "Loop" area of
downtown Chicago, Illinois. The property aggregates 639,164 square feet of
gross leasing area ("GLA"), including approximately 159,000 square feet of
retail space. The retail portion of the property is currently 99% leased and
is anchored by T.J. Maxx and Filene's Basement. The office portion of this
property is currently 94% leased primarily to First Chicago Corp. and Arthur
Andersen & Co. First Chicago Corp. and Arthur Andersen & Co. both lease more
than 10% of the building's square footage. The lease with First Chicago Corp.
requires First Chicago Corp. to pay base rent equal to $13.25 per square foot
per annum until November 1998 and $15.75 per square foot per annum from
December 1998 through November 2003. The lease does not contain renewal
options. The lease with Arthur Andersen & Co. expires March 31, 2003 and
requires Arthur Andersen & Co. to pay base rent equal to $12.00 per square
foot per annum through March 31, 1998 and $13.00 per square foot per annum
from April 1, 1998 through March 31, 2003. The lease does not contain renewal
options and Arthur Andersen & Co. has the right to cancel its lease as of
April 1, 1998, provided that it gives Tucker notice by April 1, 1996 and pays
Tucker a $1.8 million cancellation fee. This tenant has indicated that it will
move out of this space prior to the expiration of its lease, but has not yet
determined whether or not it will exercise its early termination right. See
"Risk Factors--Real Estate Investment Considerations." The table below sets
forth certain information with respect to the occupancy rate expressed as a
percent of total GLA for each of the last five years and the average annual
base rent per square foot for each of the last five years.
35
<PAGE>
<TABLE>
<CAPTION>
AVERAGE
EFFECTIVE
YEAR ENDING OCCUPANCY ANNUAL RENT
DECEMBER 31, RATE PER SQ. FT.
------------ --------- -----------
<S> <C> <C>
1995................................................. 95.32% $15.80
1994................................................. 95.20 15.98
1993................................................. 91.90 14.69
1992................................................. 89.42 14.12
1991................................................. 83.59 13.20
</TABLE>
At December 31, 1995, One North State had a total of 19 tenants. The
following table sets forth certain information with respect to the expiration
of leases at this mixed-use property.
<TABLE>
<CAPTION>
AVERAGE PERCENT OF PERCENT OF
BASE RENT TOTAL ANNUAL
GLA OF ANNUALIZED PER SQ. FT. BUILDING GLA BASE RENT
NUMBER OF EXPIRING BASE RENT TOTAL UNDER REPRESENTED REPRESENTED
YEAR ENDING LEASES LEASES OF EXPIRING ANNUAL BASE EXPIRING BY EXPIRING BY EXPIRING
DECEMBER 31, EXPIRING (SQ. FT.) LEASES RENT LEASES LEASES LEASES
------------ --------- --------- ----------- ----------- ----------- ------------ -----------
<S> <C> <C> <C> <C> <C> <C> <C>
1995.................... 1 6,200 $ 45.00 0.97%
1996.................... 2 2,477 72.38 0.39
1997.................... 0 0 0.00 0.00
1998.................... 1 126,533 12.00 19.78
1999.................... 0 0 0.00 0.00
2000.................... 1 1,807 101.00 0.28
2001.................... 5 89,279 22.68 13.96
2002.................... 2 51,451 21.41 8.04
2003.................... 4 327,702 13.09 51.22
2004.................... 0 0 0.00 0.00
2005.................... 2 2,035 77.89 0.32
</TABLE>
For federal income tax purposes, TFP's basis in One North State was
approximately $73.6 million as of December 31, 1995. Property taxes paid in
1995 for the tax year ended 1994 (the most recent tax year for which
information is available) aggregated $3,424,957.
One North State was originally constructed in 1904. In connection with the
construction, the City of Chicago (the "City") granted the original developer
permission and authority to construct the center portion of the building over
a portion of a public alley commonly known as Holden Court, to use and occupy
certain subsurface vaults and a subway connection and to construct and
maintain a loading dock encroaching onto a portion of Holden Court (together,
except for the subsurface vaults and the subway connection, the "Permitted
Improvement Property"). Tucker has commenced procedures to acquire fee
ownership of the air rights over Holden Court for approximately $550,000, with
funds from a special interest-bearing escrow account set up in connection with
Tucker's initial public offering (the "Holden Court Escrow"). The amount in
the Holden Court Escrow is currently approximately $845,000. Payment for the
acquisition of the Permitted Improvement Property is guaranteed by certain
shares of Tucker Common Stock and TOP Units owned by the Management Directors
(aggregating 102,308 shares and 427,339 units, respectively). If the Permitted
Improvement Property is acquired prior to October 1, 2004, the balance will be
distributed to the Management Directors in the form of cash or TOP Units
valued at the initial public offering price. If the Permitted Improvement
Property is not acquired by October 1, 2004, the balance will be distributed
equally to TFP, on the one hand, and the Management Directors, on the other
hand. Tucker also has commenced negotiations with the City to increase the
term of the existing, five-year permit as it relates to the subsurface vaults
and the subway connection. If not extended, the permit will be subject to
renewal in September 1997.
36
<PAGE>
THE MERGER
TERMS OF THE MERGER
The Boards of Directors of each of Bradley and Tucker have approved the
Merger and the Merger Agreement, a copy of which is attached hereto as Annex
A, pursuant to which, upon fulfillment (or waiver) of the conditions set forth
therein, (i) Tucker will be merged with and into Bradley, with Bradley being
the Surviving Company in the Merger, and (ii) each issued and outstanding
share of Tucker Common Stock will be converted into the right to receive a
percentage of a share of Bradley Common Stock to be determined as follows. If
the Closing Price of Bradley Common Stock is $16.00 or more, each share of
Tucker Common Stock will be exchanged for .665 of a share of Bradley Common
Stock. If the Closing Price is between $15.50 and $16.00, the Exchange Ratio
will be determined by dividing $10.64 by the Closing Price. If the Closing
Price is $15.50 or less, the Exchange Ratio will be .686 of a share of Bradley
Common Stock. The Closing Price for Bradley Common Stock for the 20 trading
days ended January , 1996 was $ .
As a result of the Merger and without any action on the part of the holder
thereof, at the Effective Time, all shares of Tucker Common Stock will cease
to be outstanding, will be canceled and retired and will cease to exist. Each
holder of a Certificate will thereafter cease to have any rights with respect
to such shares of Tucker Common Stock, except the right to receive shares of
Bradley Common Stock and cash in lieu of fractional shares of Bradley Common
Stock upon the surrender of such Certificate. Promptly after the Effective
Time, the Exchange Agent will mail a letter of transmittal and instructions to
each holder of a Certificate as of the Effective Time for use in effecting the
surrender of the Certificate in exchange for certificates representing shares
of Bradley Common Stock and cash in lieu of fractional shares. See "The Merger
Agreement--Exchange of Tucker Stock Certificates."
BACKGROUND OF THE MERGER
In early October 1994, Kenneth L. Tucker, President of Tucker, contacted E.
Lawrence Miller, President of Bradley, concerning a possible business
combination between the two companies. Preliminary discussions concerning a
possible merger continued between the members of senior management of both
companies during October and November 1994. On November 16, 1994, the parties
executed a mutual confidentiality agreement which provided that each party
would not disclose and would keep confidential all non-public due diligence
materials provided to it by the other party. In early December 1994,
discussions between the parties terminated before they reached a substantive
stage and before the exchange of any non-public due diligence materials.
On December 15, 1994, the Tucker Board of Directors announced a reduction in
its quarterly dividend payment from $.38 to $.36 per share. This dividend
reduction was the result of several factors, including higher interest rates,
higher than anticipated general and administrative expenses and lower than
anticipated fee income from third-party property management and leasing.
In December 1994, following the reduction of the quarterly dividend and the
termination of its negotiations with Bradley, Tucker entered into discussions
on an exclusive basis with another public company concerning a possible
business combination. On January 31, 1995, the Tucker Board authorized the
engagement of, and on February 17, 1995, Tucker formally engaged, PaineWebber
to provide investment banking advice in connection with a possible business
combination involving this company or any other publicly-traded real estate
company. In addition, on January 31, 1995, the Tucker Board also authorized
the engagement of Richard S. Ellwood & Co. as a consultant to advise Tucker
during its investigation and consideration of strategic alternatives. In late
March 1995, the negotiations with this public company terminated.
On March 1, 1995, Tucker announced that its FFO for the quarter ended
December 31, 1994 was $.35 per share (compared to $.44 per share for the
previous quarter) and that it had failed to meet its overall FFO goals for
fiscal 1994. Due to the announced reduction in FFO, Tucker's high leverage and
the decrease in Tucker's stock price over the previous several months,
Tucker's ability to raise capital in the public markets on acceptable terms
was limited.
37
<PAGE>
Following this announcement and the termination of discussions with the
other public company in late March, the Board of Directors of Tucker directed
its management, with the assistance of PaineWebber, to prepare a Confidential
Information Memorandum for distribution to a select group of publicly-traded
REITs, including Bradley. In connection with this distribution, these
companies were asked to submit indications of interest concerning a possible
business combination with Tucker by May 26, 1995. During this period, Tucker
also engaged Kemper Securities, Inc. to explore a possible business
combination with a privately-held real estate company.
On May 26, 1995, Bradley indicated its interest in pursuing a transaction in
which each outstanding share of Tucker Common Stock would be exchanged for
.828 of a share of Bradley Common Stock (with increases or decreases in the
exchange ratio to assure that Tucker's stockholders would receive Bradley
Common Stock having a market value not less than $12.25 and not greater than
$13.25), subject to Bradley's due diligence and to certain other conditions.
Tucker also received indications of interest at lower indicated values from
two other publicly-traded REITs. Based on this review, the Tucker Board
concluded that Bradley's indication of interest was the most favorable and
authorized negotiations with Bradley in an effort to increase Bradley's
indicated price and to remove the conditions to Bradley's indication of
interest. Bradley refused to increase its indicated price or to remove any
condition, and the negotiations between Bradley and Tucker terminated on June
8, 1995.
On June 15, 1995, Tucker publicly announced that it was reducing its
quarterly dividend from $.36 to $.25 per share, and that it had hired
PaineWebber to help it explore strategic alternatives to maximize stockholder
value. On the date of the announcement, Tucker's stock price decreased by
$2.12 per share. As a result of this announcement, several companies expressed
interest in a transaction with Tucker. As part of its solicitation process,
Tucker delivered the Confidential Information Memorandum (and other due
diligence materials) to certain of these parties. Tucker requested that these
parties, along with Bradley and the private real estate company with whom
Kemper Securities, Inc. was exploring a possible business combination, submit
indications of interest by July 14, 1995. The Tucker Board understood that the
selected bidder or bidders would perform additional due diligence before
signing a definitive merger agreement.
Five indications of interest were received on or prior to July 14, 1995,
including one indication of interest from a public REIT which had not
previously received Tucker's Confidential Information Memorandum. These
indications of interest consisted of two proposals by private real estate
companies for cash acquisitions of Tucker and two proposals from public REITs
(including Bradley) for stock-for-stock acquisitions of Tucker, and one
additional proposal from a public REIT (the "Alternative REIT Acquiror"),
which proposed consideration in cash or stock, at Tucker's option. All of the
proposals were conditioned on the acquiring party having the right to conduct
extensive additional due diligence and to negotiate exclusively with Tucker
for at least 30 days. The two cash proposals from private real estate
companies were conditioned on the bidders obtaining financing for the
acquisition.
In its bid, Bradley proposed a transaction in which each outstanding share
of Tucker Common Stock would be converted into the right to receive between
.79 and .83 of a share of Bradley Common Stock depending on the trading price
of Bradley Common Stock during the ten trading days preceding the closing of
this transaction. Such a transaction would have had a market value of
approximately $12.65 per share of Tucker Common Stock, based on the closing
price of $16.00 per share of Bradley Common Stock on July 14, 1995. The market
value of the transaction could have increased to $13.00 per share with
increases in the market value of Bradley Common Stock. As a condition to
proceeding with a potential transaction, Bradley insisted that Tucker sign an
agreement which (a) generally would restrict Tucker from conducting
discussions or negotiations with any other party for 30 days; and (b) would
require Tucker to reimburse Bradley for its out-of-pocket expenses (up to a
maximum of $325,000) in the event that (i) Tucker wished to pursue an
acquisition proposal with another party, or (ii) Bradley decided not to enter
into a definitive merger agreement because, in the course of its due
diligence, Bradley discovered that the Confidential Information Memorandum
contained false or misleading information or that the operations of Tucker
deviated materially from the information presented in the Confidential
Information Memorandum. Bradley's indication of interest also provided that it
would expire on July 21, 1995.
38
<PAGE>
On July 17 and 18, 1995, the Tucker Board met to review the indications of
interest. The high end of the range of values of all but one of the other
offers received by Tucker offered greater consideration to Tucker's
stockholders than the Bradley offer. The two cash bids from the privately-held
real estate companies, on their face, purported to offer the highest potential
acquisition prices. Both such cash bids, however, were subject to financing
conditions. The Board sought information on the firmness of these parties'
financing arrangements and the likelihood that they ultimately would be able
to finance a transaction with Tucker. The Board rejected one cash offer, which
purported to have a value of $13.50 per share of Tucker Common Stock, after
management informed them that the bidder intended to finance the transaction
through a private placement of equity, that the success of such a private
placement could not be assured and, if successful, could not be completed for
approximately four months. PaineWebber expressed reservations, based on its
knowledge of the market for such securities, about the likelihood of success
of such a private placement. With regard to the remaining privately-held cash
bidder that indicated interest in a transaction for between $13.75 and $14.50
per share of Tucker Common Stock, management advised the Board that, to date,
this bidder did not have firm financing commitments and had not been able to
provide management or PaineWebber with any assurance as to when such
commitments could be obtained (if at all). After considering the foregoing,
the Board requested that management and PaineWebber attempt to have this
bidder accelerate its due diligence activities and provide additional
information to the Board by July 24, 1995 concerning its respective ability to
obtain financing.
In its consideration of the three acquisition proposals from publicly-traded
REITs, the Tucker Board noted that one party had submitted its proposal for a
stock-for-stock transaction with an indicated market value of between $12.50
and $13.375 per share without reviewing any of Tucker's confidential material,
and thus its bid was likely to be reduced during the due diligence process.
PaineWebber informed the Board that while this company primarily owned retail
properties, a significant portion of such properties were not shopping
centers. PaineWebber also informed the Board that this company was highly
leveraged, its stock traded at a relatively low multiple and thus it had a
high implicit cost of funds. Because this company was proposing a stock-for-
stock merger, the Tucker Board realized that the combined company would also
be highly leveraged and would thus potentially face many of the same issues as
Tucker did with respect to accessing the capital markets. Therefore, the stock
of the combined company following the merger was likely not to be viewed as
favorably as Bradley's stock by Tucker's stockholders. Thus, after
consultation with PaineWebber, the Board concluded that it was unlikely that
this company would ultimately enter into an acquisition agreement which was in
the best interests of Tucker's stockholders. The Tucker Board noted that,
while the upper range of the bid submitted by the Alternative REIT Acquiror
was approximately equal in market value to Bradley's bid, the range presented
by the Alternative REIT Acquiror (between $11.00 and $13.00 per share of
Tucker Common Stock) was substantial. The Alternative REIT Acquiror indicated
that it would value the transaction strictly as an asset purchase (i.e.,
without premium to stockholders resulting from any "franchise value") and that
it would take approximately three weeks to make a more definitive offer. Thus,
the Board concluded that the Alternative REIT Acquiror was likely to reduce
its bid during the due diligence process.
In considering Bradley's indication of interest at its July 17th and 18th
meetings, the Board noted that Bradley had recently completed a public
offering of its common stock and had a debt to Total Market Capitalization
ratio of approximately 16%. PaineWebber informed the Board that Bradley has a
quality institutional investor base and relatively high FFO multiple compared
to other retail REITs of Bradley's size. The Board also noted that the two
companies are of similar size and have similar properties located primarily in
the Midwest. The Board also believed that, given the similarities between the
two companies, the Merger would provide the Surviving Company with substantial
potential savings in general and administrative expenses and opportunities for
synergies through the potential enhancement of its property level operational
systems. Thus, the Board believed that a stock-for-stock transaction with
Bradley would be a strategic combination rather than a mere sale of Tucker and
thus provided greater potential value for Tucker's stockholders.
In its deliberations, the Board considered the possibility of giving all of
the parties additional time to complete their due diligence and to allow them
to submit firm bids which were not subject to either financing or due
diligence conditions. The Board believed that Bradley would continue to
participate in the bidding process
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for an additional week or so while the Board was evaluating and negotiating
these bids. However, the Board believed that it was unlikely that Bradley
would participate in yet another bidding process for Tucker or devote any
further significant time, effort or expense to a transaction with Tucker
without an exclusivity agreement. Thus, the Board authorized PaineWebber and
management to continue discussions with Bradley concerning the terms of its
bid and to attempt to have the privately-held cash bidder and the Alternative
REIT Acquiror accelerate their respective due diligence activities and
solidify their financing arrangements.
The Tucker Board met by telephone on July 21, 1995 to receive an update on
the status of negotiations with the various parties. In this meeting,
management reported that the remaining privately-held cash bidder had
indicated to Tucker that it needed additional time to complete its due
diligence and based on issues raised in its evaluation to date, its
acquisition price would be at or below the low end of the range specified in
its original bid. Further, although this cash bidder indicated that it
believed its proposed financing sources ultimately would be willing to provide
debt and equity financing for the transaction, it appeared that no meaningful
progress had been made with respect to obtaining firm financing commitments.
PaineWebber reported to the Board that the Alternative REIT Acquiror had not
made a more definitive proposal. As a result of these discussions, Tucker's
Board approved further negotiations with Bradley concerning a business
combination on the terms of Bradley's indication of interest and authorized
the execution of an exclusivity agreement with Bradley for a period of
30 days. Tucker and Bradley executed this agreement on July 25, 1995 (the
"Exclusivity Agreement").
Following July 25, 1995, the senior management of Bradley conducted due
diligence concerning Tucker and its properties. As a result of such due
diligence, on August 7, 1995, Bradley informed Tucker that it would only
proceed with a transaction pursuant to which each share of Tucker Common Stock
would be exchanged for .717 of a share of Bradley Common Stock. Based on the
closing price for Bradley Common Stock on August 7, 1995 of $16.25 per share,
Bradley's proposal had decreased the market value of the transaction to
approximately $11.65 per share of Tucker Common Stock. Bradley also requested
an extension of the time period under the Exclusivity Agreement in order to
continue its due diligence. On August 9, 1995, the Tucker Board met to discuss
the revised Bradley offer. PaineWebber contacted two specific former bidders,
including the Alternative REIT Acquiror, and neither indicated any desire to
make a more favorable bid. The Board considered the proposal previously made
by the Alternative REIT Acquiror, but concluded that, given the opportunity to
conduct extensive additional due diligence (as Bradley had conducted), the
Alternative REIT Acquiror was likely to reduce its offer to a price no greater
(and potentially lower) than Bradley was currently proposing. Further, a
refusal to extend the Exclusivity Agreement would likely result in the
termination by Bradley of its discussions with Tucker. The Board concluded
that it would not be useful to approach any of the privately-held real estate
companies that previously had proposed cash acquisitions of Tucker because
they would still have to obtain financing for a transaction and their ability
to raise such financing was uncertain. The Board decided that, in the absence
of another offer which would result in a higher value for Tucker's
stockholders, Tucker would continue discussions with Bradley and agree to an
extension of the Exclusivity Agreement. On August 24, 1995, after negotiations
between the parties, Bradley and Tucker executed an amendment to the
Exclusivity Agreement which provided, among other things, that the parties
would continue good faith negotiations concerning a business combination on
the terms of the revised Bradley offer and extend the exclusive negotiation
period through September 30, 1995.
In its deliberations, the Tucker Board noted that the Management Directors
might have conflicts of interest in addressing potential employment or
severance arrangements. The Tucker Board also noted that the Management
Directors have substantial equity interests in Tucker and TOP. The Tucker
Board determined that any arrangements involving the Management Directors
which were not part of the consideration to all stockholders would require the
approval of the other Directors who did not have a financial interest in such
arrangements. The Board designated the non-management directors, Messrs. Hart,
Homer, Masotti and Smith, as the Tucker Special Committee to evaluate and
negotiate on behalf of Tucker any compensation, severance and other
arrangements or transactions involving the Management Directors. In September
1995, the Tucker Board approved the engagement by the Tucker Special Committee
of the law firm of Rudnick & Wolfe as independent counsel to the Tucker
Special Committee.
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On August 28, 1995, Kenneth Tucker delivered to PaineWebber for transmission
to the Tucker Special Committee a proposal regarding severance compensation
and the following other items in the event a change in control transaction
were to be consummated: (a) Mr. Tucker requested severance payments for
various employees to be paid at Closing, including severance payments for the
Management Directors of $675,000 (three times his annual compensation) for
Kenneth Tucker, $450,000 (two times his annual compensation) for Richard
Tucker and $200,000 (annual compensation) for Harold Eisenberg; (b) a
Consulting Agreement for Kenneth Tucker for between $225,000 and $375,000 per
year; (c) a purchase by the Company of artwork owned by Kenneth Tucker for
$100,000 pursuant to the terms of a pre-existing contract between Tucker and
Kenneth Tucker; (d) a continuation of the stock options held by certain
executives, including the Management Directors, with a reset of the exercise
price to permit the purchase of Bradley shares at a price of $22; (e) a
restructuring of the TOP Partnership Agreement to provide for a 5 to 7 year
period during which certain properties held by the TOP could not be sold; (f)
a release of the Management Directors' personal environmental guarantees with
respect to the Commons of Chicago Ridge property; (g) health insurance
coverage for Kenneth and Richard Tucker for one year at Tucker's expense and
thereafter at their own expense payable at the Surviving Company's direct
costs; (h) the purchase by Kenneth and Richard Tucker of the furniture and
artwork in their respective offices for an amount to be negotiated; (i)
payment by Tucker of the lease payments on Kenneth Tucker's company car
through April 1996; and (j) use by Kenneth and Richard Tucker of their offices
and secretaries for one year, with use of the office to be at Bradley's
discretion. In addition, because Bradley did not have significant development
expertise, Kenneth and Richard Tucker proposed that they be allowed to pursue
a development relationship with the Surviving Company subsequent to the Merger
with respect to certain properties for which Tucker had development rights.
On August 31, 1995, The Tucker Special Committee met to consider Kenneth
Tucker's proposal. At this meeting, the Tucker Special Committee met with
PaineWebber and counsel to discuss severance policies generally and the
severance arrangements that had been provided in other recent REIT mergers.
The Tucker Special Committee met on September 13, 1995 to begin preparation of
a response. In light of the Tucker's past performance, the Tucker Special
Committee decided that the severance proposals could not be justified and that
severance arrangements should be authorized to the extent reasonably necessary
to assure an orderly transition of management. The Tucker Special Committee
asked PaineWebber to report on the terms of any consulting arrangement that
Bradley would consider with Kenneth Tucker. The Tucker Special Committee
continued to work with PaineWebber to complete the response to Kenneth
Tucker's proposal at meetings on September 22 and September 25, 1995.
Following the execution of the amendment to the Exclusivity Agreement,
Bradley, Tucker and their respective representatives conducted extensive due
diligence on each other and began work on definitive documentation for the
transaction. On September 11, 1995, Bradley and Tucker issued a joint press
release indicating that the parties were involved in negotiations concerning a
possible business combination. On September 14, 1995, Bradley's attorneys
circulated to all parties the initial drafts of a proposed Merger Agreement
and the proposed Amended TOP Partnership Agreement.
In early September 1995, Bradley engaged Alex. Brown to provide investment
banking advice in connection with the proposed Tucker transaction and, if
requested, to render a fairness opinion with respect to such transaction.
Alex. Brown and Bradley subsequently executed a formal engagement letter
concerning such activities on September 15, 1995. Following its engagement,
Alex. Brown and senior management of Bradley conducted additional financial
due diligence concerning Tucker and its properties. As a result of this
financial due diligence, on September 22, 1995, Bradley informed PaineWebber
that it would only proceed with a transaction in which each share of Tucker
Common Stock would be converted into the right to receive .646 of a share of
Bradley Common Stock. Based on the closing price of Bradley Common Stock on
September 22, 1995 of $16.375 per share, the market value of Bradley's revised
proposal was approximately $10.58 per share of Tucker Common Stock. On
September 22, 1995, during a telephonic meeting of the Tucker Special
Committee, PaineWebber informed the Special Committee of the revised Bradley
exchange ratio proposal and that Bradley had said that the revision was due to
significant concerns with respect to specific properties. Although the Tucker
Special Committee did not take any formal action with respect to the revised
exchange ratio, the consensus of
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the Tucker Special Committee was that an exchange ratio of .646 was
inadequate, and that PaineWebber should continue negotiating with Bradley
through the upcoming weekend to increase the exchange ratio. Extensive
negotiations concerning the proposed exchange ratio then continued between
PaineWebber and Bradley. As a result of these negotiations, Bradley agreed to
increase its exchange ratio so that each share of Tucker Common Stock would be
converted into the right to receive .665 of a share of Bradley Common Stock.
Bradley also agreed that (i) if the Closing Price of Bradley Common Stock was
between $15.50 and $16.00, the exchange ratio would be determined by dividing
$10.64 by the Closing Price, and (ii) if the Closing Price of a share of
Bradley Common Stock was $15.50 or less, the exchange ratio would then be .686
of a share of Bradley Common Stock. In connection with making this proposal,
Bradley also demanded an extension of the period under the Exclusivity
Agreement.
On September 25, 1995, the Tucker Special Committee and Kenneth Tucker held
a telephonic meeting with PaineWebber to review, among other things, the
status of negotiations with Bradley. PaineWebber informed those participating
in the meeting of the revised proposal which arose from the weekend's
negotiations and that Bradley had scheduled a meeting of the Bradley Board of
Directors for the following day at which the Bradley Board would be asked to
consider the terms of the revised proposal. Because the entire Tucker Board of
Directors was not present, the members of the Tucker Board present did not
take any action with respect to the transaction or the exchange ratio. The
consensus of the Tucker Board members present was that there were no other
alternatives available to Tucker that were likely to be more favorable and
that PaineWebber should not communicate anything to Bradley which would
discourage its Board from considering the revised proposal. PaineWebber
thereafter informed Bradley that, because the Tucker Board had not yet acted,
PaineWebber could not assure Bradley that the revised terms would be
acceptable. However, PaineWebber believed that, based on its discussions to
date with the Tucker directors present at such meeting, there was a likelihood
that the Tucker Board of Directors would approve the revised terms of the
transaction.
After its discussions regarding the status of negotiations with Bradley at
its September 25, 1995 meeting, the Tucker Special Committee, with
PaineWebber, completed a proposed response to Kenneth Tucker's proposal for
severance and other matters to be presented to Kenneth Tucker by PaineWebber.
The Tucker Special Committee agreed that issues relating to the TOP, the
environmental indemnity with respect to the Commons of Chicago Ridge and a
development relationship between the Tuckers and Bradley were premature for
discussion because Bradley had prepared a draft of the Amended and Restated
TOP Partnership Agreement for consideration by the limited partners in which
the position taken by Bradley on those issues was in conflict with the
proposal by Kenneth Tucker and Bradley had not yet discussed in any detail a
development relationship with the Tuckers. The Tucker Special Committee then
decided to approve the following severance arrangements, and thereby rejected
any other severance proposals: (a) severance for Kenneth Tucker of $225,000,
and, if final terms could be agreed with Bradley, a three-year consulting
agreement at $135,000 per year; (b) severance for all other employees
terminated within six months after the Effective Time equal to four weeks of
salary plus two weeks of salary for each year of service at Tucker or the
Predecessor Business; (c) all stock options would expire thirty days after the
Effective Time in accordance with the terms of the options; (d) the Surviving
Company would be obligated to pay for health insurance for executive officers
for one year after the Effective Time, but each such officer would be
obligated to pay any amount in excess of 200% of the Company's current cost;
(e) Kenneth Tucker would have to pay his own costs after the Effective Time
for his auto lease; and (f) the Tucker Special Committee rejected any
obligation of the Surviving Company to provide secretaries or office space to
Kenneth or Richard Tucker. In connection with the foregoing, Kenneth Tucker
agreed to waive his rights to payment under the pre-existing contract
regarding artwork.
On September 26, 1995, the Board of Directors of Bradley met to consider the
proposed transaction with Tucker. At this meeting, Bradley's senior
management, together with its legal and financial advisors, reviewed with the
Board of Directors the current operations and properties of Bradley and
Tucker, the background of the proposed merger, a summary of due diligence
findings, and certain financial and valuation analyses of the transaction.
Bradley's senior management also discussed with the Board of Directors the
strategic rationale for the transaction and the potential benefits of the
Merger to Bradley and its stockholders. These included, among
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others, management's belief that (i) the Surviving Company would become one of
the largest owners and operators of community shopping centers in the Midwest
with 31 community shopping centers aggregating 7.3 million square feet of
rentable retail space; (ii) the Total Market Capitalization of the Surviving
Company would be significantly greater than that of Bradley; (iii) the Merger
would be accretive to the Surviving Company's net income per share, FFO per
share and cash available for distribution per share in 1996 and 1997; and (iv)
the Merger would improve Bradley's property level management capabilities,
enhance the relationship with existing and proposed tenants, improve access to
the public debt and equity markets, and increase the likelihood of access to
unsecured investment grade debt. Bradley's management also discussed with the
Board the potential negative effects of the Merger, including among others,
that (i) the Surviving Company's debt obligations after the Merger would be
significantly greater than those of Bradley; (ii) Tucker's REMIC would greatly
restrict the ability of the Surviving Company to sell properties
collateralizing the REMIC or to make principal payments prior to the maturity
of the REMIC in 2001; and (iii) various risks relating to the One North State
property. Management also discussed with the Board the possible alternatives
to the Tucker transaction, including continuing Bradley's growth through
expansion of existing shopping centers and selected development and
acquisition of new shopping centers and seeking other acquisition
opportunities or seeking additional equity or debt financing. Bradley's legal
counsel also discussed with its Board, among other things, the terms of the
legal documentation relating to the Merger, certain environmental issues
relating to Tucker's Commons of Chicago Ridge property and the timetable for
completion of the transaction. Alex. Brown also made a presentation to the
Board concerning its financial analyses of the proposed transaction and stated
that it believed it would be able to provide a fairness opinion on the
proposed exchange ratio, based upon the transaction as then negotiated and
upon the facts and circumstances as they existed at the time, subject to
certain assumptions, factors and limitations. Following these presentations
and discussions of the issues raised by these presentations, the Board
authorized management to proceed with the acquisition of Tucker and the
negotiation of definitive documentation with respect to the transaction.
On October 3, 1995, the Tucker Board met to discuss the new proposal and to
decide whether or not to proceed with the transaction with Bradley.
PaineWebber made a presentation at this meeting concerning the feasibility of
reviving negotiations with previous suitors. PaineWebber reviewed the process
followed by the Tucker Board to date, noting that Tucker and its financial
advisors had contacted over 12 prospective buyers and had received seven
indications of interest at various times. PaineWebber then reviewed the
prospective buyers that, at various times, had expressed an interest in a
business combination with Tucker. PaineWebber reported that it had contacted
the Alternative REIT Acquiror who did not indicate an interest in resuming
discussions. PaineWebber also reported to the Tucker Board that it believed
Bradley would terminate discussions with Tucker if Tucker refused to sign the
extension to the Exclusivity Agreement. The Tucker Board also concluded that
it would not be useful to approach any of the cash bidders because such
persons would still need to raise financing for a transaction. Therefore, the
Board determined that because there was no other firm transaction which could
provide greater value to its stockholders, it was too risky to take a chance
of losing the Bradley transaction. As a result, on October 3, 1995, the
parties executed a second amendment to the Exclusivity Agreement which
extended the exclusive negotiation period to October 31, 1995.
Immediately after the Tucker Board meeting on October 3, 1995, and at
subsequent meetings on October 12 and October 23, 1995, the Tucker Special
Committee met to discuss the severance arrangements and other compensation
arrangements for the Management Directors as well as for the employees of
Tucker generally. The Tucker Special Committee approved a general policy for
Tucker employees of severance pay equal to six weeks' base salary plus two
weeks' base salary for each full year of regular full-time employment; this
policy was adopted for all officers and employees, except for William Karnes,
who had an existing employment agreement, and Kenneth Tucker, for whom the
Tucker Special Committee approved an aggregate severance payment of $225,000.
In addition, the Tucker Special Committee approved the terms of a proposed
consulting agreement between Bradley and Kenneth Tucker. See "The Merger--
Conflicts of Interest Arising from Benefits to Certain Officers and Directors
of Tucker." The Tucker Special Committee also approved reimbursements by
Tucker on behalf of the limited partners of TOP, including the Management
Directors, for counsel and other advisors to the limited partners, of up to an
aggregate of $20,000, in order to facilitate a more orderly and expeditious
discussion with Bradley of the proposed Amended TOP Partnership Agreement.
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After the execution of the second amendment to the Exclusivity Agreement on
October 3, 1995, the parties, primarily through their legal counsel and
financial advisors, focused on negotiating the terms of the Merger Agreement
and the related documentation. The negotiations initially focused on, among
other things, the actions which the parties could take between the execution
of the Merger Agreement and the closing, including the manner in which
Tucker's Board could address and consider any subsequent acquisition proposal,
the payment of dividends, the indemnification which would be provided to
Tucker's directors after the transaction, the conditions to closing the
transaction, the termination rights of the various parties, and the amount of
the termination fee to be paid to the parties and the conditions under which
such termination fee would be paid. In the initial discussions, Bradley
requested that it receive a termination fee of $4,000,000 plus reimbursement
for out-of-pocket expenses up to $2,000,000 if any one of several specified
events occurred following the execution of the Merger Agreement. Tucker sought
to reduce the termination fee to $1,500,000 (plus reimbursement for reasonable
out-of-pocket expenses), to limit the number of circumstances in which it
would be paid and to make the provision mutual so that Tucker would receive a
termination fee from Bradley under certain circumstances.
In these initial discussions, Bradley requested that its obligations to
consummate the transaction be conditioned on, among other things, a receipt of
a favorable environmental report with respect to one of Tucker's properties.
Tucker refused to agree to such a condition and instead requested that such
report be completed prior to the execution of the Merger Agreement. After
extensive negotiations, Bradley agreed to conduct such study prior to
executing the Merger Agreement. As a result, however, the parties understood
that the execution of the definitive Merger Agreement would have to be delayed
until late October when this study would be completed.
The final negotiations concerning the Merger Agreement centered primarily on
the covenants of the parties between signing of the definitive acquisition
documents and closing, conditions to closing the transaction and the amount of
the termination fee and the circumstances in which it would be paid. Following
extensive negotiations, Bradley agreed to reduce the amount of the termination
fee to $3,000,000 plus reimbursement of out-of-pocket expenses up to
$2,000,000. It was also agreed that this fee only would be paid in certain
limited circumstances. See "The Merger Agreement--Termination Amount and
Expenses." If the Merger Agreement was terminated in certain other
circumstances, the parties agreed that Bradley only would be reimbursed for
its out-of-pocket expenses up to $2,000,000. In exchange for these changes,
Tucker agreed to waive its request that it receive a termination fee or
expense reimbursement. In these negotiations, the parties also agreed that, in
addition to the other conditions set forth in the Merger Agreement, Bradley's
obligation to close the Merger would be conditioned on: (i) receipt of
estoppel certificates with respect to certain leases; (ii) the consent of all
of the limited partners of TOP to the amendment and restatement of the TOP
Partnership Agreement; and (iii) the consent of certain third parties
including the Indenture Trustee for the Tucker REMIC. See "The Merger
Agreement--Conditions to the Merger."
During this period, Tucker and Bradley negotiated the proposed terms of the
Amended TOP Partnership Agreement with the Management Directors acting on
behalf of the limited partners of TOP. Bradley's initial draft of the Amended
TOP Partnership Agreement made changes to the existing agreement which were
designed to limit the influence and control of the limited partners, to cause
TOP to operate more like a Bradley subsidiary controlled by Bradley and to
expand certain environmental indemnities given by the Management Directors at
the time of Tucker's initial public offering in 1993. The Management
Directors' comments focused on, among other things, the ability of the limited
partners to approve further issuances of TOP Units and transactions involving
the Surviving Company or TOP, the allocation of taxable income among the
partners of TOP, the continuing indemnification obligations of the Management
Directors with respect to certain environmental matters relating to TOP's
Commons of Chicago Ridge property, the right of the limited partners to
convert their TOP Units into Bradley Common Stock and the request of the
limited partners that, in exchange for certain concessions, they be granted
registration rights from Bradley upon the conversion of their TOP Units to
Bradley Common Stock.
On October 20, 1995, Bradley's Board of Directors held a special meeting to
approve the transaction. At such meeting, senior management of Bradley and its
legal and financial advisors updated the Board on the events since its
September 26th meeting, including the terms of the proposed Merger Agreement
and the proposed Amended TOP Partnership Agreement. Legal counsel also gave a
presentation to the Board on the timetable
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concerning the execution of definitive documentation relating to the
transaction and certain disclosure issues relating thereto. Alex. Brown then
reviewed with the Board its financial analysis of the transaction and then
rendered its oral fairness opinion to the Board of Directors that, as of such
date, based upon the facts and circumstances as they existed at the time, and
subject to certain assumptions, factors and limitations set forth in such
opinion, the Exchange Ratio was fair, from a financial point of view, to
Bradley's stockholders. Following such discussions, the Board of Directors of
Bradley unanimously approved the Merger, the proposed Merger Agreement and the
transactions contemplated thereby.
On October 23, 1995, Tucker's Board of Directors held a special meeting to
receive an update on the status of the merger discussions with Bradley. At
such meeting, Tucker's legal advisors gave the Board a presentation on the
terms of the proposed Merger Agreement and the Amended TOP Partnership
Agreement. The Board also reviewed alternatives to the Merger and concluded
that a transaction with Bradley would result in greater long-term value for
Tucker's stockholders than remaining independent.
Following the October 23rd meeting, the Management Directors, as limited
partners of TOP, concluded their negotiations with Bradley and Tucker on the
Amended TOP Partnership Agreement. Following extensive discussions, the
Management Directors agreed that the limited partners would relinquish any
control or approval rights that they have under the TOP Partnership Agreement
in exchange for limitations on the dissolution, merger or sale of all or
substantially all of the assets of TOP during the 24-month period following
consummation of the Merger. The limited partners also agreed to permit
Bradley, as general partner, to issue additional TOP Units under certain
conditions, but received from Bradley registration rights for their TOP Units.
See "The Merger Agreement--Amended TOP Partnership Agreement." With regard to
the environmental indemnity concerning the Commons of Chicago Ridge, Bradley
provided Tucker and the Management Directors with a copy of an environmental
report on the property which had been prepared by the outside consultant.
Extensive negotiations then followed concerning the results of this report and
the remediation work which was recommended by this consultant. Following these
discussions, the parties agreed to hire a new consultant and to share the cost
of the consultant's report on this property. It was agreed that if the new
consultant recommended any remediation efforts which Bradley wished to
implement, TOP and the Management Directors would each pay fifty percent of
the cost of such remediation, with the Management Directors aggregate
liability limited to a maximum of $200,000.
On October 29, 1995, the Tucker Board of Directors met to consider the
proposed merger transaction with Bradley. At this meeting, PaineWebber
rendered its oral fairness opinion to the Board of Directors that, as of such
date, based upon the facts and circumstances as they existed at the time, and
subject to certain assumptions, factors and limitations, the proposed Exchange
Ratio was fair, from financial point of view, to Tucker's stockholders.
Following such discussion, the Board of Directors of Tucker unanimously
approved the Merger, the proposed Merger Agreement, the proposed Amended TOP
Partnership Agreement and the transactions contemplated thereby. In addition,
the Special Committee approved the proposed Amended TOP Partnership Agreement
and the terms of the severance and consulting agreements with members of
management.
REASONS FOR THE MERGER; RECOMMENDATION OF THE BOARD OF DIRECTORS OF TUCKER
At a special meeting of Tucker's Board of Directors held on October 29,
1995, Tucker's management and representatives of PaineWebber made
presentations concerning the business and prospects of Tucker and Bradley, and
the potential combination of Tucker and Bradley. The Tucker Board of Directors
also reviewed the terms of the Merger Agreement with Tucker's management and
Tucker's financial and legal advisors. BY UNANIMOUS VOTE, THE TUCKER BOARD OF
DIRECTORS DETERMINED THAT THE MERGER IS FAIR TO, AND IN THE BEST INTERESTS OF,
TUCKER AND ITS STOCKHOLDERS, APPROVED AND ADOPTED THE MERGER AND THE MERGER
AGREEMENT AND THE TRANSACTIONS CONTEMPLATED THEREBY, AND RESOLVED TO RECOMMEND
THAT TUCKER'S STOCKHOLDERS APPROVE THE MERGER AND THE MERGER AGREEMENT.
The Tucker Board of Directors believes that the Merger provides an
opportunity for Tucker's stockholders to become equity holders in a REIT with
greater potential than Tucker for long-term appreciation. The Tucker Board of
Directors also believes that the Merger will combine complementary assets of
Tucker and Bradley,
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while enabling the Tucker portfolio to benefit from the reputation of
Bradley's experienced management team. The Tucker Board of Directors also
believes that the Surviving Company will benefit from Tucker's field
management capabilities. In addition, the Tucker Board of Directors believes
that, to the extent operations of Tucker and Bradley are integrated following
the Merger, cost reductions and other efficiencies will be possible. The
material factors considered by Tucker's Board of Directors in approving the
Merger are described below.
In making its determination with respect to the Merger, the Tucker Board of
Directors considered the following factors which were material to its
decision:
(i) information relating to the financial performance, condition,
business operations and prospects of Tucker and Bradley and current
industry, economic and market conditions. In this regard, the Board of
Directors placed special emphasis on, and viewed as favorable to its
determination, interim 1995 historical and projected full year 1995 and
1996 financial information for both Tucker and Bradley. The Tucker Board
believed that Tucker's capital structure was too highly leveraged. The
Tucker Board of Directors also considered the decline in Tucker's FFO and
cash available for distribution which has been caused by, among other
things, Tucker's high leverage and difficulty in accessing capital markets.
(ii) possible alternatives to the Merger for enhancing stockholder value,
such as improving the profitability of Tucker's existing property
portfolio, raising additional capital and acquiring new properties. In this
regard, the Board of Directors agreed that, at that time, there were no
feasible alternatives that were available to Tucker that were as likely in
the near term to significantly improve the profitability of Tucker's
existing operations, and that Tucker, as a stand-alone entity, would
experience difficulty in accessing the capital markets on acceptable terms.
(iii) the Tucker Board believed that the Merger was the best offer
reasonably available for Tucker's stockholders. The Board believed that
there were no other prospective purchasers that both had the financial
ability to complete the transaction and would be willing to pay an
aggregate consideration greater than that to be paid by Bradley in the
Merger. In particular, Tucker and its financial advisors had contacted over
12 prospective buyers and had received seven indications of interest at
various times. Certain proposals purported to offer consideration nominally
higher than that to be paid in the Merger, however, all of the parties
making such proposals insisted on performing additional due diligence
before finalizing the amount of the merger consideration. Certain proposals
for a cash purchase price were also subject to the uncertain ability of the
purchaser to raise financing. In the case of other proposed stock
transactions, the Tucker Board believed that none of the other proposals
would result in the type of operating synergies and potential for long-term
appreciation offered by a combination with Bradley.
(iv) the anticipated cost savings and operating efficiencies available to
the Surviving Company from the Merger, particularly in the reduction of
overhead expenses. The Tucker Board did not attempt to quantify those
savings with precision; however, Tucker notes that Bradley has estimated
that a total of $1.4 million of corporate level general administrative
expenses may be reduced as a result of the Merger. See "Unaudited Pro Forma
Combined Financial Statements."
(v) the companies' stock price multiples relative to each other and to
the multiples of comparable REITs (see "--Opinion of Tucker's Financial
Advisor"). In particular, the Board viewed as favorable to its
determination the fact that Bradley's stock price multiple of 9.5x was
higher than the corresponding multiple of 7.1x, for Tucker based on their
respective closing stock prices as of October 25, 1995 and FFO calculations
for the twelve month period ended June 30, 1995. In addition, the Board
believed that there was little that Tucker could do in the reasonably
foreseeable future that would be likely to significantly increase Tucker's
stock price multiple. The Board viewed Bradley's higher stock price
multiple as favorable to its determination because such higher multiple
suggested that the Surviving Company's multiple could exceed the multiple
of Tucker on a stand-alone basis.
(vi) the terms of the Merger Agreement, including the Exchange Ratio and
the equity interest in the Surviving Company to be received by Tucker's
stockholders. In this regard, the Board of Directors noted that the
Exchange Ratio had been determined through arms-length negotiations and
fairly reflected the current market price of the common stock of the two
companies. See "Summary--Comparative Market Data."
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(vii) the fact that, based on the analysis of Paine Webber, the Merger
will be accretive to Bradley's net income per share, FFO per share and cash
available for distribution per share, and thereby will increase the
likelihood of an increase in the value of the Bradley Common Stock to be
received by the Tucker stockholders in the Merger. See "--Opinion of
Tucker's Financial Advisor." The Unaudited Pro Forma Combined Financial
Statements contained herein illustrate the effect of the Merger on FFO for
the nine months ended September 30, 1995.
(viii) the structure of the Merger. In this regard, the Board of
Directors placed special emphasis on, and viewed as favorable to its
determination, the fact that the Merger, as a "stock-for-stock" rather than
a "cash-for-stock" transaction, will provide an opportunity for Tucker's
stockholders to share in any future appreciation of the Surviving Company,
as well as the fact that the Merger is intended to enable Tucker's
stockholders to convert their shares of Tucker Common Stock into shares of
Bradley Common Stock on a tax-free basis.
(ix) the similarities between the two companies. In this regard, the
Board noted that Bradley and Tucker are of comparable size, both are
focused primarily in the retail sector and the properties of both are
concentrated in the Midwest. The Surviving Company will have a strong
grocery store, drug store and value-oriented retail tenant base, becoming a
leading owner and operator of community shopping centers in the Midwest.
(x) the complementary strengths of the two companies, including Tucker's
property management and leasing capabilities and superior property level
operational systems and Bradley's property acquisition and capital markets
expertise.
(xi) benefits for the Surviving Company's stockholders from the larger
Surviving Company, including the Board's expectation that, in the future,
the Surviving Company will have improved access to capital markets for
future growth. In this regard, the Board noted that Bradley is
significantly less highly leveraged than Tucker, and that the Surviving
Company will have more conservative leverage ratios than Tucker.
(xii) the fact that the Surviving Company will have an increased number
of properties and increased gross leasing area which will allow it to
better attract national tenants and to obtain increased negotiating
leverage with tenants.
(xiii) the Total Market Capitalization of the Surviving Company will be
larger than Tucker's current Total Market Capitalization, providing
Tucker's stockholders with enhanced liquidity.
(xiv) the opinion, analyses and presentations of PaineWebber described
below under "--Opinion of Tucker's Financial Advisor," including the
opinion of PaineWebber to the effect that, as of the date of such opinion,
and based upon and subject to certain matters stated therein, the Exchange
Ratio was fair from a financial point of view to the holders of Tucker
Common Stock. In this respect, while the Tucker Board of Directors did not
explicitly adopt PaineWebber's financial analyses, the Tucker Board of
Directors placed special emphasis on such analyses in its overall
evaluation of the Merger and viewed such analyses as favorable to its
determination. The Board viewed PaineWebber's opinion as favorable to its
determination because PaineWebber is an internationally recognized
investment banking firm with experience in the valuation of businesses and
their securities in connection with mergers and acquisitions and in
providing advisory services and raising capital for companies in the real
estate industry. The opinion of PaineWebber as to the fairness of the
Exchange Ratio was confirmed in writing as of January , 1996.
The Tucker Board also considered the following potentially negative factors
in its deliberations concerning the Merger:
(i) the fact that, because the Exchange Ratio is fixed when the price of
Bradley Common Stock falls below $15.50, a decline in the value of Bradley
Common Stock below $15.50 would reduce the value of the consideration to be
received by Tucker's stockholders in the Merger. In particular, the Board
considered that, at Bradley's closing stock price as of October 27, 1995 of
$15.00 per share, the transaction had a current value to Tucker
stockholders of $10.29 per share while Tucker's share price on October 27,
1995 was $10.38 per share;
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(ii) the decline in Bradley's stock price immediately preceding the
execution of the Merger Agreement. In this regard, the Board considered the
fact that there had been a general decline in retail and related
industries' stock prices;
(iii) the various conditions to Bradley's obligations to consummate the
Merger. See "The Merger Agreement--Conditions to the Merger;"
(iv) the risk that the anticipated benefits of the Merger may not be
realized; and
(v) the fact that under the terms of the Merger Agreement, Tucker and its
directors, officers, employees, agents and representatives would be
prohibited from initiating, soliciting, encouraging, participating in
negotiations or otherwise facilitating a proposal of an acquisition by or
business combination with any other party unless, among other things, the
Tucker Board determines, based on the advice of counsel, that such action
is required for the Tucker Board to comply with its fiduciary duties to
stockholders under applicable law, and the possibility that Tucker may be
required, if the Merger Agreement is terminated under certain
circumstances, to pay Bradley a termination fee of $3,000,000 and to
reimburse Bradley for up to $2,000,000 of its out-of-pocket expenses
incurred in connection with the Merger. The Tucker Board recognized that
the inclusion of such provisions in the Merger Agreement would render it
unlikely that a more attractive offer for the acquisition of Tucker would
be presented to Tucker and its stockholders; however, the Board believed
that, based on its efforts to find a buyer for Tucker, the Merger Agreement
represents the best offer reasonably available to Tucker and its
stockholders.
The Tucker Board of Directors realized that the leverage of the Surviving
Company would be greater than Bradley's existing leverage; however, the Board
did not view this as a negative factor because the increase in leverage would
result from the fact that Tucker is more highly leveraged than Bradley and
that the Surviving Company would be less highly leveraged than Tucker.
The Tucker Board of Directors also was aware of the provisions of the Merger
Agreement affording indemnification and directors' insurance to the directors
of Tucker for actions and omissions of such persons occurring prior to the
Effective Time. These provisions were important to the Tucker Board; however,
this factor did not affect the Tucker Board's evaluation or recommendation of
the transaction because such provisions are customary in agreements relating
to business combinations.
In view of the wide variety of factors considered by the Tucker Board of
Directors, the Tucker Board of Directors did not quantify or otherwise attempt
to assign relative weights to the specific factors considered in making its
determination. However, in the view of Tucker's Board of Directors, the
potentially negative factors considered by it were not sufficient, either
individually or collectively, to outweigh the positive factors considered by
the Board of Directors in its deliberations relating to the Merger.
The Tucker Board of Directors was aware of PaineWebber's potential long or
short positions in Tucker's securities and that PaineWebber had also provided
financial advisory services and investment banking services in the past for
Bradley (as well as for other public companies which participated in the
solicitation process), including on Bradley's July Offering. The Tucker Board
did not view these facts as unfavorable to the Board's determination or the
Board's special emphasis on PaineWebber's analyses and opinion. The Board was
also aware that a substantial portion of PaineWebber's compensation would be
contingent upon consummation of the Merger and did not view such contingency
as unfavorable to the Board's determination or the Board's special emphasis on
PaineWebber's analyses and opinion. The reasons that the Board did not view
such potential conflicts of PaineWebber unfavorably were (i) the Board's
belief that PaineWebber would adhere to high standards of professionalism in
connection with its engagement; (ii) the fact that contingent fees for
financial advisors are common in merger and acquisition transactions; and
(iii) the fact that such financial advisors frequently conduct securities
trading operations as an integral part of their businesses and, accordingly,
frequently retain the right to effect trades in the securities of the clients
to which they are providing merger and acquisition advisory services. In
addition, the Board was aware that certain members of the management of Tucker
and the Board of Directors of Tucker have certain interests in the Merger that
are separate from the
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interests of stockholders of Tucker generally. See "--Conflicts of Interest
Arising from Benefits to Certain Officers and Directors of Tucker." On
balance, the Board viewed such interests as neutral to its determination
because of the Board's belief that such interests were reasonable under all of
the circumstances.
As discussed in "Background of the Merger," the Tucker Board appointed the
Tucker Special Committee to evaluate and negotiate on behalf of Tucker any
compensation, severance and other arrangements or transactions involving
Tucker's management which would not be available to all of Tucker's
stockholders. The Tucker Special Committee was not empowered to negotiate any
other matters relating to the Merger. The Tucker Special Committee retained
Rudnick & Wolfe as its independent counsel and received the advice of
PaineWebber, Tucker's investment banking advisor. At the October 29, 1995
Tucker Board meeting, the Tucker Special Committee approved the terms of the
compensation, severance and consulting arrangements with members of management
and the terms of the Amended TOP Partnership Agreement.
The Tucker Special Committee paid particular attention to the Severance
Agreement and Consulting Agreement of Kenneth Tucker. In particular, the
Tucker Special Committee noted that the amounts to be paid under the Severance
Agreement were larger than the amounts payable to other employees and that no
other employee would have a consulting arrangement. The Tucker Special
Committee considered the amounts payable to Kenneth Tucker under the Severance
Agreement and the Consulting Agreement to be reasonable for a chief executive
officer. The Tucker Special Committee did not see a conflict of interest in
approving the severance arrangements for William M. Karnes, who had a pre-
existing employment arrangement, or Norris Eber, both of whom were not
directors, or Tucker's Severance Plan, which would be available to all
employees. The Tucker Special Committee did not view the severance
arrangements of Richard Tucker and Harold Eisenberg to be materially different
in amount from the amounts they would have received under the Severance Plan.
The Tucker Special Committee viewed all such severance arrangements as
beneficial because such arrangements would help assure the continuity of
Tucker's management and employees through the consummation of the Merger. The
Tucker Special Committee evaluated the proposed transactions with management
within the context of the Merger taken as a whole, and not in isolation,
because such transactions would not have been considered absent Bradley's
indication to Tucker that many Tucker employees, including members of Tucker
management, would be terminated as a result of the Merger.
In the event the Merger is not consummated for any reason, Tucker will
continue to pursue its business objectives of maximizing the value of its
properties and reducing overhead to increase its net cash flow. Tucker would
also seek to reduce the amount of its indebtedness through potential sales of
properties and improved cash flow. In addition, Tucker may seek another
strategic combination. The Tucker Board of Directors believes there are no
feasible alternatives to the Merger available to Tucker at the present time
that are likely to significantly improve the profitability of Tucker's
existing operations or result in greater stockholder value.
OPINION OF TUCKER'S FINANCIAL ADVISOR
Tucker originally retained PaineWebber to render financial advisory services
in connection with a possible business combination with another public real
estate company. Tucker has requested PaineWebber to render an opinion as to
whether the Exchange Ratio is fair, from a financial point of view, to the
holders of Tucker Common Stock. PaineWebber was not requested to, and did not
make, any recommendation to the Board of Directors of Tucker as to the
Exchange Ratio to be provided for in the Merger, which Exchange Ratio was
determined through negotiations between Tucker and Bradley. The Tucker Board
engaged Kemper Securities, Inc. to explore a possible business combination
with a particular privately-held real estate company.
The Board of Directors of Tucker retained PaineWebber to act as its advisor
based upon PaineWebber's prominence as an investment banking and financial
advisory firm with experience in the valuation of businesses and their
securities in connection with mergers and acquisitions, negotiated
underwritings, secondary distributions of securities, private placements and
valuations for corporate purposes especially with respect to
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REITs and other real estate companies. The Tucker Board of Directors did not
consider any financial advisor besides PaineWebber with respect to the
solicitation of publicly-traded REITs and other publicly-traded real estate
companies.
On October 29, 1995, PaineWebber delivered its oral opinion to the Board of
Directors of Tucker, which was confirmed in writing on January , 1996 (the
"PaineWebber Opinion"), to the effect that, as of the date of such opinion,
based on PaineWebber's review and subject to the limitations described below,
the Exchange Ratio is fair, from a financial point of view, to the holders of
Tucker Common Stock. The PaineWebber Opinion does not constitute a
recommendation to any stockholder of Tucker as to how any such stockholder
should vote on the Merger. Additionally, the PaineWebber Opinion does not
address the relative merits of the Merger and any other transactions or
business strategies discussed by the Board of Directors of Tucker as
alternatives to the Merger.
TUCKER STOCKHOLDERS ARE URGED TO READ THE PAINEWEBBER OPINION (A COPY OF
WHICH WILL BE ATTACHED AS ANNEX B TO THIS JOINT PROXY STATEMENT/PROSPECTUS)
CAREFULLY AND IN ITS ENTIRETY FOR A DESCRIPTION OF THE PROCEDURES FOLLOWED AND
THE FACTORS CONSIDERED BY PAINEWEBBER.
In rendering its opinion, PaineWebber has, among other things: (i) reviewed,
among other public information, the prospectus used by Tucker in the initial
public offering of the Tucker Common Stock in October 1993, Tucker's Forms 10-
K and related financial information for the fiscal years ended December 31,
1993 and December 31, 1994 and Tucker's Form 10-Q and the related unaudited
financial information for the six months ended June 30, 1995; (ii) reviewed,
among other public information, Bradley's Forms 10-K, Prospectus Supplement
filed on June 29, 1995, Prospectus filed on June 30, 1993 and related
financial information for the three fiscal years ended December 31, 1994 and
the related unaudited financial information for the six months ended June 30,
1995; (iii) reviewed certain information, including financial forecasts,
related to the business, earnings, cash flow, assets and prospects of Tucker
and Bradley, furnished to PaineWebber by Tucker and Bradley, respectively;
(iv) conducted discussions with members of the senior management of Tucker and
Bradley concerning their respective businesses and prospects; (v) reviewed the
historical market prices and trading activities for Tucker Common Stock and
Bradley Common Stock and compared such prices and trading histories with those
of certain other publicly-traded companies which PaineWebber deemed to be
relevant; (vi) compared the financial position and results of operations of
Tucker and Bradley with those of certain other publicly-traded companies which
PaineWebber deemed to be relevant; (vii) reviewed the Merger Agreement; (viii)
reviewed the Amended TOP Partnership Agreement; and (ix) reviewed such other
financial studies and analyses and performed such investigations and took into
account such other matters as PaineWebber deemed appropriate, including its
assessment of general economic, market and monetary conditions.
In preparing its opinion, PaineWebber relied, without independent
verification, on the accuracy and completeness of all information that was
publicly available, supplied or otherwise communicated to PaineWebber by
Tucker and Bradley. PaineWebber assumed that the financial forecasts examined
by it were reasonably prepared and reflected the best currently available
estimates and good faith judgments of the managements of Tucker and Bradley as
to the future performance of Tucker and Bradley, respectively. PaineWebber
also assumed, with the consent of Tucker, that (i) the Merger will be
accounted for under the purchase method of accounting; (ii) the Merger will be
a tax-free reorganization; and (iii) any material liabilities (contingent or
otherwise, known or unknown) of Tucker and Bradley are as set forth in the
consolidated financial statements of Tucker and Bradley, respectively.
PaineWebber has not made an independent evaluation or appraisal of the assets
or liabilities (contingent or otherwise) of Tucker or Bradley, nor has
PaineWebber been furnished with any such evaluations or appraisals. The
PaineWebber Opinion is based upon economic, monetary and market conditions
existing on the date thereof. Furthermore, PaineWebber has expressed no
opinion as to the price or trading range at which the shares of Bradley Common
Stock will trade in the future.
The preparation of a fairness opinion involves various determinations as to
the most appropriate and relevant quantitative methods of financial analyses
and the application of those methods to the particular circumstances
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and, therefore, such an opinion is not readily susceptible to partial analysis
or summary description. Accordingly, PaineWebber believes that its analysis
must be considered as a whole and that considering any portion of the analysis
and of the factors considered, without considering all analyses and factors,
could create a misleading or incomplete picture of the process underlying the
PaineWebber Opinion. Any estimates contained in these analyses are not
necessarily indicative of actual values or predictive of future results or
values, which may be significantly more or less favorable than as set forth
therein. In addition, analyses relating to the values of businesses do not
purport to be appraisals or to reflect the prices at which businesses may
actually be sold. Accordingly, such analyses and estimates are inherently
subject to substantial uncertainty and neither Tucker nor PaineWebber assumes
responsibility for the accuracy of such analyses or estimates. The following
paragraphs summarize the significant quantitative and qualitative analyses
performed by PaineWebber in arriving at the PaineWebber Opinion.
Capitalization Rate Valuation Analysis. The Capitalization Rate Valuation
Analysis assumes that the value of a company owning income-producing real
estate can be determined with reference to the value of individual properties
in the company's portfolio, particularly where few or no additions to the
portfolio are expected. In general, PaineWebber applied capitalization rates
to the projected 1996 Net Operating Income (defined as revenues less property
operating expenses, before interest expense and depreciation) of each of the
Tucker properties, adjusted for assumed management costs and a reserve for
capital expenditures. In the case of the Commons of Chicago Ridge, projected
1997 Net Operating Income was used in light of the current anchor tenant
vacancy. In the case of Meadows Town Mall, projected 1997 Net Operating Income
was used in light of expected significant redevelopment of the property in
1996. For both properties, projected 1997 Net Operating Income was greater
than projected 1996 Net Operating Income. In the case of Rollins Crossing, a
property currently under development, projected stabilized 1998 Net Operating
Income was used. PaineWebber applied capitalization rates of 10.0%-12.5% to
each of the properties, with the exception of Rollins Crossing where a
capitalization rate of 15.0% was used, primarily to account for development
and lease-up risk. The resulting total value reflected an overall
capitalization rate of 10.97% on the total blended Net Operating Income used
(adjusted for assumed management costs and a reserve for capital
expenditures). PaineWebber noted that this translated into a capitalization
rate of approximately 9.75% on projected 1996 Net Operating Income for all
properties (adjusted for assumed management costs and a reserve for capital
expenditures). PaineWebber derived a valuation range reflecting a 25 basis
point discount and premium to the value calculated using the 10.97%
capitalization rate on the blended total Net Operating Income. This valuation
range produced equity values for Tucker of $9.94 to $11.12 per share. Based on
the Bradley October 25, 1995 closing stock price of $15.25, the implied
exchange ratio is .652 to .729. PaineWebber noted that the range of possible
Exchange Ratios (i.e., between .665 and .686) falls within the implied
exchange ratio range. Accordingly, PaineWebber noted that this analysis
supported its conclusion.
Selected Comparable Public Companies Analysis. Using publicly available
information, PaineWebber compared selected historical and projected financial,
operating and stock market performance data of Tucker and Bradley to the
corresponding data of certain publicly-traded companies that PaineWebber
considered comparable to each (the "Tucker Comparables" and the "Bradley
Comparables," respectively). The Tucker Comparables represented relatively
highly-leveraged community shopping center REITs (as implied by the ratio of
debt to Total Market Capitalization, defined as the ratio of (a) outstanding
debt to (b) outstanding debt plus the market value of outstanding common
stock) that had been predominately brought public since 1992. These companies
consisted of Kranzco Realty Trust, Mark Centers Trust, Mid-America Realty
Investments and Saul Centers, Inc. The Bradley Comparables represented
relatively low-leveraged community shopping center REITs that were considered
by the investment community generally to have stronger growth prospects. These
companies consisted of Developers Diversified Realty Corporation, Federal
Realty Trust, IRT Property Company, JDN Realty Corporation and Weingarten
Realty Investors.
PaineWebber derived a range of per share values for Tucker by applying
Tucker's FFO per share for three selected time periods to the corresponding
FFO multiple for the Tucker Comparables for those same periods. The three
periods selected were the twelve months ended June 30, 1995, the year ended
December 31, 1995 and
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the year ended December 31, 1996. Tucker's FFO for the twelve months ended
June 30, 1995 reflected its actual results, while the FFO for the years ended
December 31, 1995 and 1996 reflected Tucker management's expected results. The
median FFO multiple for the twelve months ended June 30, 1995 reflected the
actual FFO results of the Tucker Comparables, while the median FFO multiple
for the year ended December 31, 1995 and the year ended December 31, 1996
reflected the First Call FFO estimates for the Tucker Comparables for those
respective periods. In calculating the FFO multiple for the three selected
periods, the October 25, 1995 closing stock prices of the Tucker Comparables
were used. PaineWebber observed that (a) the FFO multiples for the Tucker
Comparables for the twelve months ended June 30, 1995 ranged from 6.8x to
8.6x, with a median of 7.6x, (b) the FFO multiples for the Tucker Comparables
for the twelve months ended December 31, 1995 ranged from 6.7x to 8.0x, with a
median of 7.4x, and (c) the FFO multiples for the Tucker Comparables for the
twelve months ended December 31, 1996 ranged from 6.4x to 7.5x, with a median
of 7.1x. Based on this analysis, PaineWebber derived values of $11.13, $10.45
and $10.39 for the twelve months ended June 30, 1995, the year ended December
31, 1995 and the year ended December 31, 1996, respectively. Based on the
Bradley October 25, 1995 closing stock price of $15.25, PaineWebber derived an
implied range of exchange ratios of .681 to .730. PaineWebber noted that the
range of possible Exchange Ratios (i.e., .665 to .686) includes values toward
the low end of the implied exchange ratio range. Accordingly, PaineWebber
noted that at the .686 Exchange Ratio this analysis supported its conclusion.
With respect to Bradley and the Bradley Comparables, PaineWebber compared
Bradley's FFO multiple to the median FFO multiple for the Bradley Comparables
for three selected time periods. The three periods selected were the twelve
months ended June 30, 1995, the year ended December 31, 1995 and the year
ended December 31, 1996. For Bradley and the Bradley Comparables, the FFO
multiples for the twelve months ended June 30, 1995 were based on actual FFO
performance, while the FFO multiples for Bradley and the Bradley Comparables
for the year ended December 31, 1995 and the year ended December 31, 1996 were
based on First Call FFO estimates for those periods. In calculating the FFO
multiple for the three selected periods, the October 25, 1995 closing stock
prices of Bradley and its comparable companies were used. PaineWebber noted
that Bradley's 9.5x multiple of latest twelve months FFO, 9.3x multiple of
1995 FFO and 8.8x multiple of 1996 FFO is below the median of the Bradley
Comparables (11.5x, 11.4x, and 10.4x, respectively). PaineWebber concluded
from this analysis that it was not inappropriate to rely on Bradley's closing
stock price of October 25, 1995 in that such closing stock price was not
higher--and might be considerably lower--than the stock price to be expected
for Bradley in relation to the Bradley Comparables.
Adjusted Capital Structure Valuation Analysis. PaineWebber derived an
implied range of Tucker share prices based on a hypothetical equity
transaction that would allow Tucker to achieve a ratio of debt to Total Market
Capitalization similar to community shopping center REITs considered by the
investment community to have conservative capital structures (i.e., 25% to
35%). The analysis was based on adjustments to Tucker management's projected
1996 FFO estimates related to the reduction of debt and increase in number of
shares resulting from the hypothetical equity offering. In addition,
PaineWebber assumed that Tucker's FFO multiple improved to the range of 8.0x
to 10.0x as a result of the improved capital structure.
The analysis produced a hypothetical 1996 FFO for Tucker of $1.10 per share,
assuming an equity offering sufficient to produce a debt to Total Market
Capitalization ratio of 25%, of $1.13 per share, assuming an equity offering
sufficient to produce a debt to Total Market Capitalization ratio of 30%, and
$1.16 per share, assuming an equity offering sufficient to produce a debt to
Total Market Capitalization ratio of 35%. The hypothetical FFO figures
resulted in a range of adjusted equity valuations of $8.83 to $11.57 per
share, assuming FFO multiples of 8.0x to 10.0x. Based on this analysis and the
Bradley October 25, 1995 closing stock price of $15.25, PaineWebber derived an
implied range of exchange ratios of .579 to .759. PaineWebber noted that the
range of possible Exchange Ratios (i.e., .665 to .686) falls within the
implied exchange ratio range. Accordingly, PaineWebber noted that this
analysis supported its conclusion.
Pro Forma Merger Analysis. PaineWebber performed an analysis of the effect
of the Merger on Bradley's FFO per share for the projected years ended
December 31, 1995 through December 31, 1998, which assumed
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that the Merger had been consummated on January 1, 1995. PaineWebber combined
the projected operating results of Tucker (based on Tucker's internal
estimates) with the corresponding projected operating results of Bradley
(based on Bradley's internal estimates) to arrive at the combined company
projected FFO. PaineWebber assumed an Exchange Ratio of .686 and approximately
$500,000 in annual synergistic savings from the Merger, arising primarily from
savings in duplicative public company and general and administrative expenses.
PaineWebber then compared the combined company FFO per share to Bradley's
stand-alone FFO to determine the projected pro forma impact of the Merger on
Bradley's FFO per share. This analysis indicated that the pro forma impact of
the Merger was accretive to Bradley's FFO per share in 1996, 1997 and 1998.
While PaineWebber noted that this accretion to Bradley's projected FFO per
share was substantial, PaineWebber also noted that the Merger resulted in a
substantial increase in Bradley's ratio of debt to Total Market
Capitalization. Specifically, PaineWebber noted that this ratio would
increase, on a pro forma basis, from approximately 17% to approximately 42% as
a result of the Merger, based on the market value of Bradley's shares on
October 25, 1995 and the debt outstanding of Tucker and Bradley on June 30,
1995. PaineWebber noted that a significant reduction in this ratio (by means
of a common equity offering or other equity financing) would be likely to
significantly reduce the accretive impact of the Merger.
Stock Trading History. PaineWebber reviewed the history of trading prices
and volume for Tucker Common Stock and Bradley Common Stock, both separately
and in relation to the Standard & Poor's 500 Index and the PaineWebber REIT
Index. The PaineWebber REIT Index includes 92 equity REITs representing every
property category, including retail, multifamily, commercial, mixed and
lodging. In addition, PaineWebber reviewed the historical implied exchange
ratio between Tucker and Bradley and compared this to the Exchange Ratio.
PaineWebber noted that the Exchange Ratio range of .665 to .686 falls within
the historical exchange ratio range as implied by the recent stock performance
of both companies.
Discounted Equity Valuation Analysis. The discounted equity valuation
analysis is based on the asumption that the value of an equity interest in an
ongoing business is equal to the net present value of expected future cash
distributions to equity holders plus the present value of expected future cash
flow resulting from an assumed sale of the equity interest at a future date.
To establish a current value under this approach, future cash flow must be
estimated and an appropriate discount rate determined. PaineWebber analyzed
Tucker based on a discounted cash flow analysis using Tucker's three-year
projections of FFO and cash distributions to shareholders. PaineWebber derived
a range of values per share by calculating the present value of the three
years of projected per share distributions and a terminal equity value.
PaineWebber assumed that the range of discount rates used of 13% to 17% was
representative of the risks inherent in the ownership of Tucker Common Stock.
The terminal equity value was calculated using Tucker's projected FFO per
share in the third year and a range of FFO multiples from 7.0x to 8.0x, which
multiples were consistent with the recent trading levels of Tucker's shares.
Based on this analysis and the Bradley October 25, 1995 closing stock price of
$15.25, PaineWebber derived a range of possible equity values of $9.82 to
$11.99 per share, which implied a range of exchange ratios between .644 and
.786. PaineWebber noted that the range of possible Exchange Ratios (i.e. .665
to .686) falls within the implied exchange ratio range. Accordingly,
PaineWebber noted that this analysis supported its conclusion.
Contribution Analysis. PaineWebber reviewed Tucker's and Bradley's financial
contribution to the combined entity on a projected pro forma basis. On a pro
forma basis, Tucker's stockholders are retaining 40.1% to 40.9% (using the
Exchange Ratio range of between .665 to .686) of the ownership in the combined
company. Based on Tucker management's financial projections for 1996 through
1998 and Bradley management's financial projections for the same period,
Tucker would contribute on average 48.2% of the FFO of the combined company
and 57.0% of the property-level Net Operating Income of the combined company.
While PaineWebber noted that Tucker stockholders will receive a lesser
percentage of the stock of the combined entity than would theoretically be
indicated by Tucker's contribution of FFO or property-level net operating
income, PaineWebber also noted that the contribution analysis is impacted by
the level of debt on Tucker's and Bradley's balance sheets. Specifically, the
greater the percentage of debt in a company's capital structure, the greater
that
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company's FFO (assuming its cost of debt is less than its cost of equity,
which generally is true and is true for Tucker). On a pro forma basis, based
on the June 30, 1995 balance sheet of each company, Tucker's ratio of debt to
Total Market Capitalization was 59.4% while Bradley's ratio of debt to Total
Market Capitalization was 16.6%.
Comparative Merger Analysis. Using public information, PaineWebber compared
selected financial, operating and stock market performance data of Tucker with
that of certain REITs that have recently consummated merger or acquisition
transactions. These transactions consisted of Wellsford Residential Property
Trust's acquisition of Holly Residential Properties, Inc., Horizon Outlet
Centers, Inc.'s acquisition of McArthur/Glen Realty Corp., and Mid-America
Apartment Communities Inc.'s acquisition of America First REIT Inc. In view of
the facts that there were very few transactions involving REITs and that the
REITs involved in these transactions did not own or manage properties having
similar characteristics to the shopping center properties owned and managed by
Tucker and Bradley, PaineWebber did not believe that any statistical or
financial analyses of these transactions was meaningful as a basis for
evaluating the Merger. Accordingly, PaineWebber did not rely on any such
analyses in reaching its conclusion.
Pursuant to an engagement letter dated February 17, 1995, PaineWebber will
receive a fee of $250,000 upon delivery of the PaineWebber Opinion and its
inclusion in this Joint Proxy Statement/Prospectus. In addition, PaineWebber
will receive a fee equal to 1.3% of the total consideration received by
Tucker's stockholders in the Merger (excluding from such consideration any
assumption by Bradley of Tucker's outstanding indebtedness), less the $250,000
to be paid in connection with the delivery of the PaineWebber Opinion.
PaineWebber's fee is estimated to total approximately $1.4 million.
PaineWebber will also be reimbursed for certain of its expenses, in an amount
not to exceed $75,000. Tucker has also agreed to indemnify PaineWebber, its
affiliates and each of its directors, officers, employees, agents, consultants
and attorneys, and each person or firm, if any, controlling PaineWebber or any
of the foregoing, against certain liabilities, including liabilities under
federal securities law.
In the past, PaineWebber and its affiliates have provided financial advisory
services and investment banking services to Tucker and received fees for the
rendering of these services. PaineWebber has in the past provided financial
advisory services and investment banking services to Bradley (including,
without limitation, acting as managing underwriter for the July Offering of
Bradley Common Stock) and has received fees for such services. In the ordinary
course of PaineWebber's business, PaineWebber may actively trade the
securities of Tucker and Bradley for its own account and for the accounts of
its customers and, accordingly, PaineWebber may at any time hold long or short
positions in such securities.
REASONS FOR THE MERGER; RECOMMENDATION OF THE BOARD OF DIRECTORS OF BRADLEY
The Board of Directors of Bradley believes that the Merger is fair to and in
the best interests of Bradley and its stockholders. ACCORDINGLY, THE BOARD OF
DIRECTORS OF BRADLEY HAS UNANIMOUSLY APPROVED THE MERGER AND THE MERGER
AGREEMENT AND UNANIMOUSLY RECOMMENDS THAT ITS STOCKHOLDERS APPROVE THE MERGER
AND THE MERGER AGREEMENT. In reaching this determination, the Board of
Directors of Bradley consulted with Bradley management, as well as its
financial advisors, legal counsel and accountants, and considered a number of
factors. The material factors considered by Bradley's Board of Directors in
reaching the foregoing conclusions are described below.
In making its determination with respect to the Merger, the Bradley Board
considered the following factors, all of which the Board deemed favorable, in
approving the Merger and the Merger Agreement:
(i) The Merger would significantly increase the amount of property owned
by Bradley. In this regard, the Board noted that following the Merger, the
Surviving Company would own 31 community shopping centers encompassing
approximately 7.3 million square feet of rentable retail space in eleven
states. See "The Companies--Surviving Company." Given Tucker's significant
tenant base, the Bradley Board believed that the Merger would provide the
Surviving Company with a broader and more diverse group of
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tenants, would expand the geographic focus of the Surviving Company's
portfolio and would increase the gross leasing area, reducing the potential
impact on the Surviving Company of the loss of any tenants and enhancing
the Surviving Company's ability to attract national tenants and to obtain
increased negotiating leverage with tenants. Accordingly, the Bradley Board
believed that the Merger would enhance the Surviving Company's position
relating to leasing, and this was viewed by the Board as a favorable factor
in considering the Merger.
(ii) The Board reviewed information relating to the financial
performance, business operations and prospects of Tucker and Bradley and
current industry, economic and market conditions. In this regard, the
Bradley Board placed special emphasis on, and viewed as favorable to its
determination, analysis of Bradley's management and Alex. Brown which
indicated that the Merger would be accretive to the Surviving Company's net
income per share, FFO per share and cash available for distribution per
share in 1996 and 1997. The Unaudited Pro Forma Combined Financial
Statements contained herein illustrate the effect of the Merger on net
income per share for the nine months ended September 30, 1995. On a pro
forma basis, net income per share is $.78 for the nine months ended
September 30, 1995, instead of $.62 on a historical basis. See "Unaudited
Pro Forma Combined Financial Statements."
(iii) The Total Market Capitalization of the Surviving Company would
increase as a result of the Merger. For example, the Total Market
Capitalization of the Surviving Company as of September 30, 1995 would be
approximately $484.0 million, which is considerably greater than Bradley's
Total Market Capitalization of $193.2 million on such date. Based in part
on discussions with advisors, investment banking firms and lenders, the
Board of Directors believed that this increased Total Market Capitalization
would provide Bradley's stockholders with enhanced liquidity and would make
shares of Bradley Common Stock a more attractive investment for
institutional investors, thereby enhancing Bradley's ability to raise
additional equity in the future. In this regard, the Board of Directors
also believed that the greater Total Market Capitalization would also make
it possible for the Surviving Company to secure debt financing from sources
such as the investment grade debt market, convertible debt market and
private placement markets at potentially lower interest costs and more
flexible terms than those currently obtained by either Bradley or Tucker.
Therefore, the Board viewed the increase in the Total Market Capitalization
of the Surviving Company as favorable.
(iv) The Merger would enhance the ability of the Surviving Company to
improve the terms of its revolving credit agreement, including increasing
the amount available for borrowing under such line and obtaining such
financing on an unsecured basis. See "The Companies--Surviving Company."
The Board believed that this could have a favorable impact on the operating
results of the Surviving Company and thus viewed this factor as favorable.
(v) The Merger would lead to on-going operating synergies and additional
cost savings, initially estimated to be approximately $1.4 million per
annum prior to the offset of the one-time costs associated with the Merger
(which costs are estimated to be approximately $8.5 million). See
"Unaudited Pro Forma Combined Financial Statements." The Board believed
that the opportunities for economies of scale and operating efficiencies
would result in significant savings for annual general and administrative
costs and property operating costs, particularly due to the integration of
office facilities, information systems, support functions and the combined
purchasing power of the two companies. Thus, the Board viewed this factor
as favorable.
(vi) The Merger would broaden Bradley's property management capabilities.
While the current executive officers and directors of Bradley would manage
the business and affairs of the Surviving Company, Bradley's management
indicated that most of Tucker's property management personnel would
continue to be employed following the consummation of the Merger. Given the
strength of Tucker's property-level operational personnel and systems, the
Board believed that this would broaden Bradley's existing property
management capabilities and allow the Surviving Company to internalize its
property management and leasing functions. Thus, the Board viewed this
factor as favorable.
(vii) The Merger could be effected through the issuance of Bradley Common
Stock, rather than through the use of cash or a public offering of equity
or debt securities, which the Board of Directors viewed as favorable.
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(viii) The opinion, analyses and presentations of Alex. Brown described
below under "--Opinion of Bradley's Financial Advisor," including the
opinion of Alex. Brown to the effect that, as of the date of such opinion,
and based upon and subject to certain matters stated therein, the Exchange
Ratio was fair from a financial point of view to the holders of Bradley
Common Stock. In this respect, while the Bradley Board of Directors did not
explicitly adopt Alex. Brown's financial analyses, the Bradley Board of
Directors placed special emphasis on such analyses in its overall
evaluation of the Merger and viewed such analyses as favorable to its
determination. The Board viewed Alex. Brown's opinion as favorable to its
determination because Alex. Brown is an internationally recognized
investment banking firm with experience in the valuation of businesses and
their securities in connection with mergers and acquisitions and in
providing advisory services and raising capital for companies in the real
estate industry.
The Board also considered the following factors, all of which the Board
considered negative, in its deliberations concerning the Merger:
(i) The significant transaction costs involved in connection with
consummating the Merger (estimated at approximately $8.5 million) and the
substantial management time and effort required to effectuate the Merger
and to integrate the businesses of Bradley and Tucker. See "Unaudited Pro
Forma Combined Financial Statements."
(ii) The Surviving Company's debt obligations after the Merger would
increase significantly (aggregating approximately $220.5 million as
compared to $34.7 million for Bradley as of September 30, 1995). The
significant increase in the Surviving Company's ratio of debt to Total
Market Capitalization to approximately 46% as compared to 18% for Bradley
as of September 30, 1995 could increase the risk of default by the
Surviving Company on its indebtedness, adversely affect the market for the
Surviving Company's common stock or inhibit the Surviving Company's ability
to raise capital and issue equity in both the public and private markets.
See "Risk Factors--Substantial Debt Obligations and Terms of Debt."
(iii) Pursuant to the terms of the Tucker REMIC Indenture, principal
payments on the Tucker REMIC Note cannot be made and the properties
collateralizing the Tucker REMIC Note cannot be sold prior to October 1997,
and, thereafter, only upon the payment of significant prepayment penalties.
See "Risk Factors--Restrictions on Ability of Surviving Company to Dispose
of Properties." Accordingly, the Board viewed these restrictions as
negative because they limit the flexibility of the Surviving Company.
(iv) Tucker's One North State property is a "mixed use" property with a
significant office component. In addition, the tenants at Tucker's One
North State property, which account for 16% of the total revenue of the
Surviving Company on a pro forma basis for the nine months ended
September 30, 1995, pay total charges which may be in excess of current
market rates. The leases of these tenants begin to expire in 2001 although
one office tenant has the option exercisable on or before March 31, 1996 to
terminate its lease, effective as of April 1, 1998, upon payment of a $1.8
million cancellation fee. The inability of the Surviving Company to lease
such property, or a significant reduction in the amount of rent and expense
reimbursements paid by the tenants of such property, could have an adverse
impact on the operating results of the Surviving Company. See "Risk
Factors--Real Estate Investment Considerations--Potential Negative Effect
of One North State Property."
(v) The benefits of the transaction to be received by certain officers
and directors of Tucker. See "The Merger--Conflicts of Interest Arising
from Benefits to Certain Officers and Directors of Tucker."
(vi) The risk that the anticipated benefits of the Merger might not be
fully realized.
In the opinion of the Bradley Board, the factors listed above represent the
material potential risks and adverse consequences to Bradley's existing
stockholders which could occur as a result of the transaction. In considering
the Merger, the Board considered the impact of these risks and consequences on
Bradley's existing stockholders. In the opinion of the Bradley Board, however,
these potential risks and consequences were outweighed by the potential
positive factors considered by the Board which are described above.
Accordingly, the Bradley Board voted to approve the Merger and the Merger
Agreement.
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In view of the wide variety of factors considered by the Bradley Board of
Directors, the Bradley Board of Directors did not quantify or otherwise
attempt to assign relative weights to the specific factors considered in
making its determination.
In the event the Merger is not consummated for any reason, Bradley will
continue to pursue its business objectives of (i) maximizing FFO and cash
available for distribution to holders of Bradley Common Stock, (ii) increasing
distributions per share of Bradley Common Stock, (iii) increasing the value of
its properties by continuing its growth through the active management and
expansion of existing shopping centers and selective development and
acquisition of new shopping centers, and (iv) holding its properties for long-
term investment. In addition, Bradley may seek other acquisition opportunities
and additional debt or equity financing.
OPINION OF BRADLEY'S FINANCIAL ADVISOR
In early September 1995, Bradley engaged Alex. Brown to provide certain
investment banking advice and services in connection with the possible
acquisition of Tucker, including rendering its opinion as to the fairness,
from a financial point of view, of the Exchange Ratio to Bradley's
stockholders. A letter agreement confirming the terms of such agreement was
entered into between Bradley and Alex. Brown on September 15, 1995.
At the September 26, 1995 meeting of the Bradley Board of Directors,
representatives of Alex. Brown made a presentation with respect to the Merger
and stated that Alex. Brown believed it would be able to provide a fairness
opinion on the Exchange Ratio, based upon the transaction as then negotiated
and upon the facts and circumstances as they existed at the time, subject to
certain assumptions, factors and limitations.
At the October 20, 1995 meeting of the Bradley Board of Directors,
representatives of Alex. Brown amended and supplemented its September 26, 1995
presentation with respect to the Merger and rendered an oral opinion to the
Board of Directors, subsequently confirmed in writing on October 30, 1995,
that, as of such date, based upon the facts and circumstances as they existed
at the time, and subject to certain assumptions, factors and limitations set
forth in such opinion, the Exchange Ratio was fair, from a financial point of
view, to Bradley's stockholders. No limitations were imposed upon Alex. Brown
with respect to the investigations made or procedures followed by it in
rendering its opinion.
THE FULL TEXT OF ALEX. BROWN'S WRITTEN OPINION DATED OCTOBER 30, 1995, WHICH
SETS FORTH, AMONG OTHER THINGS, ASSUMPTIONS MADE, MATTERS CONSIDERED AND
LIMITATIONS ON THE REVIEW UNDERTAKEN, IS ATTACHED AS ANNEX C TO THIS JOINT
PROXY STATEMENT/PROSPECTUS. BRADLEY STOCKHOLDERS ARE URGED TO READ THIS
OPINION IN ITS ENTIRETY. ALEX. BROWN DID NOT RECOMMEND TO BRADLEY THAT ANY
SPECIFIC EXCHANGE RATIOS CONSTITUTED THE APPROPRIATE EXCHANGE RATIO FOR THE
MERGER. ALEX. BROWN'S OPINION IS ADDRESSED TO THE BOARD OF DIRECTORS OF
BRADLEY, ADDRESSES ONLY THE FAIRNESS, FROM A FINANCIAL POINT OF VIEW, OF THE
EXCHANGE RATIO TO BRADLEY'S STOCKHOLDERS AND DOES NOT CONSTITUTE A
RECOMMENDATION TO ANY BRADLEY STOCKHOLDER AS TO HOW SUCH STOCKHOLDER SHOULD
VOTE AT THE BRADLEY SPECIAL MEETING. THE OPINION WAS RENDERED TO THE BOARD OF
DIRECTORS OF BRADLEY FOR ITS CONSIDERATION IN DETERMINING WHETHER TO APPROVE
THE MERGER AND THE MERGER AGREEMENT. THE DISCUSSION OF THE OPINION IN THIS
JOINT PROXY STATEMENT/PROSPECTUS IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO
THE FULL TEXT OF THE OPINION.
In rendering such opinion, Alex. Brown (i) reviewed the Merger Agreement and
certain related documents; (ii) reviewed certain publicly available financial
information concerning Bradley and Tucker and certain internal financial
analyses and other information furnished to it by Bradley and Tucker; (iii)
held discussions with members of the senior managements of Bradley and Tucker
regarding the business and prospects of Bradley and Tucker; (iv) reviewed the
historical reported prices and trading information for Bradley Common Stock
and Tucker Common Stock; (v) compared certain financial and stock market
information for Tucker and Bradley
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with similar information for certain other companies whose securities are
publicly-traded; (vi) reviewed the financial terms of certain recent business
combinations; and (vii) performed such other studies and analyses and
considered such other factors as it deemed comparable, in whole or in part.
In conducting its review and arriving at its opinion, Alex. Brown assumed,
without independent verification, the accuracy and completeness of the
information that it reviewed and relied upon for purposes of rendering its
opinion. With respect to the financial projections of Bradley and Tucker and
other information relating to the prospects of Bradley and Tucker provided to
Alex. Brown by each company, Alex. Brown assumed that such projections and
other information were reasonably prepared and reflected the currently
available judgments and estimates of the respective managements of Bradley and
Tucker as to the likely future financial performances of their respective
companies and of the combined entity. Although Alex. Brown made the foregoing
assumptions concerning the financial projections and other information, in the
course of its due diligence, Alex. Brown reviewed certain of these assumptions
with the respective managements of Bradley and Tucker to confirm that the
assumptions appeared to have a reasonable basis. The financial projections of
Bradley and Tucker that were provided to Alex. Brown were utilized and relied
upon by Alex. Brown in both the Pro Forma Combination Analysis and the
Contribution Analysis summarized below. Alex. Brown also assumed that (i) the
Merger will be accounted for under the purchase method of accounting; (ii) the
Merger will be a tax-free reorganization; and (iii) any material liabilities
(contingent or otherwise, known or unknown) of Tucker and Bradley are as set
forth in the consolidated financial statements of Tucker and Bradley,
respectively. In addition, Alex. Brown did not make and it was not provided
with an independent evaluation or appraisal of the assets of Bradley or
Tucker, nor did it make any physical inspection of the properties or assets of
Bradley or Tucker. Alex. Brown's opinion is based on market, economic and
other conditions as they existed and could be evaluated as of the date of the
opinion letter. Such conditions include, without limitation, the condition of
the U.S. stock markets, particularly in the real estate sectors, and the
current level of economic activity.
The following is a summary of the material analyses undertaken by Alex.
Brown in connection with rendering its fairness opinion to the Board of
Directors of Bradley. For purposes of its analyses, Alex. Brown assumed the
Exchange Ratio set forth in the Merger Agreement.
Discounted Cash Flow Analysis. Alex. Brown analyzed the financial terms of
the Merger using a discounted cash flow approach. The discounted cash flow
approach assumes, as a basic premise, that the intrinsic value of any business
is the current value of the future cash flow that the business will generate
for its owners. To establish a current value under this approach, future cash
flow must be estimated and an appropriate discount rate determined. Alex.
Brown used projections and other information provided by the managements of
Bradley and Tucker to estimate the free cash flows, defined as total revenues
minus property operating and maintenance expenses, property management
expenses, real estate taxes and capital expenditures ("Free Cash Flows") for
the years ended 1996 through 2005, inclusive, using discount rates ranging
from 10.00% to 13.00% and terminal value capitalization rates applied to 2005
projected Free Cash Flow ranging from 9.00% to 11.50%. Alex. Brown's
calculations resulted in a range of values from $250,492,000 to $330,915,000
for Tucker's real estate, on an unleveraged basis, based upon Tucker's
projected Free Cash Flow, with the imputed value of Tucker's real estate being
approximately $283,400,000 under the terms of the Merger.
Alex. Brown also applied a discounted cash flow analysis to Tucker's
projected FFO, defined as net income, excluding extraordinary gains or losses,
plus depreciation from real estate assets, and funds available for
distribution, defined as FFO less capital expenditures, tenant improvements
and commissions ("Funds Available for Distribution"), using discount rates
ranging from 11.50% to 14.25% and terminal value capitalization rates applied
to 2005 FFO and Funds Available for Distribution, as the case may be, ranging
from 9.00% to 11.50%. Alex. Brown's calculations resulted in the following
ranges of values for Tucker: based on a discounted cash flow analysis of
Tucker's projected FFO of $129,933,000 to $167,043,000; and, based on a
discounted cash flow analysis of Tucker's projected Funds Available for
Distribution of $101,191,000 to $131,319,000. Based upon the terms of the
Merger, Tucker's imputed value is $116,100,000.
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Pro Forma Combination Analysis. Alex. Brown reviewed the effects of the
Merger on Bradley's projected FFO for 1995 and 1996, calculated on a pro forma
basis as if the Merger had been completed on January 1, 1995 and after giving
effect to the synergies which Bradley anticipates realizing. Based on such
analysis, Alex. Brown observed that the Merger would be accretive to Bradley's
FFO per share on a pro forma basis in 1995 and 1996.
Contribution Analysis. Alex. Brown also analyzed the relative contributions
of Bradley and Tucker to certain pro forma projected income statement and
balance sheet information (excluding the effect of any synergies which may be
realized from the Merger). The analysis indicated that on a pro forma combined
basis, based on projected performance for 1996, Bradley and Tucker,
respectively, would account for approximately 43% and 57% of the Surviving
Company's revenues; 44% and 56% of the Surviving Company's net operating
income; 77% and 23% of the Surviving Company's net income; 57% and 43% of the
Surviving Company's FFO; 51% and 49% of the Surviving Company's funds
available for distribution; 37% and 63% of the Surviving Company's real estate
assets (at cost); and 59% and 41% of the Surviving Company's outstanding
common stock. Alex. Brown observed that Tucker's pro forma contribution to the
combined company's FFO slightly exceeded the proportion of Bradley Common
Stock to be received by Tucker stockholders in the Merger.
Selected Transactions Analysis. Alex. Brown reviewed the financial terms, to
the extent publicly available, of six pending and completed mergers and
acquisitions between publicly-traded REITs (the "Selected Transactions").
Alex. Brown calculated various financial multiples and the premium over market
value based on certain publicly available information for each of the Selected
Transactions and compared them to corresponding financial multiples for the
Merger and the consideration to be issued to Tucker stockholders in the Merger
based on the Exchange Ratio of .686 (the "Tucker Consideration"). Under this
approach, Alex. Brown considered the following acquisitions: (i) Health Equity
Properties, Incorporated acquisition by Omega Healthcare Investors, Inc., (ii)
Holly Residential Properties, Inc. acquisition by Wellsford Residential
Property Trust, (iii) Security Capital Pacific Incorporated acquisition by
Property Trust of America, (iv) America First REIT, Inc. acquisition by Mid-
America Apartment Communities, Inc., (v) McArthur/Glen Realty Corp.
acquisition by Horizon Outlet Centers, Inc., and (vi) Real Estate Investment
Trust of California acquisition by BRE Properties, Inc. Alex. Brown noted the
multiple of the equity purchase price to last twelve months' FFO was 7.0x for
the Tucker Consideration versus a range of 8.0x to 16.2x, with a mean of
12.7x, for the Selected Transactions. Alex. Brown further noted that the
multiples of adjusted purchase price (equity purchase price adjusted for debt
and cash) to last twelve months' revenues, net operating income, earnings
before interest, taxes, depreciation and amortization ("EBITDA") and total
real estate assets (at cost) were as follows: based upon the ratio of adjusted
purchase price to revenues, 5.6x for the Tucker Consideration versus a range
of 5.9x to 8.6x, with a mean of 7.2x, for the Selected Transactions; based
upon the ratio of adjusted purchase price to net operating income, 8.9x for
the Tucker Consideration versus a range of 9.7x to 24.3x, with a mean of
13.0x, for the Selected Transactions; based upon the ratio of adjusted
purchase price to EBITDA, 9.8x for the Tucker Consideration versus a range of
7.7x to 16.7x, with a mean of 11.9x, for the Selected Transactions; and, based
upon the ratio of adjusted purchase price to total real estate assets (at
cost), .9x for the Tucker Consideration versus a range of .6x to 1.4x, with a
mean of 1.1x, for the Selected Transactions. Alex. Brown also noted that the
Selected Transactions were effected at a range of premia to the target's stock
price one day prior to public announcement of the acquisition of .6% to 46.3%,
with the Tucker Consideration at 4.9% (based upon the closing prices of
Bradley Common Stock and Tucker Common Stock on September 8, 1995, the last
trading day prior to the public announcement of negotiations between Bradley
and Tucker). Alex. Brown noted that the multiples and the premium based upon
the Tucker Consideration were below or within the ranges of multiples and
premia implied by the Selected Transactions.
Selected Public Companies Analysis. Alex. Brown also compared certain
financial information relating to Bradley and Tucker to certain corresponding
information from a group of sixteen REITs engaged primarily in the
acquisition, operation and management of retail shopping centers. Alex. Brown
considered the following companies: Alexander Haagen Properties Inc.,
Developers Diversified Realty Corporation, Federal Realty Investment Trust,
Glimcher Realty Trust, IRT Property Company, JDN Realty Corporation, JP
Realty, Inc.,
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Kimco Realty Corporation, Kranzco Realty Trust, Mark Centers Trust, New Plan
Realty Trust, Regency Realty Corporation, Saul Centers, Inc., Vornado Realty
Trust, Weingarten Realty Investors and Western Investment Real Estate Trust
(the "Public Companies"). Alex. Brown noted the multiple of the equity
purchase price (equity market capitalization for the Public Companies) to last
twelve months' FFO was 7.0x for the Tucker Consideration versus a range of
5.6x to 15.8x, with a mean of 10.9x, for the Public Companies. Alex. Brown
further noted that the multiples of adjusted purchase price (total market
capitalization, defined as equity market capitalization plus debt, for the
Public Companies) to last twelve months' revenues, net operating income,
EBITDA and total real estate assets (at cost) were as follows: based upon the
ratio of adjusted purchase price to revenues, 5.6x for the Tucker
Consideration versus a range of 5.7x to 12.0x, with a mean of 8.6x, for the
Public Companies; based upon the ratio of adjusted purchase price to net
operating income, 8.9x for the Merger versus a range of 7.7x to 17.2x, with a
mean of 12.0x, for the Public Companies; based upon the ratio of adjusted
purchase price to EBITDA, 9.8x for the Tucker Consideration versus a range of
9.1x to 16.5x, with a mean of 11.9x for the Public Companies; and, based upon
the ratio of adjusted purchase price to total real estate assets (at cost),
.9x for the Tucker Consideration versus a range of .8x to 3.1x, with a mean of
1.3x, for the Public Companies. Alex. Brown noted that the multiples based
upon the Tucker Consideration were below or within the ranges of multiples
implied by the Public Companies.
Additionally, Alex. Brown compared, among other things, the debt to Total
Market Capitalization ratios (ratio of total debt from the most recent Form
10-Q to Total Market Capitalization as of October 27, 1995), fiscal year 1996
estimated dividend payout ratios and equity market capitalization as a
multiple of fiscal year 1996 estimated FFO of Bradley, prior to the Merger and
pro forma after the Merger (based upon projections and other information
provided by the respective managements of Bradley and Tucker), with the
corresponding ratios of the Public Companies. The ranges of debt to Total
Market Capitalization ratios, payout ratios and equity market capitalization
multiples for the Public Companies were as follows: based upon the ratios of
debt to Total Market Capitalization, a range of 10% to 74%, with a mean of
41%, for the Public Companies, versus 42% for Bradley after the Merger; based
upon 1996 estimated dividend payout ratios, a range of 63% to 93%, with a mean
of 82%, for the Public Companies, versus 75% for Bradley after the Merger
(assuming no synergies); and, based upon 1996 estimated FFO multiples, a range
of 6.2x to 13.9x, with a mean of 9.4x, for the Public Companies, versus 8.5x
for Bradley after the Merger (assuming no synergies). Alex. Brown noted that
the ratios and multiples based upon the estimated financial characteristics of
Bradley (pro forma after the Merger) were within the ranges of multiples and
ratios implied by the Public Companies.
Stock Trading History. Alex. Brown also reviewed the history of the trading
prices and volume for Bradley Common Stock and Tucker Common Stock for the
period commencing October 27, 1994 through October 27, 1995. In addition,
Alex. Brown noted the distribution of Tucker trading volume by price range for
that period. Alex. Brown reviewed the historic exchange ratio between the
Bradley Common Stock and the Tucker Common Stock since Tucker's initial public
offering. Each of these analyses reflected the general decline in Tucker's
stock price throughout the period.
No transaction or company used in the Selected Transactions Analysis or the
Selected Public Companies Analysis is identical to the Merger, Bradley or
Tucker. Accordingly, such analyses must take into account differences in the
financial and operating characteristics of the companies considered in the
Selected Transactions Analysis and the Selected Public Companies Analysis and
other factors that could affect the acquisition value and public trading value
of the Selected Transactions and Public Companies, respectively.
The foregoing summary describes all of Alex. Brown's material analyses and
factors. The preparation of a fairness opinion is a complex process that
involves determination of the most appropriate and relevant methods of
financial analysis and the application of these methods to the particular
circumstances and, therefore, such an opinion is not readily susceptible to
summary description. Alex. Brown believes that its analyses and summary set
forth above must be considered as a whole and that selecting portions of its
analyses, without considering all analyses, or selecting portions of the
foregoing summary, without considering all factors and analyses, would create
an incomplete view of the process underlying the analyses performed and
factors considered as set forth
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in its opinion. In performing its analyses, Alex. Brown considered general
economic, market and financial conditions and other matters, many of which are
beyond the control of Bradley and Tucker. The analyses performed by Alex.
Brown are not necessarily indicative of actual values or future results, which
may be significantly more or less favorable than those suggested by such
analyses. Accordingly, such analyses and estimates are inherently subject to
substantial uncertainty. Additionally, analyses relating to the value of a
business do not purport to be appraisals or to reflect the prices at which the
business actually may be sold. Furthermore, Alex. Brown has expressed no
opinion as to the prices at which shares of Bradley Common Stock may trade at
any future time.
Pursuant to the letter agreement dated September 15, 1995, between Bradley
and Alex. Brown, if the Merger is consummated, Bradley has agreed to pay Alex.
Brown a fee ("Financial Advisory Fee") of $500,000 for acting as its financial
advisor in connection with the Merger. Bradley also has agreed to pay Alex.
Brown $300,000 for rendering its opinion, which will be credited against any
Financial Advisory Fee. In addition, Bradley has agreed to pay Alex. Brown
$100,000 for each additional fairness opinion requested in connection with any
material amendments or revisions to the Merger Agreement. Bradley also has
agreed to reimburse Alex. Brown for its reasonable out-of-pocket expenses (not
exceeding $50,000) incurred in connection with rendering financial advisory
services, including fees and disbursements of its legal counsel. Bradley has
agreed to indemnify Alex. Brown and its directors, officers, agents, employees
and controlling persons, for certain costs, expenses, losses, claims, damages
and liabilities related to or arising out of its rendering of services under
its engagement as financial advisor.
The Board of Directors of Bradley retained Alex. Brown to act as its
financial advisor based upon Alex. Brown's qualifications, reputation,
experience and expertise, particularly with respect to REITs and other real
estate companies. Alex. Brown is an internationally recognized investment
banking firm and, as a customary part of its investment banking business, is
engaged in the valuation of businesses and their securities in connection with
mergers and acquisitions, negotiated underwritings, private placements and
valuations for corporate and other purposes. Alex. Brown may actively trade
the equity securities of Bradley and Tucker for its own account and for the
account of its customers and accordingly may at any time hold a long or short
position in such securities. In addition, Alex. Brown has acted as a co-
managing underwriter of the July Offering of Bradley Common Stock. Alex. Brown
regularly publishes research reports regarding the real estate industry and
the businesses and securities of Bradley and other publicly-traded companies
in the real estate industry.
CONFLICTS OF INTEREST ARISING FROM BENEFITS TO CERTAIN OFFICERS AND DIRECTORS
OF TUCKER
In considering the recommendation of the Boards of Directors of Tucker and
Bradley to approve the Merger and the Merger Agreement, stockholders should be
aware that certain members of the management and the Board of Directors of
Tucker have certain interests in, and will receive benefits from, the Merger
that are separate from the interests of, and benefits to, stockholders of
Tucker generally.
Severance Plan. In connection with the execution of the Merger Agreement,
Tucker adopted the Severance Plan which Bradley has agreed to assume and be
bound by after the Effective Time. Pursuant to the terms of the Severance
Plan, all employees of Tucker and its affiliates whose employment terminates
under certain specified conditions prior to December 31, 1996 will be entitled
to receive a severance payment equal to six weeks' base salary plus an
additional two weeks' base salary for each full year of regular full-time
employment with Tucker, its predecessors and their respective affiliates
(including TTC), up to a maximum of twice the employee's annual compensation
for the calendar year immediately prior to the employee's termination of
employment.
Severance and Consulting Agreements. In connection with the execution of the
Merger Agreement, Tucker has entered into agreements with the following
employees: Kenneth Tucker, Richard Tucker, Harold Eisenberg, Lawrence Tucker,
Norris Eber and William Karnes. Bradley has agreed to assume and be bound by
each of these agreements after the Effective Time. These agreements are in
place of, and not in addition to, what such employees would otherwise receive
under the Severance Plan.
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The severance agreement with Kenneth Tucker entitles Mr. Tucker to receive a
severance payment of $225,000 if his employment is terminated under certain
specified conditions prior to December 31, 1996 or if he is still employed by
Tucker as of the Effective Time. In addition, if Mr. Tucker's employment is
terminated under certain specified conditions prior to December 31, 1996, he
is entitled to receive (i) twelve months of continued health care coverage for
himself and his dependents following termination of employment, and (ii) car
rental payments through April 1996. The severance agreement also entitles Mr.
Tucker to purchase his existing office furniture at its fair market value and
to exercise any purchase option provided in the current car rental agreement
if his employment is terminated under certain specified conditions prior to
December 31, 1996. In consideration of the foregoing, Mr. Tucker has agreed,
among other things, to waive all of his rights under a lease of art previously
entered into between Mr. Tucker and Tucker and to transfer to the Surviving
Company title to each of the artworks covered by the lease.
Individual severance agreements with Richard Tucker, Harold Eisenberg and
Lawrence Tucker provide that if the employee's employment is terminated under
certain specified conditions prior to December 31, 1996, he will be entitled
to receive (i) a severance payment of $123,000, $122,000 and $58,000,
respectively, and (ii) twelve months of continued health care coverage
following termination of employment. Richard Tucker's severance agreement also
entitles him to purchase his existing office furniture at its fair market
value if his employment is terminated under certain circumstances prior to
December 31, 1996.
Norris Eber's agreement provides that he will receive (i) $139,000 if he is
still employed by Tucker as of the Effective Time, and (ii) a severance
payment of $61,000 and twelve months of continued health care coverage if his
employment is terminated under certain specified conditions prior to December
31, 1996.
The severance agreement with William Karnes provides that he will receive
twelve months of continued health care coverage following termination of
employment if his employment is terminated under certain specified conditions
prior to or concurrently with the consummation of the Merger or if his
employment is terminated for any reason after the consummation of the Merger
but prior to December 31, 1996. Tucker previously entered into an employment
agreement with Mr. Karnes pursuant to which he will receive a severance
payment equal to twelve months' base salary (currently $210,000) if his
employment is terminated under certain conditions.
Bradley also has entered into a three-year consulting agreement with Kenneth
Tucker, effective as of the Effective Time, pursuant to which Mr. Tucker will
receive an aggregate payment of $405,000, consisting of three annual
consulting fee payments of $135,000. The first of these payments will be paid
on the date of the Merger, with the remaining payments being made on the first
anniversary of the Merger and the second anniversary of the Merger. Pursuant
to such consulting agreement, Mr. Tucker will consult with and advise Bradley
on various retail real estate matters as requested by Bradley, provided that
he is not required to devote more than ten hours per month to the performance
of such consulting services. The consulting agreement also provides that
Mr. Tucker will be reimbursed for reasonable business expenses incurred by him
in performing his consulting services.
Indemnification. Pursuant to the terms of the Merger Agreement, Bradley has
agreed to provide the directors, officers, employees, advisors and agents of
Tucker and each of its subsidiaries with all rights to indemnification or
exculpation existing under their respective charters or bylaws in effect as of
the date of the Merger Agreement with respect to matters occurring at or prior
to the Effective Time, and to provide such persons with certain
indemnification rights under the Bradley Charter and the Bradley Bylaws.
Bradley has also agreed to purchase, at or prior to the Effective Time,
liability insurance coverage for Tucker's directors and officers for a period
of six years which will provide the directors and officers with $10,000,000 of
aggregate coverage. In addition, Bradley has agreed to adopt certain
amendments to Tucker's existing indemnification agreements with its directors.
See "The Merger Agreement--Indemnification."
Amended TOP Partnership Agreement and Transfer of Interests in TMC. In
connection with the execution of the Merger Agreement, Bradley, Tucker and
certain of the limited partners of TOP, including the Management Directors,
agreed to an amendment and restatement of the TOP Partnership Agreement,
which, among other
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things, requires Bradley to register the shares of Bradley Common Stock which
the limited partners may receive upon redemption of TOP Units under the
Securities Act. See "The Merger Agreement--Amended TOP Partnership Agreement."
The shares issuable upon the redemption of outstanding TOP Units have been
registered under the Securities Act in this Joint Proxy Statement/Prospectus.
In addition, the Management Directors faced a conflict of interest during the
negotiation of their environmental indemnity obligations under the Amended TOP
Partnership Agreement. In this regard, it should be noted that these indemnity
obligations were limited in the Amended TOP Partnership Agreement to apply
only to certain third party claims. See "The Merger Agreement--Amended TOP
Partnership Agreement--Environmental Matters." In addition, in connection with
the execution of the Merger Agreement, Kenneth and Richard Tucker have agreed
to transfer their equity interests in TMC to two individuals who are officers
of Bradley for $500 each at or prior to the Effective Time. See "The Merger
Agreement--Transfer of Interests in TMC."
No Ratification. Approval by stockholders of the Merger does not constitute
a ratification of any of the foregoing transactions.
MATERIAL FEDERAL INCOME TAX CONSEQUENCES
The following is a general summary of the material United States federal
income tax consequences of the Merger to Bradley, Tucker and their respective
U.S. stockholders. The following discussion is based upon current provisions
of the Code, existing, temporary and final regulations thereunder and current
administrative rulings and court decisions, all of which are subject to
change, possibly on a retroactive basis. No attempt has been made to comment
on all United States federal income tax consequences of the Merger that may be
relevant to stockholders of Bradley or Tucker. The tax discussion set forth
below is included for general information only. It is not intended to be, nor
should be construed to be, legal or tax advice to a particular stockholder of
Bradley or Tucker.
THE FOLLOWING DISCUSSION MAY NOT APPLY TO PARTICULAR CATEGORIES OF HOLDERS
OF SHARES OF TUCKER COMMON STOCK OR BRADLEY COMMON STOCK SUBJECT TO SPECIAL
TREATMENT UNDER THE CODE, SUCH AS FOREIGN HOLDERS AND HOLDERS WHOSE SHARES
WERE ACQUIRED PURSUANT TO THE EXERCISE OF AN EMPLOYEE STOCK OPTION OR
OTHERWISE AS COMPENSATION. TUCKER AND BRADLEY STOCKHOLDERS ARE URGED TO
CONSULT THEIR TAX ADVISORS TO DETERMINE THE SPECIFIC TAX CONSEQUENCES OF THE
MERGER, INCLUDING ANY STATE, LOCAL OR OTHER TAX CONSEQUENCES OF THE MERGER.
Tax Consequences of the Merger
Mayer, Brown & Platt, counsel for Tucker, has delivered its opinion to
Tucker that, on the basis of facts, representations and assumptions set forth
in such opinion, the Merger will be treated for United States federal income
tax purposes as a reorganization within the meaning of Section 368(a)(1)(A) of
the Code. Accordingly, (i) no gain or loss will be recognized by Tucker as a
result of the Merger, and (ii) no gain or loss will be recognized by a
stockholder of Tucker who receives Bradley Common Stock in exchange for Tucker
Common Stock (except with respect to any cash received in lieu of a fractional
interest in Bradley Common Stock). Goodwin, Procter & Hoar, counsel for
Bradley, has delivered its opinion to Bradley that, on the basis of facts,
representations and assumptions set forth in such opinion, the Merger will be
treated for United States federal income tax purposes as a reorganization
within the meaning of Section 368(a)(1)(A) of the Code. Accordingly, no gain
or loss will be recognized by Bradley as result of the Merger. These opinions
are based, in part, upon a representation by the management of Tucker to the
effect that, to the best knowledge of Tucker's management, there is no plan or
intention on the part of the stockholders of Tucker to dispose of a number of
shares of Bradley Common Stock received in the Merger that would reduce the
Tucker stockholders' ownership of Bradley Common Stock to the number of shares
having a value of less than 50 percent of the value of the Tucker Common Stock
as of the date of the Merger and upon counsel's assumption to the effect that
such representation is correct as if made without such "best knowledge"
qualification. The opinions referred to above have been filed as Exhibits to
this Joint Proxy Statement/Prospectus.
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The aggregate tax basis of the Bradley Common Stock to be received by
stockholders of Tucker in the Merger will be the same as the aggregate tax
basis in the Tucker Common Stock surrendered in exchange therefor (reduced by
any amount allocable to a fractional share interest for which cash is
received), and the holding period of the Bradley Common Stock to be received
by the stockholders of Tucker in the Merger will include the holding period
for the Tucker Common Stock surrendered in exchange therefor, provided that
such Tucker Common Stock is held as a capital asset at the Effective Time.
Cash received in lieu of a fractional share of Bradley Common Stock will be
treated as received in redemption for such fractional interest, and gain or
loss will be recognized, measured by the difference between the amount of cash
received and the portion of the basis of the shares of Tucker Common Stock
allocable to such fractional interest. Such gain or loss will constitute
capital gain or loss from the sale of stock if the stockholder holds its
Tucker Common Stock as a capital asset at the Effective Time, and will be
long-term capital gain or loss if the holding period for such shares of Tucker
Common Stock was greater than one year at the Effective Time.
Pre-Merger Dividend
The Merger Agreement requires that Tucker distribute to its stockholders
immediately prior to the Merger any undistributed "real estate investment
trust taxable income" or "earnings and profits" of Tucker for Tucker's short
taxable year ending with the Merger, plus any amounts necessary for Tucker to
satisfy the REIT distribution requirements for such short taxable year. See
"Risk Factors--Adverse Consequences of Failure to Qualify as a REIT and Other
Tax Risks Relating to Operation of Bradley After the Effective Time." The
Merger Agreement requires that Bradley distribute to its stockholders an
amount per share equal to (i) the amount per share of any pre-Merger dividends
paid by Tucker as described in the preceding sentence divided by (ii) the
Exchange Ratio. Any such distributions of Bradley and Tucker are referred to
herein as "Pre-Merger Dividends." Except as provided below with respect to
Pre-Merger Dividends (if any) designated as capital gain dividends, (i) any
Pre-Merger Dividends made to Tucker's taxable U.S. stockholders out of
Tucker's current or accumulated earnings and profits would be taken into
account by such U.S. stockholders as ordinary income and would not be eligible
for the dividends received deduction generally available for corporations and
(ii) any Pre-Merger Dividends made to Bradley's taxable U.S. stockholders out
of Bradley's current or accumulated earnings and profits also would be taken
into account by such U.S. stockholders as ordinary income and would not be
eligible for the dividends received deduction generally available to
corporations. Any Pre-Merger Dividends in excess of current and accumulated
earnings and profits of Tucker (in the case of any Tucker Pre-Merger
Dividends) or Bradley (in the case of any Bradley Pre-Merger Dividends) would
not be taxable to the stockholder to the extent that such distribution does
not exceed the adjusted basis of the stockholder's stock with respect to which
the distribution is made, but rather would reduce the adjusted basis of such
stock. To the extent that any such Pre-Merger Dividend in excess of earnings
and profits exceeds the adjusted basis of the stockholder's stock, such
distribution would be included in the stockholder's income as long-term
capital gain (or short-term capital gain if the stock has been held for one
year or less) assuming the stockholder holds the stock as a capital asset at
the time of the Merger. Any Pre-Merger Dividends designated as capital gain
dividends will be taxed as long-term capital gains (to the extent they do not
exceed the payor's actual net capital gain for the taxable year), provided
that corporate shareholders may be required to treat up to 20% of certain
capital gain dividends as ordinary income.
Tax Aspects of Bradley's Investment in TOP
Tucker holds substantially all its assets through TOP and TOP's subsidiary
partnerships, and, as a result of the Merger, Bradley will acquire Tucker's
general partner interest in TOP. Bradley's interest in TOP and Bradley's
indirect interests in the subsidiary partnerships of TOP (referred to
collectively as the "Subsidiary Partnerships"), including TFP, involve special
tax considerations, including those described below.
Tax Aspects of the Merger. As a result of the Merger, for federal income tax
purposes TOP and certain of the Subsidiary Partnerships will be deemed to have
liquidated and distributed their assets to their partners immediately after
the Merger (including Bradley). The partners of such partnerships immediately
after the Merger (including Bradley) will be deemed to have contributed the
assets of each such partnership to a new
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partnership. Neither Bradley nor Tucker should recognize income as a result of
such constructive liquidation-contribution. Such constructive liquidation-
contribution may, however, subject Bradley to certain rules which, under
certain circumstances, could require Bradley to recognize a portion of the
gain (or loss) inherent in the Tucker properties (individually and in the
aggregate) at the time of the Merger if TOP or a Subsidiary Partnership
distributes property (other than money) to its partners within the five year
period following the Merger. Such constructive liquidation-contribution could
have additional consequences, such as changes in depreciation methods or
recovery periods, but Tucker and Bradley do not anticipate that such
consequences will be material.
Bradley's Tax Basis in TOP. In general, Bradley's initial adjusted tax basis
in its interest in TOP will be equal to Tucker's adjusted tax basis in
Tucker's interest in TOP immediately prior to the Merger, reduced by any
actual or deemed cash distributions made to Tucker in connection with the
Merger, plus or minus any net increase or decrease, respectively, in Bradley's
share of the liabilities of TOP, as calculated immediately after consummation
of the Merger. In general, after the Merger, Bradley's adjusted tax basis in
TOP will be (i) increased by (a) the amount of any additional capital
contributions made by Bradley to TOP, (b) Bradley's allocable share of TOP's
income, if any, and (c) any further increases in Bradley's allocable share of
the liabilities of TOP and (ii) decreased, but not below zero, by (x)
Bradley's allocable share of losses suffered by TOP, (y) the amount of cash
and the adjusted basis of any property distributed to Bradley and (z) any
decreases in Bradley's share of liabilities of TOP. The tax basis of interests
in the Subsidiary Partnerships will be determined in a similar manner.
Entity Classification. Each of TOP and the Subsidiary Partnerships is
intended to qualify as a partnership (as opposed to an association taxable as
a corporation) for federal income tax purposes. If any of TOP and the
Subsidiary Partnerships were treated as an association, it would be taxable as
a corporation and therefore subject to an entity-level tax on its income. In
such a situation, the character of Bradley's assets and items of income would
change, and Bradley likely would be unable to satisfy the asset and income
requirements for qualification as a REIT following the Merger. In addition,
any change in the status of TOP or a Subsidiary Partnership for tax purposes
might be treated as a taxable event causing Bradley to incur a tax liability
without any related cash distributions. Similarly, classification of TOP or a
Subsidiary Partnership as an association taxable as a corporation for any
period prior to the Merger likely would disqualify Tucker as a REIT. An
organization such as TOP or a Subsidiary Partnership formed as a partnership
under state law will be treated as an association taxable as a corporation for
federal income tax purposes if it has more than two of the four corporate
characteristics that the Treasury Regulations use to distinguish a partnership
from a corporation. These four corporate characteristics are (i) continuity of
life, (ii) centralization of management, (iii) limited liability and (iv) free
transferability of interests. Although neither Bradley nor Tucker has
requested a ruling from the IRS or an opinion of counsel regarding the status
of TOP and the Subsidiary Partnerships as partnerships as of the Merger,
Bradley and Tucker believe that neither TOP nor any of the Subsidiary
Partnerships has possessed or will possess more than two of the four corporate
characteristics and that as a result each such partnership will be treated as
a partnership for federal income tax purposes.
Notwithstanding the status of TOP and the Subsidiary Partnerships as
partnerships rather than associations taxable as corporations, the IRS could
allege that TOP or a Subsidiary Partnership is a "publicly-traded partnership"
under Section 7704 of the Code. If such an assertion were successfully made,
such partnership would be subject to tax as a corporation under the Code
unless certain conditions regarding the nature of its income were satisfied. A
partnership is a publicly-traded partnership if interests in such partnership
are either traded on an established securities market or are "readily tradable
on a secondary market (or the substantial equivalent thereof)." A publicly-
traded partnership is not taxed as a corporation, however, if at least 90% of
its gross income for each taxable year consists of certain passive income,
including interest, dividends, real property rents, and gains from the sale or
other disposition of real property. This exemption is referred to herein as
the "qualifying income exemption."
In 1988, the IRS issued a notice (the "Notice") providing limited safe
harbors from the definition of a publicly-traded partnership in advance of the
issuance of Treasury Regulations. Pursuant to one of those safe harbors (the
"Private Placement Exclusion"), interests in a partnership will not be treated
as readily tradable on
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a secondary market or the substantial equivalent thereof if (i) all of the
partnership interests are issued in a transaction that is not registered under
the Securities Act, and (ii) the partnership does not have more than 500
partners (taking into account as a partner each person who indirectly owns an
interest in the partnership through a partnership, a grantor trust or an S
corporation).
The U.S. Department of the Treasury recently issued final regulations (the
"PTP Regulations") that modify the Private Placement Exclusion under the
Notice in three respects. First, the PTP Regulations provide that the Private
Placement Exclusion applies only if the partnership does not have more than
100 partners at any time during its taxable year. Second, a person who
indirectly owns an interest in the partnership through another partnership, a
grantor trust or an S corporation (each a "flow-through entity") is treated as
a partner of the partnership only if (i) substantially all of the value of
such person's interest in the flow-through entity is attributable to the flow-
through entity's interest in the partnership and (ii) a principal purpose of
the use of the tiered arrangement is to permit the partnership to satisfy the
100 partner limitation. Third, the PTP Regulations provide that the Private
Placement Exclusion will apply only if any interest in the partnership offered
and sold outside the United States would not be subject to registration under
the Securities Act if such interest were sold within the United States. The
PTP Regulations will apply to TOP for taxable years beginning on or after
December 31, 2005 or such earlier time that TOP adds a substantial new line of
business.
Interests in TOP or a Subsidiary Partnership have not been traded on an
established securities market. Moreover, Tucker believes that, for periods
ending on or before the Merger, TOP and each Subsidiary Partnership has
qualified and will qualify for the Private Placement Exclusion under the
Notice and also has not had and will not have more than 100 partners as
determined under the PTP Regulations. In addition, Bradley anticipates that,
following the Merger, TOP and each Subsidiary Partnership will satisfy the
Private Placement Exclusion (as set forth in the Notice or as modified by the
PTP Regulations, whichever applies) and/or will be eligible for the qualifying
income exemption and that none of such partnerships will be treated as a
publicly-traded partnership. There can be no assurance, however, that efforts
to avoid publicly-traded partnership status will be successful.
Tax Aspects of Bradley's Investment in TOP. For purposes of the various REIT
asset and income tests, Bradley will include as part of its assets and income
Bradley's proportionate share (based on Bradley's capital interests in TOP and
the Subsidiary Partnerships) of the assets and items of income, gain, loss and
deduction of TOP and the Subsidiary Partnerships. Bradley will include in the
computation of its taxable income Bradley's allocable share (taking into
account allocations under Section 704(c) of the Code as described below) of
income and loss of TOP and the Subsidiary Partnerships.
Allocations with Respect to Contributed or Revalued Property. Pursuant to
Section 704(c) of the Code, income, gain, loss and deduction attributable to
appreciated or depreciated property that is contributed to a partnership in
exchange for an interest in the partnership must be allocated in a manner such
that for federal income tax purposes the contributing partner is charged with,
or benefits from, respectively, the unrealized gain or unrealized loss
associated with the property at the time of the contribution. The amount of
such unrealized gain or unrealized loss generally equals the difference
between the fair market value of the contributed property at the time of
contribution and the adjusted tax basis of such property at the time of
contribution (a "Book-Tax Difference"). Such allocations are solely for
federal income tax purposes and do not affect the book capital accounts or
other economic or legal arrangements among the partners. Under Treasury
Regulations promulgated under Section 704(b) of the Code, similar rules apply
when a partnership elects to "revalue" its assets in certain situations, such
as when a contribution of property is made to a partnership by a new partner.
As noted above, as a result of the Merger, for federal income tax purposes TOP
will be deemed to have liquidated and distributed its assets to its partners
immediately following the Merger (including Bradley). The partners of TOP
immediately following the Merger (including Bradley) will be treated as
contributing their proportionate share of the assets of TOP (subject to
liabilities) to a new partnership in a transaction governed by Section 704(c)
of the Code. The Amended TOP Partnership Agreement will require that income,
gain, loss and deduction attributable to contributed property with a Book-Tax
Difference must be allocated in accordance with Section 704(c) of the Code.
Such partnership agreement also will contain a similar provision for any Book-
Tax Differences arising from a revaluation of partnership assets, which may
occur in the future.
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Based on the foregoing, in general, if any asset of TOP is determined to
have a fair market value at the time of the Merger which is greater than its
then tax basis (taking into account the constructive liquidation-contribution
described above), certain partners of TOP will be allocated lower amounts of
depreciation deductions for tax purposes by TOP and increased taxable income
and gain on sale. Such allocations will tend to eliminate the Book-Tax
Difference over the life of TOP. However, the special allocation rules of
Section 704(c) of the Code do not always entirely rectify Book-Tax Differences
on an annual basis or with respect to a specific transaction such as a sale.
Thus, Bradley may be allocated lower depreciation and other deductions, and
possibly amounts of taxable income in the event of a sale of such contributed
assets in excess of the economic or book income allocated to it as a result of
such sale. This may cause Bradley to recognize taxable income in excess of
cash proceeds, which might adversely affect Bradley's ability to comply with
the distribution requirements for REITs. Correspondingly, if any asset of TOP
is determined to have a fair market value at the time of the Merger which is
less than its then tax basis (taking into account the constructive
liquidation-contribution described above), certain partners of TOP will be
allocated higher amounts of depreciation deductions for tax purposes and
increased taxable deductions and loss on sale by TOP.
Treasury Regulations under Section 704(c) of the Code were recently issued
in final form providing partnerships with a choice of different methods of
accounting for Book-Tax Differences. Bradley has not yet determined which of
the alternate methods of accounting for Book-Tax Differences will be elected
by TOP. Such determination could have different timing and other effects on
the taxable income of Bradley.
These same rules will govern tax allocations with respect to contributed or
revalued property of the Subsidiary Partnerships following the Merger,
including property deemed contributed to certain of the Subsidiary
Partnerships in connection with the deemed liquidation-contribution with
respect to certain Subsidiary Partnerships resulting from the Merger as
described above.
Qualification of Bradley as a REIT Following the Merger
General. If certain detailed conditions imposed by the REIT provisions of
the Code are met, entities, such as Bradley and Tucker, that invest primarily
in real estate and that otherwise would be treated for federal income tax
purposes as corporations, are generally not taxed at the corporate level on
their "real estate investment trust taxable income" that is currently
distributed to stockholders. This treatment substantially eliminates the
"double taxation" on earnings (i.e., at both the corporate and stockholder
levels) that generally results from the use of corporations. Prior to the
consummation of the Merger, Bradley and Tucker have been and will continue to
be operated in a manner intended to allow each of them to qualify as a REIT.
Bradley intends to operate following the Merger in a manner so that Bradley
will continue to qualify as a REIT. If Bradley fails to qualify as a REIT in
any taxable year, Bradley will be subject to federal income taxation as if it
were a domestic corporation, and Bradley's stockholders will be taxed in the
same manner as stockholders of ordinary corporations. In this event, Bradley
could be subject to potentially significant tax liabilities, and the amount of
cash available for distribution to stockholders would be reduced and possibly
eliminated. Moreover, the liabilities that Bradley will assume in the Merger
will include any unpaid taxes of Tucker, including taxes resulting if Tucker
failed to qualify as REIT, for periods prior to the Merger, which also could
reduce or eliminate cash available for distribution to Bradley's stockholders
following the Merger.
Bradley's qualification and taxation as a REIT following the Merger will
depend upon Bradley's continuing ability to meet, through actual operating
results, the income and asset requirements, distribution levels, diversity of
stock ownership and other requirements for qualification as a REIT under the
Code. Counsel will not review Bradley's compliance with these tests on a
continuing basis. Moreover, qualification as a REIT involves the application
of highly technical and complex Code provisions for which there are only
limited judicial or administrative interpretations and the determination of
various factual matters and circumstances not entirely within Bradley's
control. See "Risk Factors--Adverse Consequences of Failure to Qualify as a
REIT and Other Tax Risks Relating to Operation of Bradley After the Effective
Time." Accordingly, no assurance can be given that Bradley will satisfy such
tests on a continuing basis. Moreover, Bradley's ability to qualify as a REIT
following the Merger will depend on the qualification of Bradley as a REIT for
periods prior to the Merger.
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Bradley's continued qualification as a REIT following the Merger also could
depend on Tucker's qualification as a REIT for periods through the Merger if
the IRS subsequently determined that Tucker had earnings and profits as
determined for federal income tax purposes at the time of the Merger
(notwithstanding the requirement in the Merger Agreement that Tucker
distribute all earnings and profits prior to the Merger) or if former
stockholders of Tucker acquired 50% or more in value of the shares of Bradley
Common Stock as a result of or following the Merger. See "Risk Factors--
Adverse Consequences of Failure to Qualify as a REIT and Other Tax Risks
Relating to Operation of Bradley After the Effective Time."
In connection with the Merger, Goodwin, Procter & Hoar (i) will render an
opinion regarding Bradley's qualification as a REIT for periods prior to the
Merger and (ii) has rendered an opinion regarding Bradley's ability to qualify
as a REIT following the Merger. Goodwin, Procter & Hoar's opinion regarding
Bradley's ability to qualify as a REIT following the Merger has been filed as
an exhibit to this Joint Proxy Statement/Prospectus. Mayer, Brown & Platt will
render an opinion regarding Tucker's qualification as a REIT for the taxable
year ended December 31, 1995 and for the short tax year ending at the date of
the Closing. Coopers & Lybrand L.L.P. will render an opinion regarding
Tucker's qualification as a REIT for the taxable years ended December 31, 1993
and December 31, 1994. Each of the foregoing opinions is based on
representations from management regarding Tucker's and Bradley's compliance
with the requirements for qualification as a REIT and are not binding on the
IRS. Accordingly, no assurance can be given that the IRS could not challenge
the status of Bradley or Tucker as a REIT prior to the Merger or the status of
Bradley as a REIT following the Merger.
Tucker Management Corp. The assets of TOP include 8% of the voting stock and
95% of the non-voting stock of TMC. TMC will not qualify as a REIT or as a
qualified REIT subsidiary and will pay federal, state and local tax on its
taxable income at normal corporate rates. By virtue of Bradley's ownership of
TOP Units following the Merger, Bradley will be considered to own its pro rata
share of the nonvoting and voting stock of TMC owned by TOP. In order for
Bradley to qualify as a REIT (i) the value of TMC stock owned by Bradley
through TOP may not exceed 5% of the value of Bradley's total assets and (ii)
Bradley may not own more than 10% of the voting securities of TMC. In
connection with the consummation of the Merger, Kenneth and Richard Tucker
have agreed to transfer their respective shares in TMC consisting,
collectively, of 5% of the outstanding preferred stock and 92% of the common
stock to two officers of Bradley. As a result, neither Bradley nor TOP will
own more than 8% of the voting securities of TMC. In addition, Bradley does
not believe that Bradley's pro rata share of the value of the securities of
TMC will exceed 5% of the value of the total assets of Bradley.
ACCOUNTING TREATMENT
Bradley will account for the Merger as a purchase in accordance with
Accounting Principles Board Opinion No. 16. Purchase accounting for a
combination is similar to the accounting treatment used in the acquisition of
any asset group. The fair market value of the consideration (cash, stock, debt
securities, etc.) given by the acquiring firm is used as the valuation basis
for the combination. The assets and liabilities of the acquired firm are
revalued to their respective fair market values at the combination date. The
financial statements of the acquiring company reflect the combined operations
from the date of combination.
REGULATORY APPROVAL
Tucker and Bradley believe that the Merger may be consummated without
notification being given or certain information being furnished to the Federal
Trade Commission (the "FTC") or the Antitrust Division of the Department of
Justice (the "Antitrust Division") pursuant to the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended (the "HSR Act"), and that no waiting
period requirements under the HSR Act are applicable to the Merger. However,
there can be no assurance that the consummation of the Merger will not be
delayed by reason of the HSR Act. At any time before or after consummation of
the Merger, the Antitrust Division or the FTC could take such action under the
antitrust laws as it deems necessary or desirable in the public interest,
including seeking to enjoin the consummation of the Merger or seeking
divestiture of substantial assets of Bradley or Tucker. At any time before or
after the Effective Time, any state could take such action
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under its own antitrust laws as it deems necessary or desirable. Such action
could include seeking to enjoin the consummation of the Merger or seeking
divestiture of Tucker or assets of Bradley or Tucker by Bradley. Private
parties may also seek to take legal action under antitrust laws under certain
circumstances.
CERTAIN RESALE RESTRICTIONS
All shares of Bradley Common Stock received by Tucker stockholders in the
Merger will be freely transferable, except that shares of Bradley Common Stock
received by persons who are deemed to be "affiliates" (as such term is defined
under the Securities Act) of Tucker at the time of the Tucker Special Meeting
may be resold by them only in transactions permitted by the resale provision
of Rule 145 promulgated under the Securities Act (or Rule 144 in the case of
such persons who become affiliates of Bradley) or as otherwise permitted under
the Securities Act. Persons who may be deemed to be affiliates of Bradley or
Tucker generally include individuals or entities that control, are controlled
by, or are under common control with, such party and may include certain
officers and directors of such party as well as principal stockholders of such
party. The Merger Agreement requires Tucker to exercise its reasonable best
efforts to cause each of its affiliates to execute a written agreement to the
effect that such person will not offer to sell, transfer or otherwise dispose
of any of the Bradley Common Stock issued to such person in or pursuant to the
Merger unless (i) such sale, transfer or other disposition has been registered
under the Securities Act; (ii) such sale, transfer or other disposition is
made in conformity with Rule 145 under the Securities Act; or (iii) in the
opinion of counsel, which opinion and counsel shall be reasonably satisfactory
to Bradley, such sale, transfer or other disposition is exempt from
registration under the Securities Act.
NEW YORK STOCK EXCHANGE LISTING
It is a condition to Tucker's and Bradley's obligations to consummate the
Merger that Bradley obtain the approval for the listing of the shares of
Bradley Common Stock issuable in the Merger on the NYSE, subject to official
notice of issuance. See "The Merger Agreement--Conditions to the Merger."
DISSENTERS' RIGHTS
Under the MGCL, stockholders of Tucker and Bradley are not entitled to
dissenters' rights in connection with the Merger.
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THE MERGER AGREEMENT
GENERAL
The Merger Agreement provides for a business combination between Bradley and
Tucker in which Tucker would be merged with and into Bradley and the holders
of Tucker Common Stock would be issued shares of Bradley Common Stock in a
transaction intended to qualify as a purchase for accounting purposes and as a
tax-free reorganization for federal income tax purposes. This Joint Proxy
Statement/Prospectus discusses all material terms of the Merger Agreement. The
discussion in this Joint Proxy Statement/Prospectus of the Merger Agreement
and the description of the material terms of the Merger Agreement are subject
to and qualified in their entirety by reference to the Merger Agreement, a
copy of which is attached to this Joint Proxy Statement/Prospectus as Annex A
and which is incorporated herein by reference.
EFFECTIVE TIME OF THE MERGER
In accordance with the MGCL, the Merger will become effective upon the
acceptance for record of the Articles of Merger by the State Department of
Assessments and Taxation of Maryland. Subject to the fulfillment (or waiver)
of the other conditions to the obligations of Bradley and Tucker to consummate
the Merger, it is currently expected that the Merger will be consummated as
soon as practicable following the approval by the stockholders of Bradley and
Tucker of the Merger and the Merger Agreement at their respective Special
Meetings of Stockholders.
EXCHANGE OF TUCKER STOCK CERTIFICATES
Promptly after the Effective Time, Bradley will cause the Exchange Agent to
mail to each holder of record of a Certificate or Certificates (i) a letter of
transmittal which shall specify that delivery shall be effected, and risk of
loss and title to the Certificates shall pass, only upon delivery of the
Certificates to the Exchange Agent and (ii) instructions for use in effecting
the surrender of the Certificates in exchange for certificates representing
shares of Bradley Common Stock and cash in lieu of fractional shares. Upon
surrender of a Certificate for cancellation to the Exchange Agent, together
with such letter of transmittal, duly executed and completed in accordance
with the instructions thereto, the holder of such Certificate will be entitled
to receive in exchange therefor (x) a certificate representing the number of
whole shares of Bradley Common Stock to which such holder shall be entitled,
and (y) a check representing the amount of cash in lieu of fractional shares,
if any, plus the amount of any dividends or distributions, if any, pursuant to
the following paragraph after giving effect to any required withholding tax,
and the Certificate so surrendered will be canceled. TUCKER STOCKHOLDERS
SHOULD NOT SEND IN THEIR CERTIFICATES UNTIL THEY RECEIVE A LETTER OF
TRANSMITTAL.
No dividends or other distributions on Bradley Common Stock will be paid
with respect to any shares of Tucker Common Stock represented by a Certificate
until such Certificate is surrendered for exchange as provided above;
provided, however, that subject to the effect of applicable laws, following
surrender of any such Certificate, there will be paid to the holder of
certificates representing whole shares of Bradley Common Stock issued in
exchange therefor, without interest, (i) at the time of such surrender, the
amount of dividends or other distributions with a record date after the
Effective Time theretofore payable with respect to such whole shares of
Bradley Common Stock and not paid, less the amount of any applicable
withholding taxes which may be required thereon, and (ii) at the appropriate
payment date, the amount of any dividends or other distributions with a record
date after the Effective Time but prior to surrender and a payment date
subsequent to surrender payable with respect to such whole shares of Bradley
Common Stock, less the amount of any applicable withholding taxes which may be
required thereon.
No fractional shares of Bradley Common Stock will be issued in connection
with the Merger. Each holder of Tucker Common Stock otherwise entitled to a
fractional share of Bradley Common Stock will be paid, in lieu thereof, upon
surrender of a Certificate, an amount in cash (without interest), rounded to
the nearest cent, determined by multiplying the Closing Price by the fraction
of a share of Bradley Common Stock which such holder would otherwise be
entitled.
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At and after the Effective Time, there will be no transfers on the stock
transfer books of Tucker of the shares of Tucker Common Stock which were
outstanding immediately prior to the Effective Time.
Any portion of the monies from which cash payments in lieu of fractional
interests in shares of Bradley Common Stock will be made (including the
proceeds of any investments thereof) and any shares of Bradley Common Stock
deposited for the benefit of the holders of shares of Tucker Common Stock that
are unclaimed by the former stockholders of Tucker one year after the
Effective Time will be delivered to the Surviving Company. Any former
stockholders of Tucker who have not complied with the exchange procedures
described above within one year after the Effective Time shall thereafter look
only to the Surviving Company for payment of their shares of Bradley Common
Stock and cash in lieu of fractional shares (plus dividends and distributions
to the extent set forth in the Merger Agreement), as determined pursuant to
the Merger Agreement, without any interest thereon. None of Tucker, Bradley,
the Exchange Agent or any other person will be liable to any former holder of
shares of Tucker Common Stock for any amount properly delivered to a public
official pursuant to applicable abandoned property, escheat or similar laws.
No interest will be paid or accrued on cash in lieu of fractional shares or
on any dividend or distribution, payable to holders of Certificates.
In the event any Certificate has been lost, stolen or destroyed, upon the
making of an affidavit of that fact by the person claiming such Certificate to
be lost, stolen or destroyed and, if required by the Surviving Company, the
posting by such person of a bond in such reasonable amount as the Surviving
Company may direct as indemnity against any claim that may be made against it
with respect to such Certificate, the Exchange Agent or the Surviving Company
will issue in exchange for such lost, stolen or destroyed Certificate the
shares of Bradley Common Stock and cash in lieu of fractional shares (plus, to
the extent applicable, dividends and distributions payable pursuant to the
terms of the Merger Agreement).
At the Effective Time, Tucker's obligations with respect to each outstanding
option to acquire Tucker Common Stock (the "Existing Tucker Options") will be
assumed by Bradley, subject to the provision that the Existing Tucker Options
will continue to have, and be subject to, the same terms and conditions as set
forth in the stock option plans and agreements (as in effect immediately prior
to the Effective Time) pursuant to which such Existing Tucker Options were
issued, except that (i) each option will be exercisable for that number of
whole shares of Bradley Common Stock equal to the product of the number of
shares of Tucker Common Stock covered by such option immediately prior to the
Effective Time multiplied by the Exchange Ratio and rounded to the nearest
whole number of shares of Bradley Common Stock and (ii) the exercise price per
share of Bradley Common Stock under such option will be equal to the exercise
price per share of Tucker Common Stock under the Existing Tucker Option
divided by the Exchange Ratio and rounded to the nearest cent.
CONDITIONS TO THE MERGER
The respective obligations of Bradley and Tucker to effect the Merger and
the other transactions contemplated in the Merger Agreement are subject to the
fulfillment or waiver of each of the following conditions at or prior to the
Effective Time: (i) the Merger and the Merger Agreement shall have been
approved by the requisite vote of stockholders of Tucker and Bradley; (ii) the
waiting period applicable to the consummation of the Merger under the HSR Act,
if applicable, shall have expired or been terminated; (iii) neither Bradley
nor Tucker shall be subject to any order, ruling or injunction of a court of
competent jurisdiction which prohibits the consummation of the transactions
contemplated by the Merger Agreement; (iv) the Registration Statement shall
have been declared effective by the Commission under the Securities Act, and
no stop order suspending the effectiveness of the Registration Statement shall
have been issued by the Commission and no proceedings for that purpose shall
have been initiated or, to the knowledge of Bradley or Tucker, threatened by
the Commission; (v) Bradley shall have obtained the approval for the listing
of the shares of Bradley Common Stock issuable in the Merger on the NYSE,
subject to official notice of issuance; and (vi) all consents, authorizations,
orders and approvals of (or filings or registrations with) any governmental
commission, board, other regulatory body or third parties required to be made
or obtained in connection with the execution, delivery
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and performance of the Merger Agreement and the ancillary agreements to the
Merger Agreement shall have been obtained or made (except where the failure to
obtain or make any such consent, authorization, order, approval, filing or
registration would not have a Tucker Material Adverse Effect (as defined
below) or a Bradley Material Adverse Effect (as defined below), as the case
may be) including, without limitation, the Tucker REMIC Consent and the
consent of each of the lenders under Bradley's and Tucker's credit agreements.
The obligations of each of Tucker and Bradley to effect the Merger are also
subject to the fulfillment or waiver by the other party, at or prior to the
Closing Date, of the following conditions: (i) the representations and
warranties of the other party contained in the Merger Agreement shall be true
and correct in all material respects as of the Effective Time; (ii) the other
party shall have performed or complied in all material respects with all
agreements and covenants required by the Merger Agreement to be performed or
complied with by it on or prior to the Effective Time; and (iii) each party
shall have received the opinion of its tax counsel, dated not less than five
business days prior to the date the Registration Statement is declared
effective by the Commission, to the effect that the Merger will be treated for
federal income tax purposes as a tax-free reorganization qualifying under the
provisions of Section 368(a)(1)(A) of the Code, which opinion shall not have
been withdrawn or modified in any material respect.
The obligation of Tucker to effect the Merger and the other transactions
contemplated therein is also subject to the fulfillment or waiver of the
following conditions at or prior to the Effective Time: (i) Tucker shall have
received an opinion from Goodwin, Procter & Hoar, or another nationally
recognized law firm selected by Bradley, to the effect that, for all
applicable tax years for which Bradley's federal income tax returns are
subject to audit and Bradley is subject to assessment for taxes reportable
therein and through the Closing Date, Bradley has qualified to be taxed as a
REIT under Sections 856 through 860 of the Code and (ii) from the date of the
Merger Agreement through the Effective Time, there shall not have occurred any
change concerning Bradley or any of its subsidiaries that has had or could be
reasonably likely to have a material adverse effect on the business, results
of operations or financial condition of Bradley and its subsidiaries taken as
a whole (a "Bradley Material Adverse Effect").
The obligation of Bradley to effect the Merger is also subject to the
fulfillment or waiver at or prior to the Closing Date of the following
conditions: (a) at the closing of the Merger, Bradley shall have received (i)
the opinion of Mayer, Brown & Platt, or another nationally recognized law firm
selected by Tucker, to the effect that, for the taxable year ended December
31, 1995 and for the short taxable year ending on the Closing Date, Tucker has
qualified to be taxed as a REIT under Sections 856 through 860 of the Code and
(ii) the opinion of Coopers & Lybrand L.L.P., independent public accountants
for Tucker, to the effect that for the taxable years ended December 31, 1993
and December 31, 1994, Tucker qualified to be taxed as a REIT under Sections
856 through 860 of the Code; (b) from the date of the Merger Agreement through
the Effective Time, there shall not have occurred any change concerning Tucker
or any of its subsidiaries, that has had or could be reasonably likely to have
a material adverse effect on the business, results of operations or financial
condition of Tucker and its subsidiaries taken as a whole (a "Tucker Material
Adverse Effect"); (c) Tucker shall have obtained and delivered to Bradley
estoppel certificates, dated no earlier than 45 days prior to the Effective
Time, with respect to (i) certain leases and agreements set forth in a
schedule to the Merger Agreement and (ii) leases representing a total of 50%
of the total rented space of each Tucker property, other than rented space
represented by the leases listed in the schedule referred to in (c)(i) above;
(d) Tucker and all of the limited partners of TOP shall have executed the
Amended TOP Partnership Agreement (see "--Amended TOP Partnership Agreement"),
and Kenneth and Richard Tucker shall have transferred all of their respective
equity interests in TMC to certain officers of Bradley; (e) Bradley shall have
obtained a letter from Coopers & Lybrand L.L.P., independent public
accountants for Tucker, certifying, among other things, that for federal
income tax purposes, Tucker will not have any accumulated or current earnings
or profits immediately prior to the Effective Time; and (f) Bradley shall have
received a private letter ruling from the IRS, in form and substance
reasonably satisfactory to Bradley, to the effect that following the
consummation of the Merger, each of TFC and TPI will qualify as a "qualified
REIT subsidiary" of Bradley under Section 856(i) of the Code.
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REPRESENTATIONS AND WARRANTIES
The Merger Agreement contains various representations and warranties
relating to, among other things: (i) the due organization, power, authority
and standing of Bradley and Tucker and similar corporate matters; (ii) the
authorization, execution, delivery and enforceability of the Merger Agreement;
(iii) the capital structure of Bradley and Tucker; (iv) subsidiaries of
Bradley and Tucker; (v) investment interests of Bradley and Tucker; (vi)
conflicts under charters or bylaws, violations of any instruments and required
consents or approvals; (vii) certain documents filed by each of Bradley and
Tucker with the Commission and the accuracy of information contained therein;
(viii) litigation; (ix) conduct of business in the ordinary course and the
absence of certain changes or material adverse effects; (x) taxes; (xi) books
and records; (xii) properties; (xiii) leases; (xiv) Tucker rents; (xv)
environmental matters; (xvi) employee benefit plans; (xvii) labor matters;
(xviii) brokers' and finders' fees with respect to the Merger; (xix) receipt
of fairness opinions; (xx) ownership of the capital stock in the other
company; (xxi) related party transactions; (xxii) contracts and commitments;
and (xxiii) the issuance of shares of Bradley Common Stock in the Merger.
CERTAIN COVENANTS
Except as specifically permitted by the Merger Agreement or upon written
consent of the other party, Bradley and Tucker have each agreed, among other
things, that it will, prior to the Effective Time: (i) use its reasonable best
efforts, and cause its subsidiaries to use their reasonable best efforts, to
preserve intact its business organization and goodwill and keep available the
services of its officers and employees; (ii) confer on a regular basis with
one or more representatives of the other to report operational matters of
materiality, subject to certain exceptions, and any proposals to engage in
material transactions; (iii) promptly notify the other of any material
emergency or other material change in the condition (financial or otherwise),
business, properties, assets, liabilities, prospects or the normal course of
its business or in the operation of its properties, any material governmental
complaints, investigations or hearings (or communications indicating that the
same may be contemplated), or the breach in any material respect of any
representation or warranty contained in the Merger Agreement; and (iv)
promptly deliver to the other true and correct copies of any report, statement
or schedule filed with the Commission subsequent to the date of the Merger
Agreement.
Unless Bradley has consented as provided in the Merger Agreement, Tucker has
agreed that, among other things, prior to the Effective Time, it (i) shall,
and shall cause each of its subsidiaries to, conduct its operations according
to its usual, regular and ordinary course in substantially the same manner as
previously conducted, subject to clauses (ii)-(xii) below; (ii) shall not, and
shall cause each of its subsidiaries not to, acquire, enter into an option to
acquire or exercise an option or contract to acquire additional real property,
incur additional indebtedness, encumber assets or commence construction of, or
enter into any agreement or commitment to develop or construct, shopping
centers or any other type of real estate projects, except that (A) Tucker may
incur additional indebtedness under the Amended and Restated Revolving Credit
Agreement dated as of June 27, 1994 among TOP, Tucker and The First National
Bank of Boston as agent and (B) Tucker may extend the maturity of the current
mortgage financing encumbering the Pavilion at Mequon until June 30, 1996 upon
the same terms and conditions which are currently in effect for such
financing; (iii) shall not amend the Tucker Charter or the Tucker Bylaws, and
shall cause each of its subsidiaries not to amend its charter, bylaws, joint
venture documents, partnership agreements or equivalent documents except as
contemplated by the Merger Agreement; (iv) shall not (A) except pursuant to
the exercise of options, warrants, conversion rights and other contractual
rights existing on the date of the Merger Agreement and disclosed pursuant to
the Merger Agreement, issue any shares of its capital stock, effect any stock
split, reverse stock split, stock dividend, recapitalization or other similar
transaction, (B) grant, confer or award any option, warrant, conversion right
or other right not existing on the date of the Merger Agreement to acquire any
shares of its capital stock, (C) increase any compensation or enter into or
amend any employment agreement with any of its present or future officers or
directors, or (D) adopt any new employee benefit plan (including any stock
option, stock benefit or stock purchase plan), other than the Severance Plan
and the agreements between Tucker and each of Kenneth Tucker, Richard Tucker,
Harold Eisenberg, Norris Eber, Lawrence Tucker and William Karnes
(collectively, the "Severance Agreements"), or amend any existing employee
benefit plan in any material respect, except for changes which are less
favorable to
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participants in such plans (in connection with the foregoing, Tucker has
agreed that (x) the aggregate payments which may be paid after the date of the
Merger Agreement under the Tucker Property Manager Bonus Program shall not
exceed $150,000 and (y) Tucker shall award a maximum of $25,000 as bonus
compensation for employees who are not executive officers at or immediately
prior to the Effective Time); (v) shall not (A) declare, set aside or pay any
dividend or make any other distribution or payment with respect to any shares
of its capital stock, except a dividend not to exceed $.25 per share of Tucker
Common Stock for the fourth quarter of 1995 and thereafter until the Effective
Time and payment of the Pre-Merger Dividend, if necessary, or (B) except in
connection with the use of shares of capital stock to pay the exercise price
or tax withholding obligations in connection with the Tucker Stock Option
Plan, directly or indirectly redeem, purchase or otherwise acquire any shares
of its capital stock or capital stock of any of its subsidiaries, or make any
commitment for any such action; (vi) shall not, and shall not permit any of
its subsidiaries to, sell, lease or otherwise dispose of (A) any Tucker
properties or any portion thereof or any of the capital stock of or
partnership or other interests in any of its subsidiaries or (B) except in the
ordinary course of business, any of its other assets which are material,
individually or in the aggregate; (vii) shall not, and shall not permit any of
its subsidiaries to, make any loans, advances or capital contributions to, or
investments in, any other person; (viii) shall not, and shall not permit any
of its subsidiaries to, pay, discharge or satisfy any claims, liabilities or
obligations (absolute, accrued, asserted or unasserted, contingent or
otherwise), other than the payment, discharge or satisfaction, in the ordinary
course of business consistent with past practice or in accordance with their
terms, of liabilities reflected or reserved against in, or contemplated by,
the most recent consolidated financial statements (or the notes thereto) of
Tucker included in Tucker's filings with the Commission as of the date of the
Merger Agreement or incurred in the ordinary course of business consistent
with past practice; (ix) shall not, and shall not permit any of its
subsidiaries, subject to certain exceptions set forth in the Merger Agreement,
to enter into any material commitment, contractual obligation, borrowing,
capital expenditure or transaction (each, a "Commitment") which may result in
total payments or liability by or to it in excess of $25,000; (x) except for
the Severance Plan and the Severance Agreements, shall not, and shall not
permit any of its subsidiaries to, enter into any Commitment with any officer,
director, consultant or affiliate of Tucker or any of its subsidiaries; (xi)
shall provide Bradley with a reasonable opportunity to review and comment on
any federal income tax returns filed by Tucker or any of its subsidiaries
prior to the Effective Time; and (xii) shall not, without prior notification
and consultation with Bradley, terminate any employee under circumstances
which would result in severance payments to such employee pursuant to the
Severance Plan or pay any severance benefits to any employee under the terms
of the Severance Plan on account of such employee's purported termination for
"Good Reason" (within the meaning of the Severance Plan) on account of a
substantial adverse change in his position, authorities, responsibilities or
status.
Tucker and Bradley have agreed (a) to use all reasonable best efforts to
cooperate with one another in (i) determining which filings are required to be
made prior to the Effective Time with, and which consents, approvals, permits
or authorizations are required to be obtained prior to the Effective Time
from, governmental or regulatory authorities of the United States, the several
states and foreign jurisdictions and any third parties in connection with the
execution and delivery of the Merger Agreement, the ancillary agreements to
the Merger Agreement and the consummation of the transactions contemplated
thereby and (ii) timely making all such filings and timely seeking all such
consents, approvals, permits or authorizations; (b) to use all reasonable best
efforts to obtain in writing any consents required from third parties to
effectuate the Merger, such consents to be in reasonably satisfactory form to
Tucker and Bradley; and (c) to use all reasonable efforts to take, or cause to
be taken, all other action and do, or cause to be done, all other things
necessary, proper or appropriate to consummate and make effective the
transactions contemplated by the Merger Agreement and the ancillary
agreements.
Tucker has agreed to use its reasonable best efforts to deliver or cause to
be delivered to Bradley, prior to the Closing Date, certain letters from
"affiliates," as defined under Rule 145 promulgated under the Securities Act.
See "The Merger--Certain Resale Restrictions." Bradley has agreed to file the
reports required to be filed by it under the Exchange Act and the rules and
regulations adopted by the Commission thereunder, and to take such further
action as any affiliate of Tucker may reasonably request, all to the extent
required from time to time to enable such affiliate to sell shares of Bradley
Common Stock received by such affiliate in the Merger without
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registration under the Securities Act pursuant to Rule 145(d)(1) or any
successor rule or regulation subsequently adopted by the Commission.
Tucker and Bradley have agreed that, from and after the date of the Merger
Agreement until the Effective Time, neither Tucker nor Bradley, nor any of
their respective subsidiaries or other affiliates will (i) knowingly take any
action, or knowingly fail to take any action, that would jeopardize the
qualification of the Merger as a reorganization within the meaning of Section
368(a) of the Code or (ii) enter into any contract, agreement, commitment or
arrangement with respect to the foregoing.
TERMINATION
The Merger Agreement may be terminated and abandoned at any time prior to
the Effective Time, whether before or after approval of the Merger and the
Merger Agreement, by the stockholders of Tucker and Bradley, in a number of
circumstances, including, among others: (a) by the mutual written consent of
Tucker and Bradley; (b) by either Tucker or Bradley if (i) any United States
federal or state court of competent jurisdiction or other governmental entity
shall have issued an order, decree or ruling or taken any other action
permanently restraining, enjoining or otherwise prohibiting the Merger and
such order, decree, ruling or other action shall have become final and
nonappealable, provided that the party seeking to terminate shall have used
its best efforts to appeal such order, decree, ruling or other action, (ii)
the Merger Agreement and the transactions contemplated thereby shall have
failed to receive the requisite vote for approval by the stockholders of
Bradley or Tucker upon the holding of a duly convened stockholder meeting, or
(iii) the Merger shall not have been consummated on or before June 30, 1996
(other than due to the failure of the party seeking to terminate the Merger
Agreement to perform its obligations under the Merger Agreement required to be
performed by it at or prior to the Effective Time); (c) by action of Tucker if
(i) any representation, warranty, covenant or agreement of Bradley set forth
in the Merger Agreement has been breached or become untrue, as the case may
be, and is incapable of being satisfied by June 30, 1996, provided, however,
that, in any case, a willful breach shall be deemed to be incapable of being
satisfied for the purposes of this provision (c)(i), (ii) the Board of
Directors of Tucker recommends to Tucker's stockholders approval or acceptance
of an Acquisition Proposal (as defined below in "--No Solicitation of
Transactions") by a person other than Bradley, but only in the event that the
Board of Directors of Tucker, after consultation with and based upon the
advice of Mayer, Brown & Platt or another nationally recognized law firm, has
determined in good faith that such action is necessary for the Board of
Directors of Tucker to comply with its fiduciary duties to its stockholders
under applicable law, (iii) the Board of Directors of Bradley fails to make,
withdraws, amends, modifies or changes its approval or recommendation of the
Merger Agreement or the Merger, or (iv) the Board of Directors of Bradley
recommends to Bradley's stockholders approval or acceptance of a proposal by a
person other than Tucker to acquire 50% or more of the assets or stock of
Bradley, by way of merger, tender offer, exchange offer or similar
transaction; or (d) by action of Bradley if (i) any representation, warranty,
covenant or agreement of Tucker set forth in the Merger Agreement has been
breached or become untrue, as the case may be, and is incapable of being
satisfied by June 30, 1996, provided, however, that, in any case, a willful
breach shall be deemed to be incapable of being satisfied for the purposes of
this provision (d)(i), (ii) the Board of Directors of Tucker fails to make,
withdraws, amends, modifies or changes its approval or recommendation of the
Merger Agreement or any of the transactions contemplated thereby, (iii) Tucker
fails as soon as practicable to mail this Joint Proxy Statement/Prospectus to
its stockholders or to include the recommendation of its Board of Directors of
the Merger Agreement and the transactions contemplated thereby in this Joint
Proxy Statement/Prospectus, (iv) the Board of Directors of Tucker shall have
recommended that stockholders of Tucker accept or approve an Acquisition
Proposal by a person other than Bradley, or (v) Tucker or its Board of
Directors shall have resolved to do any of the events set forth in (d)(ii),
(d)(iii) or (d)(iv) above.
TERMINATION AMOUNT AND EXPENSES
If (a) Bradley terminates the Merger Agreement because (i) the Board of
Directors of Tucker has recommended that stockholders of Tucker accept or
approve an Acquisition Proposal by a person other than Bradley (or Tucker or
its Board has resolved to do such), or (ii) any representation, warranty,
covenant or
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agreement on the part of Tucker set forth in the Merger Agreement has been
willfully breached; or (b) Tucker terminates the Merger Agreement because the
Board of Directors of Tucker, after consultation with and based upon the
advice of Mayer, Brown & Platt or another nationally recognized law firm, has
determined in good faith that its fiduciary duties to its stockholders under
applicable law require it to recommend to its stockholders approval or
acceptance of an Acquisition Proposal by a person other than Bradley, then
Tucker shall pay to Bradley the Termination Amount in cash equal to the sum of
$3,000,000 plus Bradley's out-of-pocket costs and expenses in connection with
the Merger Agreement and the transactions contemplated thereby, up to
$2,000,000.
If Bradley terminates the Merger Agreement because (i) the Board of
Directors of Tucker has failed to make, or has withdrawn, amended, modified or
changed its approval or recommendation of the Merger Agreement or any of the
transactions contemplated thereby; (ii) Tucker has failed as soon as
practicable to mail this Joint Proxy Statement/Prospectus to its stockholders
or to include the recommendation of its Board of Directors of the Merger
Agreement and the transactions contemplated thereby in this Joint Proxy
Statement/Prospectus; (iii) Tucker or its Board of Directors has resolved to
do either (i) or (ii) above; or (iv) any representation, warranty, covenant or
agreement on the part of Tucker set forth in the Merger Agreement has been
breached or become untrue, as the case may be, and is incapable of being
satisfied by June 30, 1996 (except for a termination because of a willful
breach by Tucker in which case the previous paragraph will apply), Tucker
shall pay all of Bradley's Expenses in connection with the Merger Agreement
and the transactions contemplated thereby, up to $2,000,000.
If at any time prior to or within one year after termination of the Merger
Agreement, unless such termination was (i) pursuant to mutual written consent
of Bradley and Tucker; (ii) by either Bradley or Tucker because of a United
States federal or state court of competent jurisdiction or other governmental
entity issuing a final and nonappealable order, decree or ruling or taking any
other final and nonappealable action permanently enjoining, restraining or
otherwise prohibiting the Merger (provided that the party seeking to terminate
shall have used its best efforts to appeal such order, decree, ruling or other
action); (iii) by Tucker because any representation, warranty, covenant or
agreement of Bradley set forth in the Merger Agreement has been breached or
become untrue, as the case may be, and is incapable of being satisfied by June
30, 1996; (iv) by either Bradley or Tucker because the Merger Agreement and
the transactions contemplated thereby failed to receive the requisite vote for
approval by the stockholders of Bradley or Tucker upon the holding of a duly
convened stockholder meeting; (v) by Tucker because the Board of Directors of
Bradley failed to make, withdrew, modified or changed its approval or
recommendation of the Merger Agreement or the Merger; (vi) by Tucker because
the Board of Directors of Bradley recommended to Bradley's stockholders that
they approve or accept a proposal by a person other than Tucker to acquire 50%
or more of the assets or stock of Bradley, by way of merger, tender offer,
exchange offer or similar transaction; or (vii) by either Tucker or Bradley
because the Merger was not consummated on or before June 30, 1996 (other than
due to the failure of the party seeking to terminate the Merger Agreement to
perform its obligations under the Merger Agreement required to be performed by
it at or prior to the Effective Time), Tucker enters into an agreement
relating to an Acquisition Proposal with a person other than Bradley or
Tucker's Board of Directors recommends or resolves to recommend to Tucker's
stockholders approval or acceptance of an Acquisition Proposal with a person
other than Bradley, then, upon the entry into such agreement or the making of
such recommendation or resolution, Tucker shall pay to Bradley the Termination
Amount, which amount shall be reduced by any monies previously paid by Tucker
to Bradley pursuant to the previous paragraphs.
The Merger Agreement provides that Tucker shall not, at any time prior to or
within one year after termination of the Merger Agreement, enter into any
agreement relating to an Acquisition Proposal with a person other than Bradley
unless such agreement provides that such person shall, upon the execution of
such agreement, pay any Termination Amount due Bradley under the Merger
Agreement.
The Merger Agreement also provides that Bradley's right to payment of the
Expenses and/or Termination Amount shall be in addition to any other rights or
remedies under contract, at law or in equity to which Bradley may be entitled.
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<PAGE>
Except as otherwise provided in the Merger Agreement, Bradley and Tucker
have agreed that all costs and expenses incurred in connection with the Merger
Agreement and the transactions contemplated thereby shall be paid by the party
incurring such expenses, except that (i) the filing fee in connection with the
HSR Act filing, if any; (ii) the filing fee in connection with the filing of
this Joint Proxy Statement/Prospectus or the Registration Statement with the
Commission; and (iii) the expenses incurred for printing and mailing the
Registration Statement shall be shared equally by Tucker and Bradley. Bradley
and Tucker have also agreed that all costs and expenses for professional
services rendered pursuant to the transactions contemplated by the Merger
Agreement including, but not limited to, investment banking and legal
services, will be paid by each party incurring such services.
REDUCTION OF TERMINATION AMOUNT OR EXPENSES
In general, under the REIT provisions of the Code at least 75% of a REIT's
gross income for each taxable year must consist of defined types of income
derived directly or indirectly for investments relating to real property (the
"75% income test"), and at least 95% of the REIT's gross income for each
taxable year must be derived from such real property investments and from
certain categories of investment income (the "95% income test"). The Merger
Agreement provides in effect for a reduction in the Termination Amount and/or
Expenses payable to Bradley if necessary to prevent such amounts from causing
Bradley to fail these REIT income requirements. Specifically, the Merger
Agreement provides that, notwithstanding anything to the contrary set forth in
the Merger Agreement, in the event that Tucker is obligated to pay Bradley the
Termination Amount and/or Expenses, Tucker (or any other person to the extent
provided in the Merger Agreement) shall pay to Bradley from the applicable
Termination Amount and/or Expenses, as the case may be, an amount equal to the
lesser of (m) the Termination Amount and/or Expenses, as the case may be, and
(n) the sum of (1) the maximum amount that can be paid to Bradley without
causing Bradley to fail to meet the requirements of the 75% and 95% income
tests determined as if the Termination Amount did not constitute qualifying
income for purposes of the 75% and 95% income tests ("Qualifying Income"),
plus (2) in the event Bradley receives either a ruling from the IRS or an
opinion from Bradley's counsel that the Termination Amount and/or Expenses
would constitute Qualifying Income or would be excluded from gross income for
purposes of the 75% and 95% income tests, an amount equal to the Termination
Amount and/or Expenses, as the case may be, less the amount payable under
clause (1) above.
NO SOLICITATION OF TRANSACTIONS
Unless and until the Merger Agreement has been terminated in accordance with
its terms, Tucker has agreed and covenanted that neither it nor any of its
subsidiaries will, and each of them will direct and use its best efforts to
cause its respective officers, directors, employees, agents and
representatives not to, directly or indirectly, initiate, solicit or encourage
any inquiries or the making or implementation of any proposal or offer
(including, without limitation, any proposal or offer to its stockholders)
with respect to a merger, acquisition, tender offer, exchange offer,
consolidation or similar transaction involving, or any purchase of 10% or more
of the assets or any equity securities or partnership interests (including,
without limitation, TOP Units) of, Tucker or any of its subsidiaries, other
than the transactions contemplated by the Merger Agreement (any such proposal
or offer being herein referred to as an "Acquisition Proposal") or engage in
any negotiations concerning, or provide any confidential information or data
to, or have any discussions with, any person relating to an Acquisition
Proposal, or otherwise facilitate any effort or attempt to make or implement
an Acquisition Proposal. In connection with the Merger Agreement, Tucker
agreed to immediately cease and cause to be terminated any existing
activities, discussions or negotiations with any parties conducted prior to
the date of the Merger Agreement with respect to any of the foregoing and to
take the necessary steps to inform the individuals or entities referred to
above of these obligations. Tucker has also agreed to notify Bradley
immediately if any such inquiries or proposals are received by, any such
information is requested from, or any such negotiations or discussions are
sought to be initiated or continued with it; provided, however, that the Board
of Directors of Tucker may (a) furnish information to or enter into
discussions or negotiations with any person or entity that makes an
unsolicited bona fide Acquisition Proposal, if, and only to the extent that,
(i) the Board of Directors of Tucker, after consultation with and based upon
the advice of Mayer, Brown & Platt or another nationally recognized law firm,
determines in good faith that such action is required for the Board of
Directors to comply with its fiduciary duties to stockholders under applicable
law, (ii) prior to furnishing such information to, or entering into
discussions or
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<PAGE>
negotiations with, such person or entity, Tucker provides written notice to
Bradley to the effect that it is furnishing information to, or entering into
discussions or negotiations with, such person or entity, and (iii) Tucker
keeps Bradley informed of the status of any such discussions or negotiations;
and (b) to the extent applicable, complies with Rule 14e-2 and Rule 14a-9
promulgated under the Exchange Act with regard to an Acquisition Proposal.
INDEMNIFICATION
Bradley has agreed that all rights to indemnification or exculpation
existing in favor of the directors, officers, employees, advisors and agents
of Tucker and each of its subsidiaries as provided in their respective
charters or bylaws in effect as of the date of the Merger Agreement with
respect to matters occurring at or prior to the Effective Time will survive
the Merger and will continue in full force and effect. For a period of six
years after the Effective Time, Bradley has agreed not to amend, repeal or
otherwise modify the provisions in the Bradley Charter and the Bradley Bylaws
providing for exculpation of director liability and indemnification in any
manner that would materially and adversely affect the rights thereunder of
individuals who at any time prior to the Effective Time were directors,
officers, employees, advisors or agents of Tucker with respect to actions or
omissions occurring at or prior to the Effective Time (including, without
limitation, the transactions contemplated by the Merger Agreement), unless
such modification is required by law; provided, however, that in the event any
claim or claims are asserted or made either prior to the Effective Time or
within such six year period, all rights to indemnification in respect of any
such claim or claims will continue until disposition of any and all such
claims.
In addition to the rights provided above, in the event of any threatened or
actual claim, action, suit, proceeding or investigation, whether civil,
criminal or administrative, including, without limitation, any action by or on
behalf of any or all security holders of Tucker or Bradley or by or in the
right of Tucker or Bradley or any claim, action, suit, proceeding or
investigation in which any person who is now, or has been, at any time prior
to the date hereof, or who becomes prior to the Effective Time, a director of
Tucker (the "Indemnified Parties"), is, or is threatened to be, made a party
based in whole or in part on, or arising in whole or in part out of, or
pertaining to (i) the fact that he is or was a director of Tucker or any of
the subsidiaries of Tucker or any action or omission by such person in his
capacity as a director or (ii) the Merger Agreement or the transactions
contemplated by the Merger Agreement, whether in any case asserted or arising
before or after the Effective Time, Bradley, on the one hand, and the
Indemnified Parties, on the other hand, have agreed to cooperate and use their
reasonable best efforts to defend against and respond thereto. Bradley has
agreed that, after the Effective Time, it will indemnify and hold harmless, as
and to the full extent permitted by applicable law, each Indemnified Party
against any losses, claims, liabilities, expenses (including reasonable
attorneys' fees and expenses), judgments, fines and amounts paid in settlement
in connection with any such threatened or actual claim, action, suit,
proceeding or investigation. In addition, after the Effective Time, in the
event of any such threatened or actual claim, action, suit, proceeding or
investigation, Bradley has agreed to promptly pay and advance expenses and
costs incurred by each Indemnified Person as they become due and payable in
advance of the final disposition of any claim, action, suit, proceeding or
investigation to the fullest extent and in the manner permitted by law.
Bradley has also agreed to purchase, at or prior to the Effective Time,
liability insurance coverage for Tucker's directors and certain of its
officers for a period of six years which will provide the directors and
officers with $10,000,000 of aggregate coverage. In addition, the Tucker
directors have agreed, at Bradley's request, to adopt certain amendments to
Tucker's existing indemnification agreements with its directors including the
deletion of any obligation of the Surviving Company to establish a trust fund
for the payment of indemnification expenses upon a change in control.
AMENDMENTS
Bradley and Tucker may amend the Merger Agreement by written agreement at
any time before or after approval of matters presented in connection with the
Merger by the stockholders of Bradley and Tucker, but after any such
stockholder approval, no amendment shall be made which by law requires the
further approval of stockholders without obtaining such further approval.
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AMENDED TOP PARTNERSHIP AGREEMENT
Tucker holds substantially all of its assets through TOP and TFP. In
connection with the consummation of the Merger, (i) Bradley will acquire 95.9%
of the partnership interests in TOP, comprising 10,828,283 TOP Units which are
currently held by Tucker and (ii) the TOP Partnership Agreement will be
amended and restated in the form of the Amended TOP Partnership Agreement set
forth as Exhibit A to the Merger Agreement. The remaining partnership
interests in TOP are held by the Management Directors (427,329 TOP Units or
approximately 3.8%) and certain family members and family trusts related to
the Management Directors (31,478 TOP Units or approximately 0.3%). The
following summary of the Amended TOP Partnership Agreement, including the
descriptions of certain provisions set forth elsewhere in this Joint Proxy
Statement/Prospectus, is qualified in its entirety by reference to the Amended
TOP Partnership Agreement, which is filed as an exhibit to the Registration
Statement of which this Joint Proxy Statement/Prospectus is a part.
The Amended TOP Partnership Agreement provides that management and control
of TOP will be vested in Bradley, which will serve as the sole general partner
of TOP. Equity ownership in TOP will be represented by the TOP Units. As
described in more detail below, each TOP Unit, other than those held by
Bradley, is designed to provide distributions to the holder thereof that are
equal to the distributions paid on each share of Bradley Common Stock, and
each such TOP Unit is redeemable for the cash equivalent of one share of
Bradley Common Stock (subject to certain restrictions), or, at Bradley's
option, one share of Bradley Common Stock. Effective upon consummation of the
Merger, each holder of TOP Units will exchange its pre-Merger TOP Units for a
number of new TOP Units determined by multiplying (a) the number of TOP Units
held by such unitholder prior to the Effective Time by (b) the Exchange Ratio.
Therefore, assuming each TOP Unit following the Merger has the same value as a
share of Bradley Common Stock, the current TOP Unitholders will receive an
equal value for each TOP Unit as the stockholders of Tucker will receive for
each share of Tucker Common Stock. Notwithstanding the similarities of Bradley
Common Stock and TOP Units, there are certain differences between them,
including the following:
Voting Rights. Holders of Bradley Common Stock may elect the Board of
Directors of Bradley, which because Bradley will be the sole general partner
of TOP, will control the business of TOP upon consummation of the Merger.
Under the Amended TOP Partnership Agreement, Bradley as general partner may
take any action in a manner which it reasonably believes is in the best
interests of the Bradley stockholders or complies with the REIT requirements
for Bradley. Holders of TOP Units may not elect directors, or elect or remove
Bradley as the general partner of TOP. For a period of 24 months after the
Effective Time, the general partner may not elect to dissolve the partnership
or sell all or substantially all of the assets of the partnership without the
consent of a majority in interest of the limited partners, except in
connection with a merger or other business combination of the general partner
or its affiliates. The limited partners have agreed to relinquish any other
voting rights currently available in the TOP Partnership Agreement.
Transferability. The shares of Bradley Common Stock exchanged in the Merger
will be freely transferable under the Securities Act by holders who are not
affiliates of Bradley or Tucker. The TOP Units are freely transferable (i)
either by will, the laws of intestacy or otherwise to the legal representative
or successor of the transferring limited partner who shall be bound in all
respects by the terms of the Amended TOP Partnership Agreement; (ii) for inter
vivos transfers for estate planning purposes; or (iii) for pledges to secure
the repayment of a loan. Other transfers are subject to the consent and
approval of the general partner. Pursuant to the Amended TOP Partnership
Agreement, the general partner may, in its sole and absolute discretion,
transfer its interest in TOP; provided, however, that for a period of 24
months after the Effective Time, the general partner shall not without the
consent of the majority of the limited partners, transfer its interest to any
of its affiliates other than an affiliate whose securities will become
issuable upon redemption of the TOP Units. Under the TOP Partnership Agreement
as currently in effect, the withdrawal of the general partner from TOP, or the
transfer of its interest in TOP, requires the prior written consent of a
majority in interest of the limited partners.
Other material provisions of the Amended TOP Partnership Agreement include:
Issuance of Additional Units. The issuance of additional TOP Units, and the
relative rights, powers and duties of such TOP Units, will be at the
discretion of Bradley, as the sole general partner of TOP. Notwithstanding the
foregoing, for a period of 24 months after the Effective Time, the general
partner shall not cause TOP to issue additional TOP Units with rights, powers
and duties senior to the TOP Units currently held
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<PAGE>
by the limited partners. In addition, the general partner shall not permit TOP
to issue additional TOP Units for a period of 24 months after the Effective
Time if the issuance of such Units would cause a material adverse tax
consequence to the limited partners (determined in the manner described in the
Amended TOP Partnership Agreement), other than in connection with the merger,
consolidation or combination of the general partner or its affiliates.
Distributions. The Amended TOP Partnership Agreement provides for operating
distributions to be made first to the limited partners in an amount equal to
the lesser of (i) 99% of the cash available for distribution from TOP and (ii)
an amount calculated to provide the limited partners with distributions on
each of their TOP Units equal to the dividend yield for the same period on a
share of Bradley Common Stock. Any remaining cash from operations available
for distribution will be distributed to Bradley as general partner. The
Amended TOP Partnership Agreement provides for liquidating distributions to
the limited partners in an amount calculated to equal either an amount per TOP
Unit equal to the amount that would be distributed with respect to each share
of Bradley Common Stock upon the liquidation of Bradley or, in the event that
TOP is liquidated other than in connection with the liquidation of Bradley, an
amount per TOP Unit equal to the then market price of a share of Bradley
Common Stock; provided, however, that the limited partners will not receive
more than 99% of any proceeds available for distribution from the liquidation
of TOP. Any remaining liquidation proceeds will be distributed to Bradley as
the general partner.
Redemption Rights. Pursuant to the Amended TOP Partnership Agreement, each
partner (other than Bradley) will have the right, subject to certain
limitations, to require TOP to redeem all or a portion of the TOP Units held
by such partner for the cash equivalent of that number of shares of Bradley
Common Stock (subject to certain adjustments to prevent dilution), or, at the
option of Bradley, Bradley may elect to purchase TOP Units presented for
redemption for an equivalent number of shares of Bradley Common Stock. The TOP
Partnership Agreement, as currently in effect, provides that the holders of
the TOP Units may exchange each TOP Unit for one share of Tucker Common Stock.
Liability of General Partner; Indemnification. The Amended TOP Partnership
Agreement generally provides that the general partner and any person acting on
its behalf will incur no liability to TOP or any limited partner for any act
or omission within the scope of the general partner's authorities, provided
the general partner's or such other person's action or omission to act was
taken in good faith and in the belief that such action or omission was in the
best interests of Bradley and its affiliates, and provided further, that the
general partner's or such other person's actions or omissions shall not
constitute actual fraud or gross negligence or deliberately dishonest conduct.
The Amended TOP Partnership Agreement also provides for the indemnification
of the general partner and its affiliates and any individual acting on their
behalf from any loss, damage, claim or liability, including, but not limited
to, reasonable attorneys' fees and expenses, incurred by them by reason of any
act performed by them in accordance with the standards set forth above or in
enforcing the provisions of this indemnity.
Management Fees and Expenses. The Amended TOP Partnership Agreement provides
that Bradley shall be reimbursed for all expenses incurred by Bradley relating
to the management and business of TOP.
Amendment. Generally, the Amended TOP Partnership Agreement may be amended
by the general partner without the consent of limited partners, except that
certain amendments which alter or change the distribution rights or redemption
rights of a limited partner shall require the consent of limited partners
holding a majority in interest of TOP Units.
Termination. TOP will continue until December 31, 2050, or upon dissolution
at an earlier time for specified reasons set forth in the Amended TOP
Partnership Agreement.
Environmental Matters. At the time of Tucker's initial public offering, the
Management Directors agreed to indemnify Tucker and TOP against certain
potential environmental liabilities and expenses relating to the Commons of
Chicago Ridge property. These indemnification obligations will be amended in
certain respects by the Amended TOP Partnership Agreement. Originally, the
Management Directors agreed to indemnify Tucker,
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TOP, TFP and each of their subsidiaries against all claims, actions, losses,
penalties, liabilities, costs and expenses incurred by Tucker or TOP and any
of their subsidiaries as a result of or arising out of any matter, condition,
or act at the Commons of Chicago Ridge involving (1) hazardous or regulated
substances, materials, or wastes or petroleum products, (2) certain federal
environmental laws, as well as all environmental health or safety laws,
regulations, and other requirements relating to the aforementioned substances,
materials, wastes, or products, or (3) any administrative, regulatory or
judicial action, suit, investigation or proceeding relating to any of the
aforementioned laws, regulations, or other requirements or any permit
thereunder, which matter, condition or act existed on or arose prior to
October 4, 1993.
The Amended TOP Partnership Agreement amends this indemnification obligation
to apply only when a third party, whether a governmental or regulatory
authority or a private party, initiates a claim, proceeding or investigation
relating to the Commons of Chicago Ridge 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, 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, Bradley has agreed to
keep the Management Directors reasonably informed and to consult with the
Management Directors with respect to any potential claims, settlements and
remediation which could trigger the indemnification obligations of the
Management Directors. In the event of any remediation or proceeding, Bradley
has agreed to consider in good faith any suggestions of the Management
Directors.
The Management Directors' indemnification obligations currently are secured
by 102,308 shares of Tucker Common Stock and 427,339 TOP Units acquired by the
Management Directors in connection with the Tucker's initial public offering
and, upon consummation of the Merger, will be secured by 70,183 shares of
Bradley Common Stock (into which their respective shares of Tucker Common
Stock will be exchanged) and 293,154 TOP Units held or otherwise beneficially
owned by each of the Management Directors and their family members as of the
Effective Time (in each case assuming an Exchange Ratio of .686; an Exchange
Ratio of .665 would yield 68,034 shares of Tucker Common Stock and 284,180 TOP
Units, respectively). After the Effective Time, the TOP Units generally will
be exchangeable at any time for cash or shares of Bradley Common Stock
(subject to certain rights of Bradley), and all such shares of Bradley Common
Stock may be transferred at any time, subject to compliance with applicable
federal securities laws. Accordingly, there can be no assurance that the
Management Directors will hold any shares of Bradley Common Stock or TOP Units
at the time, if ever, when Bradley attempts to realize this security interest
or that the shares of Bradley Common Stock or TOP Units held by the Management
Directors will be sufficient to cover the indemnification obligations.
In connection with the execution of the Merger Agreement, Bradley and TOP
and, if the Merger is consummated, the Management Directors have agreed to
share the cost of having an outside consultant conduct a Phase II
investigation of the soil and groundwater of the Commons of Chicago Ridge and
prepare a report recommending what actions the Surviving Company should take
with respect to such matters. In the event that Bradley decides to implement
any of the recommendations of such consultant (the "Recommended Work"), TOP
and the Management Directors have each agreed to pay fifty percent of the
costs of such remediation, with the Management Directors' aggregate liability
for the Recommended Work limited to a maximum of $200,000.
Registration Rights Agreement. Bradley has registered the shares of Bradley
Common Stock which such holders may receive upon redemption of TOP Units in
this Joint Proxy Statement/Prospectus. Bradley will be obligated to maintain
the effectiveness of such registration statement until such time as all of the
TOP Units have been redeemed for cash or Bradley Common Stock. Bradley has
generally agreed to pay all fees incident to such registration other than
underwriting fees or discounts or fees of counsel, accountants or other
persons retained by the holders.
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Elimination of Covenant Not to Compete. The Amended TOP Partnership
Agreement has also eliminated the covenant not to compete with TOP which was
imposed on the Management Directors and certain of the executive officers of
Tucker. In addition, the general partner, either directly or through entities
other than TOP, may acquire, own, manage, develop, lease or invest in
commercial real estate, including any shopping center, office building or
retail project.
TRANSFER OF INTERESTS IN TMC
In connection with the execution of the Merger Agreement, Kenneth L. Tucker
and Richard H. Tucker agreed to transfer all of their equity interests in TMC
to two individuals who are officers of Bradley in exchange for $500 each.
Prior to the Merger, Kenneth Tucker holds 368 shares of common stock, par
value $.01 per share, of TMC ("TMC Common Stock") and 20 shares of preferred
stock of TMC, par value $.01 per share ("TMC Preferred Stock"), and Richard
Tucker holds 92 shares of TMC Common Stock and 5 shares of TMC Preferred
Stock. The remainder of the outstanding shares of TMC Common Stock and TMC
Preferred Stock are currently held and will continue to be held by TOP.
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UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS
BRADLEY REAL ESTATE, INC.
PRO FORMA CONDENSED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1994
(UNAUDITED)
Prior Bradley Transactions:
During the period from January 1, 1994 to September 30, 1995, Bradley
acquired three properties, sold one property, effected a $125,000,000 shelf
registration statement, acquired the REIT advisory business of its long-
standing external advisor, completed the July Offering and repaid certain
fixed rate mortgage debt.
In March 1994, Bradley purchased Rivercrest for $24,500,000. The purchase of
Rivercrest was financed through borrowings under the Bradley Line of Credit.
In November 1994, Bradley acquired Westwind for $7,500,000. Westwind was
purchased with the assumption of $5,000,000 of mortgage debt, with the balance
paid through a tax-deferred exchange from the sale of Spruce Tree. In April
1995, Bradley acquired St. Francis Plaza for $5,200,000. St. Francis Plaza was
purchased with the assumption of approximately $2,100,000 of mortgage debt and
the cash proceeds from the sale of 182,500 shares of Bradley Common Stock to
the former owner of St. Francis Plaza.
On January 31, 1995, following stockholder approval, Bradley acquired the
REIT advisory business of its long-standing external advisor and thereby
became a self-administered REIT. The acquisition, pursuant to which Bradley
issued 325,000 shares of Bradley Common Stock to the owners of the advisor,
resulted in the termination of an advisory arrangement extending through
August 1999.
On July 6, 1995, Bradley completed the July Offering at a price of $16 per
share. Net proceeds from the July Offering were approximately $37,405,000, of
which $32,600,000 was used to pay down the Bradley Line of Credit, $4,712,000
was used to pay off the non-recourse mortgages assumed in November 1994 upon
the acquisition of Westwind and the balance was used for general business
purposes.
Prior Tucker Transaction:
In June 1994, Tucker acquired the Mequon Pavilions. The Mequon Pavilions was
purchased for $18,300,000 which was financed through a $13,500,000 mortgage
note and borrowings for the balance under the Tucker Line of Credit.
This unaudited Pro Forma Condensed Statement of Operations is presented as
if the Bradley acquisitions, disposition and capital transactions and the
Tucker acquisition described above, and the Merger had been consummated on
January 1, 1994 and with Bradley qualifying as a REIT, distributing all of its
taxable income and, therefore, incurring no federal income tax expense during
the year ended December 31, 1994. The Merger has been accounted for under the
purchase method of accounting in accordance with Accounting Principles Board
Opinion No. 16. In the opinion of Bradley's management, all adjustments
necessary to reflect the effects of these transactions have been made.
This unaudited Pro Forma Condensed Statement of Operations is presented for
comparative purposes only and is not necessarily indicative of what the actual
results of operations of Bradley would have been for the periods presented,
nor does it purport to represent the results to be achieved in future periods.
This unaudited Pro Forma Condensed Statement of Operations should be read in
conjunction with, and is qualified in its entirety by, the respective
historical financial statements and notes thereto of Bradley and Tucker
incorporated by reference into this Joint Proxy Statement/Prospectus.
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<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, 1994
------------------------------------------------
PRO FORMA BRADLEY
BRADLEY TUCKER MERGER AS
PRO FORMA(A) PRO FORMA(B) ADJUSTMENTS ADJUSTED
------------ ------------ ----------- --------
(IN THOUSANDS EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C>
Income:
Rental income............. $34,387 $49,318 $ -- $83,705
Other income.............. 114 1,246 -- 1,360
------- ------- ------- -------
Total revenue........... 34,501 50,564 -- 85,065
------- ------- ------- -------
Expenses:
Operations, maintenance
and management........... 5,038 6,546 -- 11,584
Real estate taxes......... 8,186 9,921 -- 18,107
Mortgage and other inter-
est...................... 2,396 11,148 738 (C) 14,282
Depreciation and amortiza-
tion..................... 6,553 10,607 (4,644)(D) 12,516
Administrative and gener-
al....................... 1,826 4,012 (1,400)(E) 4,438
------- ------- ------- -------
Total expenses.......... 23,999 42,234 (5,306) 60,927
------- ------- ------- -------
Income before allocation to
minority interest.......... 10,502 8,330 5,306 24,138
Income allocated to minority
interest................... -- (392) -- (392)
------- ------- ------- -------
Net income.................. $10,502 $ 7,938 $ 5,306 $23,746
======= ======= ======= =======
Per share data:
Net income per share...... $ .94 $ .73 $ 1.27(F)
Weighted average number of
shares outstanding....... 11,199 10,828 18,628(F)
</TABLE>
- --------
(A) See page 85 for computation of pro forma adjustments to reflect prior
Bradley transactions.
(B) See page 87 for computation of pro forma adjustments to reflect the prior
Tucker transaction.
(C) Represents the result of interest on borrowings estimated for payment of
fees and expenses related to the Merger of approximately $8,500,000, at an
interest rate of 8.688% which was Bradley's borrowing rate at September
30, 1995. A 0.125% change in the variable rate would result in a change in
the pro forma interest adjustment of approximately $11,000.
(D) Depreciation and amortization changes relate to recording Tucker's
properties at Bradley's purchase price, the related depreciation utilizing
an estimated useful life of 39 years and a depreciable basis of
approximately $233,000,000, and the elimination of historical amortization
of Tucker deferred assets in accordance with the purchase method of
accounting, as follows (in thousands):
<TABLE>
<S> <C>
Pro forma depreciation expense ($233,000,000 over 39 years)...... $ 5,963
Tucker depreciation.............................................. (9,328)
Tucker amortization of deferred costs............................ (1,279)
-------
Pro forma adjustment............................................. $(4,644)
=======
</TABLE>
(E) Represents general and administrative cost savings which have been
estimated based upon historical costs for those items which will be
eliminated as a result of the Merger, as follows (in thousands):
<TABLE>
<S> <C>
Salaries and benefits.............................................. $ 700
Professional fees.................................................. 400
D&O insurance and director fees.................................... 200
Other.............................................................. 100
------
Pro forma adjustment............................................... $1,400
======
</TABLE>
(F) The Exchange Ratio used in the pro forma financial statements was .686 of
a share of Bradley Common Stock per share of Tucker Common Stock. If the
Exchange Ratio was .665, then pro forma net income per share for the year
ended December 31, 1994 would have been $1.28, and pro forma weighted
average number of shares outstanding for the year ended December 31, 1994
would have been 18,400,139.
84
<PAGE>
PRO FORMA ADJUSTMENTS TO REFLECT PRIOR BRADLEY TRANSACTIONS:
<TABLE>
<CAPTION>
BRADLEY
------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31, 1994
------------------------------------------------------------------------------
PROPERTY ADJUSTMENTS(A)
-------------------------------------------
RIVERCREST WESTWIND SPRUCE TREE ST. FRANCIS OTHER
HISTORICAL CENTER PLAZA CENTRE PLAZA ADJUSTMENTS PRO FORMA
---------- ---------- -------- ----------- ----------- ----------- ---------
(IN THOUSANDS EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C> <C>
Income:
Rental income......... $32,875 $1,060 $1,103 $(1,163) $512 $ -- $34,387
Other income.......... 112 1 -- -- 1 -- 114
------- ------ ------ ------- ---- ------- -------
Total revenue....... 32,987 1,061 1,103 (1,163) 513 -- 34,501
------- ------ ------ ------- ---- ------- -------
Expenses:
Operations,
maintenance and
management........... 5,315 105 111 (505) 12 -- 5,038
Real estate taxes..... 8,070 354 297 (548) 13 -- 8,186
Mortgage and other in-
terest............... 4,524 -- -- -- -- (2,128)(B) 2,396
Depreciation and amor-
tization............. 5,146 -- -- -- -- 1,407 (C) 6,553
Administrative and
general.............. 2,288 -- -- -- -- (462)(D) 1,826
------- ------ ------ ------- ---- ------- -------
Total expenses...... 25,343 459 408 (1,053) 25 (1,183) 23,999
------- ------ ------ ------- ---- ------- -------
Income before gain on
sale of property....... 7,644 602 695 (110) 488 1,183 10,502
Gain on sale of proper-
ty..................... 983 -- -- (983) -- -- --
------- ------ ------ ------- ---- ------- -------
Net income.............. $ 8,627 $ 602 $ 695 $(1,093) $488 $ 1,183 $10,502
======= ====== ====== ======= ==== ======= =======
Per share data:
Net income............ $ 1.05 $ .94
Weighted average num-
ber of shares out-
standing............. 8,192 11,199
</TABLE>
- -------
(A) Increase represents historical operating revenues and expenses for the
year ended December 31, 1994 for the three properties acquired during 1994
and 1995 for the period during which Bradley did not own them, offset by
decreases in historical operating revenues and expenses for the year ended
December 31, 1994 for the property sold in 1994 as if the property was
sold prior to the beginning of the period presented.
(B) Decrease represents the net result of interest on borrowings for the
period during which Bradley did not incur such interest and the
elimination of interest on loans which have been repaid, as follows (in
thousands):
<TABLE>
<CAPTION>
PRO FORMA
BALANCE RATE INTEREST EXPENSE
------- ----- ----------------
<S> <C> <C> <C>
Repayments:
Line of Credit......................... 32,600 7.938% $(2,588)
Mortgage Notes Payable................. 4,712 9.500% (448)
Borrowings:
Line of Credit......................... 24,500 5.563% 341
Mortgage Notes Payable................. 5,000 9.500% 396
Mortgage Note Payable.................. 2,100 8.125% 171
------ ----- -------
$(2,128)
=======
</TABLE>
85
<PAGE>
(C) Increase represents additional depreciation of approximately $323,000 for
the year ended December 31, 1994 relating to the three properties acquired
during 1994 and 1995, for the period during which Bradley did not own them
and an increase in amortization of $1,192,000 resulting from the buyout of
the advisory agreement of Bradley's former external advisor as if the
buyout occurred prior to the beginning of the period presented, partially
offset by a decrease in depreciation of approximately $108,000 as if the
property sold during 1994 was sold prior to the beginning of the period
presented. The increase in depreciation expense for the property
acquisitions was computed utilizing an estimated useful life of 39 years
and a depreciable basis totaling $28,000,000. The decrease in depreciation
expense for the property sold was computed utilizing an estimated useful
life of 31.5 years and a depreciable basis of $1,500,000. The amortization
was computed by amortizing the cost of the buyout of $5,565,000 over a
period of approximately five years.
(D) Represents the net decrease in general and administrative expenses
estimated resulting from the acquisition of the REIT advisory business of
its long-standing external advisor as if the acquisition occurred prior to
the beginning of the period presented, as follows (in thousands):
<TABLE>
<S> <C>
Elimination of fee paid to advisor.............................. $(1,057)
Additional expenses:
Salaries and benefits......................................... 509
Rent expense.................................................. 75
Other......................................................... 11
-------
$ (462)
=======
</TABLE>
Additional expenses are based on actual costs incurred during the nine
months ended September 30, 1995, which reflect the estimated expenses that
would have been incurred if the acquisition occurred prior to the beginning
of the period presented.
86
<PAGE>
PRO FORMA ADJUSTMENTS TO REFLECT THE PRIOR TUCKER TRANSACTION:
<TABLE>
<CAPTION>
TUCKER
------------------------------------------------
YEAR ENDED DECEMBER 31, 1994
------------------------------------------------
PROPERTY OTHER
HISTORICAL ADJUSTMENTS(A) ADJUSTMENTS PRO FORMA
---------- -------------- ----------- ---------
(IN THOUSANDS EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C>
Income:
Rental income............... $47,911 $1,407 $ -- $49,318
Other income................ 1,246 -- -- 1,246
------- ------ ----- -------
Total revenue............. 49,157 1,407 -- 50,564
------- ------ ----- -------
Expenses:
Operations, maintenance and
management................. 6,178 368 -- 6,546
Real estate taxes........... 9,921 -- -- 9,921
Mortgage and other inter-
est........................ 10,513 -- 635 (B) 11,148
Depreciation and amortiza-
tion....................... 10,357 -- 250 (C) 10,607
Administrative and general.. 3,944 68 -- 4,012
------- ------ ----- -------
Total expenses............ 40,913 436 885 42,234
------- ------ ----- -------
Income before allocation to
minority interest............ 8,244 971 (885) 8,330
Income allocated to minority
interest..................... (392) -- -- (392)
------- ------ ----- -------
Net income.................... $ 7,852 $ 971 $(885) $ 7,938
======= ====== ===== =======
Per share data:
Net income.................. $ .73 $ .73
Weighted average number of
shares outstanding......... 10,828 10,828
</TABLE>
- --------
(A) Increase represents historical operating revenues and expenses for the
year ended December 31, 1994 for the property acquired during 1994 for the
period during which Tucker did not own it.
(B) Represents additional interest on the mortgage obtained ($13,500,000) at
6.813% and an increase in the balance outstanding on the Tucker Line of
Credit ($4,400,000) at 7.313% in connection with the acquisition of the
property for the period during which Tucker did not own it. A 0.125%
change in the variable rates would result in a change in the pro forma
interest adjustment of approximately $12,000.
(C) Represents additional depreciation for the year ended December 31, 1994
relating to the property acquired during 1994 for the period during which
Tucker did not own it. The increase in depreciation expense for the
property acquired is computed utilizing an estimated useful life of 31.5
years and a depreciable basis of $15,552,000. The acquisition amount
allocated to land is $2,748,000.
87
<PAGE>
BRADLEY REAL ESTATE, INC.
PRO FORMA CONDENSED STATEMENT OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1995
(UNAUDITED)
During the period from January 1, 1995 to September 30, 1995, Bradley
acquired one property. The acquisition was funded with the assumption of
approximately $2,100,000 of mortgage debt and the cash proceeds from the sale
of 182,500 shares of Bradley Common Stock at a price of $17 per share to the
former owner of the property. Also during the period January 1, 1995 to
September 30, 1995, Bradley acquired the REIT advisory business of its long-
standing external advisor and completed the July Offering at a price of $16
per share. Net proceeds from the July Offering were approximately $37,405,000,
of which $32,600,000 was used to pay down the Line of Credit, $4,712,000 was
used to pay off the non-recourse mortgages assumed in November 1994 upon the
acquisition of a property and the balance was used for general business
purposes.
This unaudited Pro Forma Condensed Statement of Operations is presented as
if the Bradley acquisitions described above, the July Offering and the Merger
had been consummated on January 1, 1994 and with Bradley qualifying as a REIT,
distributing all of its taxable income and, therefore, incurring no federal
income tax expense during the period January 1, 1995 through September 30,
1995. The Merger has been accounted for under the purchase method of
accounting in accordance with Accounting Principles Board Opinion No. 16. In
the opinion of Bradley's management, all adjustments necessary to reflect the
effects of these transactions have been made.
This unaudited Pro Forma Condensed Statement of Operations is presented for
comparative purposes only and is not necessarily indicative of what the actual
results of operations of Bradley would have been for the period presented, nor
does it purport to represent the results to be achieved in future periods.
This unaudited Pro Forma Condensed Statement of Operations should be read in
conjunction with, and is qualified in its entirety by, the respective
historical financial statements and notes thereto of Bradley and Tucker
incorporated by reference into this Joint Proxy Statement/Prospectus.
<TABLE>
<CAPTION>
NINE MONTHS ENDED SEPTEMBER 30, 1995
-------------------------------------------------
PRO FORMA BRADLEY
BRADLEY TUCKER MERGER AS
PRO FORMA(A) HISTORICAL(B) ADJUSTMENTS ADJUSTED
------------ ------------- ----------- --------
(IN THOUSANDS EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C>
Income:
Rental income........... $26,847 $36,940 $ -- $63,787
Other income............ 142 904 -- 1,046
------- ------- ------- -------
Total revenue......... 26,989 37,844 -- 64,833
------- ------- ------- -------
Expenses:
Operations, maintenance
and management......... 4,239 6,046 -- 10,285
Real estate taxes....... 6,384 7,910 -- 14,294
Mortgage and other in-
terest................. 2,556 9,835 554 (C) 12,945
Depreciation and amorti-
zation................. 5,438 8,828 (4,356)(D) 9,910
Administrative and gen-
eral................... 1,154 2,242 (1,050)(E) 2,346
Provision for merger re-
lated expenses and
write-downs............ -- 1,411 (938)(F) 473
------- ------- ------- -------
Total expenses........ 19,771 36,272 (5,790) 50,253
------- ------- ------- -------
Income before allocation
to minority interest..... 7,218 1,572 5,790 14,580
Income allocated to minor-
ity interest............. -- (64) -- (64)
------- ------- ------- -------
Net income................ $ 7,218 $ 1,508 $(5,790) $14,516
======= ======= ======= =======
Per share data:
Net income.............. $ .64 $ .14 $ .78 (G)
Weighted average number
of shares outstanding.. 11,199 10,828 18,628 (G)
</TABLE>
88
<PAGE>
- --------
(A) See page 90 for computation of pro forma adjustments to reflect prior
Bradley transactions.
(B) Represents historical operating results as reported by Tucker for the nine
months ended September 30, 1995.
(C) Represents the result of interest on borrowings estimated for payment of
fees and expenses related to the Merger of approximately $8,500,000, at an
interest rate of 8.688% which was Bradley's borrowing rate at September
30, 1995. A 0.125% change in the variable rate would result in a change in
the pro forma interest adjustment of approximately $8,000.
(D) Depreciation and amortization changes relate to recording Tucker's
properties at Bradley's purchase price, the related depreciation utilizing
an estimated useful life of 39 years and a depreciable basis of
approximately $233,000,000, and the elimination of historical amortization
of Tucker deferred assets in accordance with the purchase method of
accounting, as follows (in thousands):
<TABLE>
<S> <C>
Pro forma depreciation expense ($233,000,000 over 39 years)...... $ 4,472
Tucker depreciation.............................................. (7,661)
Tucker amortization of deferred costs............................ (1,167)
-------
Pro forma adjustment............................................. $(4,356)
=======
</TABLE>
(E) Represents general and administrative cost savings which have been
estimated based upon historical costs for those items which will be
eliminated as a result of the Merger, as follows (in thousands):
<TABLE>
<S> <C>
Salaries and benefits.............................................. $ 525
Professional fees.................................................. 300
D&O insurance and director fees.................................... 150
Other.............................................................. 75
------
Pro forma adjustment............................................... $1,050
======
</TABLE>
(F) Represents the elimination of the write-offs of approximately $447,000
representing costs incurred related to the Merger, and approximately
$491,000 representing capitalized costs related to certain development
projects which will not be pursued by the Surviving Company.
(G) The Exchange Ratio used in the pro forma financial statements was .686 of
a share of Bradley Common Stock per share of Tucker Common Stock. If the
Exchange Ratio was .665, then pro forma net income per share for the nine
months ended September 30, 1995 would have been $.78, and pro forma
weighted average number of shares outstanding for the nine months ended
September 30, 1995 would have been 18,400,139.
89
<PAGE>
PRO FORMA ADJUSTMENTS TO REFLECT PRIOR BRADLEY TRANSACTIONS:
<TABLE>
<CAPTION>
BRADLEY
-------------------------------------------------
NINE MONTHS ENDED SEPTEMBER 30, 1995
-------------------------------------------------
PROPERTY OTHER
HISTORICAL ADJUSTMENTS(A) ADJUSTMENTS PRO FORMA
---------- -------------- ----------- ---------
(IN THOUSANDS EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C>
Income:
Rental income.............. $26,697 $150 $ -- $26,847
Other income............... 141 1 -- 142
------- ---- ------- -------
Total revenue............ 26,838 151 -- 26,989
------- ---- ------- -------
Expenses:
Operations, maintenance and
management................ 4,235 4 -- 4,239
Real estate taxes.......... 6,380 4 -- 6,384
Mortgage and other inter-
est....................... 3,826 -- (1,270)(B) 2,556
Depreciation and amortiza-
tion...................... 5,413 -- 25 (C) 5,438
Administrative and gener-
al........................ 1,154 -- -- 1,154
------- ---- ------- -------
Total expenses........... 21,008 8 (1,245) 19,771
------- ---- ------- -------
Net income................... $ 5,830 $143 $ 1,245 $ 7,218
======= ==== ======= =======
Per share data:
Net income................. $ .62 $ .64
Weighted average number of
shares outstanding........ 9,404 11,199
</TABLE>
- --------
(A) Increase represents historical operating revenues and expenses for the
nine months ended September 30, 1995 for the property acquired during 1995
for the period during which Bradley did not own it.
(B) Decrease represents the net result of interest on borrowings for the
period during which Bradley did not incur such interest and the
elimination of interest on loans which have been repaid, as follows (in
thousands):
<TABLE>
<CAPTION>
PRO FORMA
BALANCE RATE INTEREST EXPENSE
------- ----- ----------------
<S> <C> <C> <C>
Repayments:
Line of Credit............................... $32,600 7.938% $(1,319)
Borrowings:
Mortgage Note Payable........................ 2,100 8.125% 49
-------
$(1,270)
=======
</TABLE>
(C) Increase represents additional depreciation for the nine months ended
September 30, 1995 relating to the property acquired during 1995 for the
period during which Bradley did not own it. Depreciation expense was
computed utilizing an estimated useful life of 39 years and a depreciable
basis totaling approximately $3,700,000.
90
<PAGE>
BRADLEY REAL ESTATE, INC.
PRO FORMA CONDENSED BALANCE SHEET
SEPTEMBER 30, 1995
(UNAUDITED)
This unaudited Pro Forma Condensed Balance Sheet is presented as if the
Merger had been consummated on September 30, 1995. The Merger has been
accounted for under the purchase method of accounting in accordance with
Accounting Principles Board Opinion No. 16. In the opinion of Bradley's
management, all adjustments necessary to reflect the effects of this
transaction have been made.
This unaudited Pro Forma Condensed Balance Sheet is presented for
comparative purposes only and is not necessarily indicative of what the actual
financial position of Bradley would have been at September 30, 1995, nor does
it purport to represent the future financial position of Bradley. This
unaudited Pro Forma Condensed Balance Sheet should be read in conjunction
with, and is qualified in its entirety by, the respective historical financial
statements and notes thereto of Bradley and Tucker incorporated by reference
into this Joint Proxy Statement/Prospectus.
<TABLE>
<CAPTION>
PRO FORMA BRADLEY
BRADLEY TUCKER MERGER AS
HISTORICAL HISTORICAL ADJUSTMENTS(A) ADJUSTED
---------- ---------- -------------- --------
(IN THOUSANDS EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C>
ASSETS
Real estate investments, at
cost......................... $184,621 $319,899 $(25,421)(B) $479,099
Accumulated depreciation and
amortization................. 26,229 24,022 (24,022)(B) 26,229
-------- -------- -------- --------
Net real estate investments... 158,392 295,877 (1,399) 452,870
Construction in progress...... 2,797 3,043 -- 5,840
Cash and cash equivalents..... 982 9,322 -- 10,304
Rents and other receivables,
net.......................... 7,680 12,551 (7,203)(C) 13,028
Unamortized buyout of con-
tract, net................... 4,670 -- -- 4,670
Due from affiliates........... -- 114 -- 114
Deferred charges and prepaid
expenses, net................ 4,334 5,677 (5,990)(D) 4,021
Other assets.................. -- 3,846 (360)(E) 3,486
-------- -------- -------- --------
Total assets................ $178,855 $330,430 $(14,952) $494,333
======== ======== ======== ========
LIABILITIES
Mortgage loans................ $ 24,867 $132,612 -- $157,479
Lines of credit............... 9,800 44,679 8,500 (F) 62,979
Accounts payable and accrued
liabilities.................. 8,033 14,619 -- 22,652
Dividends and distributions
payable...................... -- 2,822 -- 2,822
Other liabilities............. -- 2,877 -- 2,877
-------- -------- -------- --------
Total liabilities........... 42,700 197,609 8,500 248,809
-------- -------- -------- --------
Minority interests............ -- 5,441 (995)(G) 4,446
-------- -------- -------- --------
STOCKHOLDERS' EQUITY
Shares of common stock........ 112 11 63 (H) 186
Paid-in capital............... 148,360 155,224 (50,375)(H) 253,209
Distributions in excess of ac-
cumulated earnings........... (12,317) (27,855) 27,855 (H) (12,317)
-------- -------- -------- --------
Total stockholders' equity.. 136,155 127,380 (22,457) 241,078
-------- -------- -------- --------
Total liabilities and
stockholders' equity..... $178,855 $330,430 $(14,952) $494,333
======== ======== ======== ========
</TABLE>
- --------
See footnotes on page 92.
91
<PAGE>
- --------
(A) Represents adjustments to record the Merger in accordance with the
purchase method of accounting, based upon a purchase price of
approximately $311,032,000, which assumes a value of $14.125 per share of
Bradley Common Stock, computed as follows (in thousands):
<TABLE>
<S> <C>
Issuance of Bradley Common Stock................................. $104,923
Assumption of Tucker liabilities................................. 197,609
Merger costs..................................................... 8,500
--------
$311,032
========
</TABLE>
(B) Decrease in net book value of the Tucker real estate assets is based upon
Bradley's purchase price.
(C) To reduce Tucker historical deferred rent receivables to reflect the price
paid by Bradley in accordance with the purchase method of accounting.
(D) Represents the elimination of deferred charges in accordance with the
purchase method of accounting and the elimination of costs related to the
Merger, capitalized as of September 30, 1995, as follows (in thousands):
<TABLE>
<S> <C>
Loan costs........................................................ $ 3,743
Lease commissions................................................. 3,936
Other leasing costs............................................... 883
Organization costs................................................ 142
Less accumulated amortization..................................... (3,027)
-------
5,677
Merger related costs.............................................. 313
-------
$ 5,990
=======
</TABLE>
(E) Represents capitalized costs related to a development project not expected
to be pursued by the Surviving Company.
(F) Estimated payments for fees and expenses related to the Merger as follows
(in thousands):
<TABLE>
<S> <C>
Legal and accounting............................................... $2,400
Investment advisory fees........................................... 2,025
Termination and severance.......................................... 1,700
D&O insurance...................................................... 650
Real estate due diligence and closing costs........................ 425
Printing and filing fees........................................... 350
Other.............................................................. 950
------
$8,500
======
</TABLE>
(G) To reflect the adjustment of TOP Units based upon an exchange ratio of
.686 and a Bradley stock price of $14.125, as follows:
<TABLE>
<CAPTION>
TOP MINORITY
UNITS INTEREST
-------- --------------
(IN THOUSANDS)
<S> <C> <C>
Issuance of TOP Units............................ 314,748 $ 4,446
Historical....................................... (458,817) (5,441)
-------- -------
(144,069) $ (995)
======== =======
</TABLE>
92
<PAGE>
(H) To adjust Tucker's capital accounts to reflect the issuance of 7,428,202
shares of Bradley Common Stock in exchange for all of the outstanding
shares of Tucker Common Stock at an Exchange Ratio of .686 shares of
Bradley Common Stock for each outstanding share of Tucker Common Stock, as
follows (in thousands):
<TABLE>
<CAPTION>
COMMON PAID-IN DISTRIBUTION IN
SHARES CAPITAL EXCESS OF EARNINGS
------ --------- ------------------
<S> <C> <C> <C>
Issuance of Bradley Common Stock.... $ 74 $ 104,849 $ --
Tucker's historical stockholders'
equity............................. (11) (155,224) (27,855)
---- --------- --------
Merger adjustment................... $ 63 $ (50,375) $ 27,855
==== ========= ========
</TABLE>
If the Exchange Ratio is .665 of a share of Bradley Common Stock for each
outstanding share of Tucker Common Stock, then Tucker's capital accounts
would be adjusted to reflect the issuance of 7,200,808 shares of Bradley
Common Stock in exchange for all the outstanding shares of Tucker Common
Stock, as follows (in thousands):
<TABLE>
<CAPTION>
COMMON PAID-IN DISTRIBUTION IN
SHARES CAPITAL EXCESS OF EARNINGS
------ --------- ------------------
<S> <C> <C> <C>
Issuance of Bradley Common Stock.... $ 72 $ 115,141 $ --
Tucker's historical stockholders'
equity............................. (11) (155,224) (27,855)
---- --------- --------
Merger adjustment................... $ 61 $ (40,083) $ 27,855
==== ========= ========
</TABLE>
93
<PAGE>
MANAGEMENT OF THE SURVIVING COMPANY
Under the Merger Agreement, the directors and executive officers of Bradley
will become the directors and executive officers of the Surviving Company. The
directors and executive officers of Bradley, their ages, positions and
business experience for at least the past five years are set forth below. The
Board of Directors is segregated into three classes, with terms ending in
1996, 1997 and 1998, respectively. Directors elected at future stockholder
meetings will hold office for three years. Executive officers are elected
annually by the Board of Directors for terms ending on the next annual meeting
of the Board of Directors.
<TABLE>
<CAPTION>
NAME POSITION WITH THE SURVIVING COMPANY
---- -----------------------------------
<S> <C>
E. Lawrence Miller...... President, Chief Executive Officer and Director (term expires in 1996)
William L. Brown........ Director (term expires in 1996)
Joseph E. Hakim......... Director (term expires in 1996)
John B. Hynes III....... Director (term expires in 1998)
Stephen G. Kasnet....... Director (term expires in 1997)
Paul G. Kirk, Jr. ...... Director (term expires in 1998)
W. Nicholas Thorndike... Director (term expires in 1998)
A. Robert Towbin........ Director (term expires in 1997)
Thomas P. D'Arcy........ Executive Vice President
Richard L. Heuer........ Executive Vice President
Marianne Dunn........... Senior Vice President
Irving E. Lingo, Jr. ... Chief Financial Officer
</TABLE>
E. Lawrence Miller, age 53, has been Chief Executive Officer of Bradley
since October 1994, President of Bradley since 1985, and was appointed to the
Board in 1992. From 1984 to 1994, Mr. Miller was also a Senior Vice President
of R.M. Bradley & Co., Inc., the long-standing external advisor of Bradley
("RMB"). Previously, Mr. Miller served as general counsel of Northeast
Operations for Prudential Insurance Company of America. Mr. Miller serves as
Chairman and a member of the Executive Committee of the Board of Governors of
the National Association of Real Estate Investment Trusts and is a member of
the Urban Land Institute and of the International Council of Shopping Centers.
William L. Brown, age 73, was Chairman of the Board of Bank of Boston
Corporation and The First National Bank of Boston from 1983 to 1989, Chief
Executive Officer from 1983 to 1987 and President from 1971 to 1982. He was a
director of both Bank of Boston Corporation and The First National Bank of
Boston until March 1992. He is also a director of GC Companies, Inc., Standex
International Corporation, Stone & Webster, Incorporated, Ionics,
Incorporated, North American Mortgage Company and the John F. Kennedy Library
Foundation.
Joseph E. Hakim, age 48, is President of Joseph P. Kennedy Enterprises, Inc.
in New York, New York, a Kennedy family-owned asset management company for
which he has held a variety of executive positions since 1974. In this
capacity, Mr. Hakim also serves as President and Chief Executive Officer of
Merchandise Mart Properties, Inc. in Chicago, Illinois, a subsidiary of Joseph
P. Kennedy Enterprises, Inc., which manages approximately 7.5 million square
feet of properties. Mr. Hakim is Treasurer of the Joseph P. Kennedy, Jr.
Foundation and the Robert F. Kennedy Memorial.
John B. Hynes III, age 37, is a Senior Vice President of RMB, overseeing the
operations of its Commercial Brokerage Division. Prior to joining RMB in 1993,
Mr. Hynes directed the Boston office of Lincoln Property Company (a commercial
real estate development company) as its Operating Partner, and prior to that
time was a Vice President of the Codman Company of Boston. He is a member of
numerous Boston real estate industry organizations.
94
<PAGE>
Stephen G. Kasnet, age 50, was Managing Director of First Winthrop
Corporation and Winthrop Financial Associates (real estate development and
management companies) from 1991 to September 1995. From 1989 to 1991, he was
Executive Vice President of Cabot, Cabot & Forbes (a real estate development
and management company) and prior to 1989 was Executive Vice President of RMB.
He is Chairman of the Board of Warren Bancorp, Inc. and Warren Five Cents
Savings Bank in Peabody, Massachusetts, a trustee of Pioneer Winthrop Real
Estate Investment Fund and a member of the Urban Land Institute.
Paul G. Kirk, Jr., age 57, is counsel to, and until 1989 was a partner of,
the law firm of Sullivan & Worcester in Boston, Massachusetts. He is also
Chairman and Treasurer of Kirk-Sheppard & Co., Inc., a business advisory and
consulting firm. From 1985 to 1989, he served as Chairman of the Democratic
Party of the United States, and from 1983 to 1985 as its Treasurer. Mr. Kirk
is a director of ITT Corporation, ITT Hartford Insurance Co. and Rayonier,
Inc. He is a trustee of Stonehill College and St. Sebastian's School, Co-
Chairman of the Commission on Presidential Debates, Chairman of the John F.
Kennedy Library Foundation and Chairman of the National Democratic Institute
for International Affairs.
W. Nicholas Thorndike, age 62, serves as a corporate director or trustee of
a number of organizations, including Courier Corporation, Providence Journal
Company, Eastern Utility Associates, Data General Corporation and The Putnam
Funds. He also serves as a Trustee of Massachusetts General Hospital, having
served as Chairman of the Board from 1987 to 1992 and President from 1992 to
1994. Until December 1988, he was Chairman and Managing Partner of Wellington
Management Company (an investment advisor). In February 1994, he was appointed
a successor trustee of certain private trusts in which he had no beneficial
interest and concurrently became (until October 1994) Chairman of two
privately-owned corporations controlled by such trusts. These corporations
filed voluntary petitions under Chapter 11 of the Federal Bankruptcy Code in
August 1994.
A. Robert Towbin, age 60, is a Managing Director of Unterberg Harris. From
January 1994 to August 1995, he was President and Chief Executive Officer of
the Russian American Enterprise Fund and, upon its merger with the Fund for
Large Enterprises in Russia, Vice Chairman of the resulting U.S. Russia
Investment Fund. From 1987 to 1994, Mr. Towbin was a Managing Director of
Lehman Brothers. Prior to 1987, he was a director and Vice Chairman of L.F.
Rothschild, Unterberg, Towbin Holdings, Inc. Mr. Towbin serves as a director
of the Columbus New Millenium Fund, Gerber Scientific, Inc., Globalstar
Telecommunications Limited and K&F Industries Inc., and is a former director
of several other public companies. He is a member of the Securities Industry
Association and is a director of numerous charitable and civic organizations.
Thomas P. D'Arcy, age 36, has served as Executive Vice President of Bradley
since September 1995, having previously served as Senior Vice President of
Bradley since 1992 and Vice President of Bradley since 1989. Prior to joining
Bradley, Mr. D'Arcy was employed by RMB as a member of its property management
and real estate brokerage departments for over eight years. Mr. D'Arcy is a
member of the International Council of Shopping Centers and the Building
Owners and Managers Association.
Richard L. Heuer, age 43, has served as Executive Vice President of Bradley
since September 1995, having previously served as Senior Vice President of
Bradley since late 1994. Prior to joining Bradley, Mr. Heuer was employed by
the Welsh Companies, the independent property management company that was
managing Bradley's Minnesota properties.
Marianne Dunn, age 36, was named Senior Vice President of Bradley in
September 1995, having served as Vice President of Bradley since 1993 and as
Investment Manager since 1990. Prior to joining Bradley, Ms. Dunn was employed
by a lending institution as an Assistant Treasurer in the consumer lending
department. Ms. Dunn is a member of the International Council of Shopping
Centers.
Irving E. Lingo, Jr., age 43, joined Bradley as Chief Financial Officer in
September 1995. Mr. Lingo was most recently employed as Chief Financial
Officer of Lingerfelt Industrial Properties, a division of the Liberty
Property Trust from 1993 to 1995. From 1991 to 1992, Mr. Lingo served as Vice
President--Finance of
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CSX Realty, a division of CSX Corporation. From 1983 to 1990, Mr. Lingo was
Executive Vice President of Goodman Segar Hogan, Inc., a diversified
Southeastern real estate firm. Prior to joining Goodman Segar Hogan, Mr. Lingo
was associated with Ernst & Young for eight years. Mr. Lingo is a certified
public accountant and member of the American Institute of Certified Public
Accountants.
THE MEETINGS OF STOCKHOLDERS
BRADLEY SPECIAL MEETING
The Bradley Special Meeting will be held at , Boston,
Massachusetts, on February , 1996, at 10:00 a.m., Eastern time. At the
Bradley Special Meeting, holders of Bradley Common Stock will consider and
vote upon a proposal to approve the Merger and the Merger Agreement. This
proposal must be approved by the affirmative vote of the holders of a majority
of the outstanding shares of Bradley Common Stock entitled to vote thereon.
Holders of Bradley Common Stock are entitled to one vote per share.
Bradley has fixed the close of business on January , 1996 as the Bradley
Record Date for determining holders entitled to notice of and to vote at the
Bradley Special Meeting. Only holders of Bradley Common Stock at the close of
business on the Bradley Record Date will be entitled to notice of and to vote
at the Bradley Special Meeting. As of the Bradley Record Date, there were
11,226,624 shares of Bradley Common Stock issued and outstanding, of which
approximately 64,000 shares (representing less than 1% of the outstanding
shares of Bradley Common Stock) were owned beneficially by directors and
executive officers of Bradley and their affiliates. As of the date of the
Merger Agreement, all of the directors and executive officers of Bradley
indicated that they presently intended to vote all shares of Bradley Common
Stock which they own to approve the Merger and the Merger Agreement.
All shares of Bradley Common Stock represented by properly executed proxies
will, unless such proxies have been previously revoked, be voted in accordance
with the instructions indicated in such proxies. IF NO INSTRUCTIONS ARE
INDICATED, SUCH SHARES OF BRADLEY COMMON STOCK WILL BE VOTED IN FAVOR OF THE
MERGER AND THE MERGER AGREEMENT. A stockholder who has given a proxy may
revoke it at any time prior to its exercise by giving written notice thereof
to the Secretary of Bradley, by signing and returning a later-dated proxy or
by voting in person at the Bradley Special Meeting; however, mere attendance
at the Bradley Special Meeting will not in and of itself have the effect of
revoking the proxy.
Votes cast by proxy or in person at the Bradley Special Meeting will be
tabulated by the inspector(s) of election appointed for the meeting and will
determine whether or not a quorum is present. The presence in person or by
properly executed proxy of the holders of a majority of the issued and
outstanding shares of Bradley Common Stock entitled to vote at the Bradley
Special Meeting is necessary to constitute a quorum at the Bradley Special
Meeting. Abstentions and broker non-votes will be treated as shares that are
present at the Bradley Special Meeting for purposes of determining whether a
quorum exists. In order to be approved, the Merger and the Merger Agreement
must receive the affirmative vote of the holders of a majority of the issued
and outstanding shares of Bradley Common Stock entitled to vote on the Merger
and the Merger Agreement. Abstentions and broker non-votes will have the
effect of votes against the approval of the Merger and the Merger Agreement.
Bradley will bear its own cost of solicitation of proxies. Brokerage firms,
fiduciaries, nominees and others will be reimbursed for their out-of-pocket
expenses in forwarding proxy materials to beneficial owners of shares of
Bradley Common Stock held in their names. In addition to the use of the mails,
proxies may be solicited by
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directors, officers and regular employees of Bradley, who will not be
specifically compensated for such services, by means of personal calls upon,
or telephonic or telegraphic communications with, stockholders or their
representatives. In addition, Georgeson & Co. has been engaged by Bradley to
act as proxy solicitors and will receive a fee of $6,500 plus expenses.
THE BOARD OF DIRECTORS OF BRADLEY HAS UNANIMOUSLY APPROVED THE MERGER AND
THE MERGER AGREEMENT AND UNANIMOUSLY RECOMMENDS THAT BRADLEY STOCKHOLDERS VOTE
FOR APPROVAL OF THE MERGER AND THE MERGER AGREEMENT. SEE "THE MERGER--
BACKGROUND OF THE MERGER" AND "--REASONS FOR THE MERGER; RECOMMENDATION OF THE
BOARD OF DIRECTORS OF BRADLEY."
TUCKER SPECIAL MEETING
The Tucker Special Meeting will be held at , Chicago,
Illinois, on February , 1996, at 9:00 a.m., Central time. At the Tucker
Special Meeting, holders of Tucker Common Stock will consider and vote upon a
proposal to approve the Merger and the Merger Agreement. This proposal must be
approved by the affirmative vote of the holders of two-thirds of the
outstanding shares of Tucker Common Stock entitled to vote thereon. Holders of
Tucker Common Stock are entitled to one vote per share.
The Tucker Board of Directors has fixed the close of business on January ,
1996 as the Tucker Record Date for determining holders entitled to notice of
and to vote at the Tucker Special Meeting. Only holders of Tucker Common Stock
at the close of business on the Tucker Record Date will be entitled to notice
of and to vote at the Tucker Special Meeting. As of the Tucker Record Date,
there were 10,828,283 shares of Tucker Common Stock issued and outstanding, of
which 112,583 shares (representing approximately 1% of the outstanding shares
of Tucker Common Stock) were owned beneficially by directors and executive
officers of Tucker and their affiliates. As of the date of the Merger
Agreement, all of the directors and executive officers of Tucker indicated
that they presently intended to vote all shares of Tucker Common Stock which
they own to approve the Merger and the Merger Agreement.
All shares of Tucker Common Stock represented by properly executed proxies
will, unless such proxies have been previously revoked, be voted in accordance
with the instructions indicated in such proxies. IF NO INSTRUCTIONS ARE
INDICATED, SUCH SHARES OF TUCKER COMMON STOCK WILL BE VOTED IN FAVOR OF THE
MERGER AND THE MERGER AGREEMENT. A stockholder who has given a proxy may
revoke it at any time prior to its exercise by giving written notice thereof
to the Secretary of Tucker, by signing and returning a later-dated proxy or by
voting in person at the Tucker Special Meeting; however, mere attendance at
the Tucker Special Meeting will not in and of itself have the effect of
revoking the proxy.
Votes cast by proxy or in person at the Tucker Special Meeting will be
tabulated by the inspector(s) of election appointed for the meeting and will
determine whether or not a quorum is present. The presence in person or by
properly executed proxy of the holders of a majority of the issued and
outstanding shares of Tucker Common Stock entitled to vote at the Tucker
Special Meeting is necessary to constitute a quorum at the Tucker Special
Meeting. Abstentions and broker non-votes will be treated as shares that are
present at the Tucker Special Meeting for purposes of determining whether a
quorum exists. In order to be approved, the Merger and the Merger Agreement
must receive the affirmative vote of the holders of two-thirds of the issued
and outstanding shares of Tucker Common Stock entitled to vote on the Merger
and the Merger Agreement. Abstentions and broker non-votes will have the
effect of votes against the approval of the Merger and the Merger Agreement.
Tucker will bear its own cost of solicitation of proxies. Brokerage firms,
fiduciaries, nominees and others will be reimbursed for their out-of-pocket
expenses in forwarding proxy materials to beneficial owners of shares of
Tucker Common Stock held in their names. In addition to the use of the mails,
proxies may be solicited by directors, officers and regular employees of
Tucker, who will not be specifically compensated for such services, by means
of personal calls upon, or telephonic or telegraphic communications with,
stockholders or their
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representatives. In addition, Georgeson & Co. has been engaged by Tucker to
act as proxy solicitors and will receive a fee of $7,500 plus expenses.
THE BOARD OF DIRECTORS OF TUCKER HAS UNANIMOUSLY APPROVED THE MERGER AND THE
MERGER AGREEMENT AND UNANIMOUSLY RECOMMENDS THAT TUCKER STOCKHOLDERS VOTE FOR
APPROVAL OF THE MERGER AND THE MERGER AGREEMENT. SEE "THE MERGER--BACKGROUND
OF THE MERGER," "--REASONS FOR THE MERGER; RECOMMENDATION OF THE BOARD OF
DIRECTORS OF TUCKER" AND "CONFLICTS OF INTEREST ARISING FROM BENEFITS TO AND
OFFICERS AND DIRECTORS OF TUCKER."
COMPARISON OF STOCKHOLDER RIGHTS
At the Effective Time, the stockholders of Tucker will become stockholders
of Bradley. As stockholders of Tucker, their rights are presently governed by
the MGCL, the Tucker Charter and the Tucker Bylaws. As stockholders of
Bradley, their rights will be governed by the MGCL, the Bradley Charter and
the Bradley Bylaws. The Merger will not result in any change in the Bradley
Charter or the Bradley Bylaws.
The following discussion summarizes certain differences between the rights
of stockholders of Bradley and the rights of stockholders of Tucker. This
summary does not purport to be complete and is subject to and qualified in its
entirety by reference to the Tucker Charter, the Tucker Bylaws, the Bradley
Charter, the Bradley Bylaws and the relevant provisions of the MGCL. Copies of
the Tucker Charter, the Tucker Bylaws, the Bradley Charter and the Bradley
Bylaws are incorporated by reference as exhibits to the Registration
Statement.
AMENDMENT OF CHARTER AND BYLAWS
In conformity with the MGCL and the Bradley Charter, the Bradley Charter may
be amended by the Board of Directors, with the approval of the holders of a
majority of all of the votes entitled to be cast on the matter, except that
the Bradley Charter permits the Board of Directors to amend the limitations on
transfer and ownership of stock to the extent the Board deems appropriate to
assure continued qualification as a REIT, without a vote of the stockholders.
The Bradley Bylaws may be amended by the affirmative vote of the holders of a
majority of the shares of Bradley Common Stock or by the Board of Directors
without a vote of the stockholders.
In conformity with the MGCL, the Tucker Charter may be amended by the Board
of Directors, with the approval of the holders of at least two-thirds of all
of the votes entitled to be cast on the matter. The Tucker Bylaws may only be
amended by the Board; provided, however, that the Bylaw provisions which (i)
reserve to the independent directors the right to make all decisions regarding
enforcement of certain agreements and (ii) set forth the number, tenure and
qualification of the Directors, including the requirement that a majority of
the Board be comprised of independent directors may only be amended by the
affirmative vote of stockholders owning a majority of the votes cast at a
stockholders' meeting at which a quorum is present.
Accordingly, stockholders of the Surviving Company will have a greater
ability to amend the Bradley Charter and the Bradley Bylaws than Tucker
stockholders currently have to amend the Tucker Charter and Tucker Bylaws.
REQUIRED VOTE FOR AUTHORIZATION OF CERTAIN ACTIONS
Under the MGCL, unless a corporation's charter provides for a lesser
percentage (but not less than a majority), a proposed consolidation, merger,
share exchange or transfer of all or substantially all of its assets must be
approved by the stockholders of each corporation by the affirmative vote of
two-thirds of all the votes entitled to be cast on the matter. The Bradley
Charter provides that such transactions may be approved by the affirmative
vote of a majority of all the votes entitled to be cast on the matter. The
Tucker Charter contains no such provision and therefore, such transactions
require the approval of two-thirds of all votes entitled to be cast on the
matter.
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Thus, a lesser vote of the stockholders of the Surviving Company is required
to authorize a proposed consolidation, merger, share exchange or transfer of
all or substantially all of its assets than is currently required for Tucker
stockholders.
BOARD OF DIRECTORS
The Bradley Bylaws provide that the number of directors of Bradley may be
established by the Board of Directors but may not be fewer than the minimum
number required by Maryland law. Directors of Bradley hold office until their
successors are duly elected and qualified or until their death, resignation or
removal by the affirmative vote of the holders of a majority of the
outstanding shares of Bradley Common Stock. The Bradley Charter provides that
a director may be removed from office only for cause and only by the
affirmative vote of at least a majority of the votes entitled to be cast in
the election of directors.
Pursuant to the terms of the Bradley Charter, the directors are divided into
three classes with the term of office of one class expiring each year. As the
term of each class expires, directors in that class will be elected for a term
of three years and until their successors are duly elected and qualified.
The Tucker Bylaws provide that the number of directors of Tucker may be
established by the Board of Directors but may not be fewer than the minimum
number required by Maryland law nor more than nine. The Tucker Bylaws also
require a majority of the Board of Directors to be independent. These
provisions may only be amended by a vote of a majority of all of the votes
cast at a stockholders meeting at which a quorum is present. Pursuant to the
terms of the Tucker Charter, each director will hold office for a one-year
term expiring at the annual meeting of stockholders to be held the following
year and until his successor is duly elected and qualified.
The Tucker Charter provides that a director may be removed only for cause
and only by the affirmative vote of at least two-thirds of the votes entitled
to be cast for the election of directors. This provision, when coupled with
the provision in the Bylaws authorizing the Board to fill vacant
directorships, precludes stockholders from removing incumbent directors and
filling the vacancies created by the removal with their own nominees except
upon a substantial affirmative vote.
This staggered Board provision prevents stockholders from voting on the
election of all directors at each annual meeting. The existence of a staggered
Board may have the effect of delaying or deferring a change in control of the
Surviving Company or removal of incumbent management.
SPECIAL MEETINGS
The Bradley Bylaws provide that the chairman, if any, the president or a
majority of the Board of Directors may call a special meeting of Bradley's
stockholders. A special meeting may also be called by the secretary upon the
written request of stockholders entitled to cast 25% or more of the votes
entitled to be cast at such meeting.
The Tucker Bylaws provide that the chairman, if any, the president or the
Board of Directors may call a special meeting of Tucker's stockholders. A
special meeting may also be called by any stockholders who hold in the
aggregate not less than 10% of the outstanding shares of Tucker Common Stock.
Because a higher percentage of stockholders is required to call a special
meeting of Bradley's stockholders than is currently provided for in Tucker's
By-laws, the Tucker stockholders, upon conversion of their shares into Bradley
Common Stock in connection with the Merger, will have a lesser ability to call
special meetings of stockholders.
BUSINESS COMBINATIONS
Under the MGCL, certain "business combinations" (including a merger,
consolidation, share exchange, or, in certain circumstances, an asset transfer
or issuance or reclassification of equity securities) between a Maryland
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corporation and any person who beneficially owns 10% or more of the voting
power of the corporation's shares or an affiliate of the corporation who, at
any time within the two-year period prior to the date in question, was the
beneficial owner of 1% or more of the voting power of the then-outstanding
voting stock of the corporation (an "Interested Stockholder") or an affiliate
thereof are prohibited for five years after the most recent date on which the
Interested Stockholder becomes an Interested Stockholder. Thereafter, any such
business combination must be recommended by the board of directors of the
corporation and approved by the affirmative vote of at least (i) 80% of the
votes entitled to be cast by holders of outstanding voting shares of the
corporation and (ii) two-thirds 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 (or with whose affiliate) the business
combination is to be effected, unless, among other conditions, the
corporation's common stockholders 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 its shares.
These provisions of Maryland law do not apply, however, to business
combinations that are approved or exempted by the board of directors of the
corporation prior to the time that the Interested Stockholder becomes an
Interested Stockholder.
The Board of Directors of Tucker has exempted from these provisions of the
MGCL any business combination with Kenneth Tucker and Richard Tucker (the
"Tuckers") or any person acting in concert or as a group with the Tuckers.
Bradley has not made any exemptions from these provisions of the MGCL other
than for the Merger.
RESTRICTIONS ON THE OWNERSHIP, TRANSFER OR ISSUANCE OF SHARES
For a company to qualify as a REIT under the Code, among other things, not
more than 50% in value of its outstanding capital stock may be owned, directly
or indirectly, by five or fewer individuals (defined in the Code to include
certain entities) during the last half of a taxable year (other than the first
year), and such capital stock must be beneficially owned by 100 or more
persons during at least 335 days of a taxable year of 12 months (other than
the first year) or during a proportionate part of a shorter taxable year. The
Bradley Charter contains provisions, designed to ensure that Bradley remains a
qualified REIT, that generally limit any holder from owning, or being deemed
to own by virtue of the attribution provisions of the Code, shares of capital
stock having a value that is more than 9.8% (the "Ownership Limit") of the
value of all outstanding capital stock of Bradley. The Bradley Charter
provides that each person (which includes natural persons, corporations,
trusts, partnerships and other entities) shall be deemed to own stock that
such person (i) actually owns, (ii) constructively owns after applying
attribution rules specified in the Code, and (iii) has the right to acquire
upon exercise of any options or warrants or conversion of any convertible
securities held by such person. The fact that certain affiliated entities,
such as separate mutual funds advised by the same investment adviser, may own
more than 9.8% of the value of all outstanding capital stock in the aggregate
will not of itself result in the Ownership Limit being exceeded, merely
because a single person may be considered to be the "beneficial owner" of such
stock for purposes of Section 13(g) of the Exchange Act. Bradley's Board of
Directors may waive the Ownership Limit if evidence satisfactory to the Board
of Directors and Bradley's tax counsel is presented that the changes in
ownership will not then or in the future jeopardize Bradley's status as a
REIT.
The Bradley Charter provides that any transfer of Bradley capital stock or
any security convertible into capital stock that would create direct or
indirect ownership of capital stock in excess of the Ownership Limit or that
would result in the disqualification of Bradley as a REIT, including any
transfer that results in Bradley being "closely held" within the meaning of
Section 856(h) of the Code, shall be null and void, and the intended
transferee will acquire no rights to the capital stock. Shares of capital
stock owned, or deemed to be owned, or transferred to a stockholder in excess
of the Ownership Limit will automatically be exchanged for shares of Excess
Stock (as described below) that will be transferred, by operation of law, to a
trustee (to be named by the Board of Directors of Bradley, but unaffiliated
with Bradley) as trustee for the exclusive benefit (except to the extent
described below) of one or more charitable beneficiaries designated from time
to time by the Board of Directors. The Excess Stock held in trust will be
considered as issued and outstanding shares of stock of Bradley, will be
entitled to receive distributions declared by Bradley and may be voted by the
trustee for the exclusive benefit of the charitable beneficiary. Any dividend
or distribution paid to a purported transferee of Excess Stock
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prior to the discovery by Bradley that capital stock has been transferred in
violation of the provisions of the Bradley Charter (a "prohibited transfer")
shall be repaid to Bradley upon demand and thereupon paid over by Bradley to
the trustee. Any votes of holders of shares of capital stock purported to have
been cast by a purported transferee prior to such discovery of a prohibited
transfer will be retroactively deemed not to have been cast, but said
retroactive nullification of the vote of the relevant shares of capital stock
shall not adversely affect the rights of any person (other than the purported
transferee) who has relied in good faith upon the effectiveness of the matter
that was the subject of the stockholder action as to which such votes were
cast.
The Bradley Charter provides that Excess Stock is not transferable. Subject
to the redemption rights of Bradley discussed below, the trustee of the trust
may, however, sell and transfer the interest in the trust to a transferee in
whose hands the interest in the trust representing Excess Stock would not be
an interest in Excess Stock, and upon such sale the shares of Excess Stock
represented by the sold interest shall be automatically exchanged for shares
of capital stock of the class that was originally exchanged into such Excess
Stock. Upon such sale, the trustee shall distribute to the purported
transferee only so much of the sales proceeds as is not more than the price
paid by the purported transferee in the prohibited transfer that resulted in
the exchange of Excess Stock for the capital stock purported to have been
transferred (or, if the purported transferee received such capital stock by
gift, devise or otherwise without giving value for such stock, only an amount
that does not exceed the market price for such stock, as determined in the
manner set forth in the Bradley Charter, at the time of the prohibited
transfer), and the trustee shall distribute all remaining proceeds from such
sale to the charitable beneficiary.
In addition to the foregoing transfer restrictions, Bradley will have the
right, for a period of 90 days during the time any Excess Stock is held by the
trustee, to purchase all or any portion of the Excess Stock from the trustee
for the lesser of the price paid for the capital stock by the original
purported transferee or the market price of the capital stock on the date
Bradley exercises its options to purchase. Upon any such purchase by Bradley,
the trustee shall distribute the purchase price to the original purported
transferee. The 90-day period begins on the date on which Bradley receives
written notice of the prohibited transfer or other event resulting in the
exchange of capital stock for Excess Stock.
If the foregoing transfer restrictions are determined to be void or invalid
by virtue of any legal decision, statute, rule or regulation, then the
intended transferee of any Excess Stock may be deemed, at the option of
Bradley, to have acted as an agent on behalf of Bradley in acquiring the
Excess Stock and to hold the Excess Stock on behalf of Bradley.
These restrictions will not preclude settlement of transactions on the NYSE
or any other stock exchange on which capital stock of Bradley is listed. The
foregoing restrictions on transferability and ownership also will not apply if
Bradley's Board of Directors determines that it is no longer in the best
interests of Bradley to continue to qualify as a REIT.
The Bradley Charter requires that, upon demand by Bradley, each stockholder
and each proposed transferee of capital stock will disclose to Bradley in
writing any information with respect to the direct, indirect and constructive
ownership of shares of stock as Bradley's Board of Directors deems necessary
to comply with the provisions of the Code applicable to REITs, to comply with
the requirements of any taxing authority or governmental agency or to
determine any such compliance.
The Tucker Charter contains ownership and transfer restrictions generally
comparable to those in the Bradley Charter, except that (i) no person, other
than the Tuckers, may own, or be deemed to own by virtue of the attribution
provision of the Code, more than 7% of the value of the issued and outstanding
stock of Tucker and (ii) the Tuckers and their affiliates may not own,
directly or indirectly, more than 21% of the value of the issued and
outstanding stock of Tucker.
The ownership restrictions provided by the Bradley Charter and the Tucker
Charter may have the effect of delaying, deferring or preventing the
acquisition of control of Bradley or Tucker. However, the Bradley Charter
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provides that the Ownership Limit shall not apply to shares of capital stock
acquired pursuant to an all cash tender offer for all of the outstanding
shares of capital stock in conformity with applicable laws where not less than
two-thirds of the outstanding shares of capital stock (not including
securities held by the tender offeror and/or its affiliates and associates)
are tendered and accepted pursuant to such tender offer and where the tender
offeror commits in such tender offer promptly after the tender offeror's
purchase of the tendered stock, to give any non-tendering stockholders a
reasonable opportunity to put their capital stock to the tender offeror at a
price not less than that paid pursuant to the tender offer.
ADVANCE NOTICE FOR STOCKHOLDER PROPOSALS AND DIRECTOR NOMINATIONS
The Bradley Bylaws provide that any stockholder of record wishing to
nominate a director or have a stockholder proposal considered at an annual
meeting (except for stockholder proposals included in Bradley's proxy
materials pursuant to Rule 14a-8 under the Exchange Act) must provide written
notice and certain supporting documentation to Bradley relating to the
nomination or proposal not less than 75 days nor more than 150 days prior to
the anniversary date of the prior year's annual meeting or special meeting in
lieu thereof (the "Anniversary Date"). In the event that the annual meeting is
called for a date more than seven calendar days before the Anniversary Date,
stockholders generally must provide written notice within 20 calendar days
after the date on which notice of the meeting is mailed to stockholders.
The purpose of requiring stockholders to give Bradley advance notice of
nominations and other business is to afford the Board of Directors a
meaningful opportunity to consider the qualifications of the proposed nominees
or the advisability of the other proposed business and, to the extent deemed
necessary or desirable by the Board of Directors, to inform stockholders and
make recommendations about the qualifications or business, as well as to
provide a more orderly procedure for conducting meetings of stockholders.
Although Bradley's Bylaws do not give the Board of Directors any power to
disapprove stockholder nominations for the election of directors or proposals
for action, they may have the effect of precluding a contest for the election
of directors or the consideration of stockholder proposals if the proper
procedures are not followed, and of delaying or deferring a third party from
conducting a solicitation of proxies to elect its own slate of directors or to
approve its own proposal, without regard to whether consideration of the
nominees or proposals might be harmful or beneficial to Bradley and its
stockholders.
The Tucker Bylaws provide that any stockholder of record wishing to nominate
a director or to make a stockholder proposal must deliver a notice and certain
supporting documentation to the secretary or Tucker not less than 60 days nor
more than 90 days prior to the first anniversary of the preceding year's
annual meeting; provided, however, that in the event that the date of the
annual meeting is advanced by more than 30 days or delayed by more than 60
days from such anniversary date, notice by the stockholder to be timely must
be so delivered not earlier than the 90th day prior to such annual meeting and
not later than the close of business on the later of the 60th day prior to
such annual meeting or the tenth day following the day on which public
announcement of the date of such meeting is first made. Such stockholder's
notice shall set forth (i) as to each person whom the stockholder proposes to
nominate for election or reelection as a director all information relating to
such person that is required to be disclosed in solicitations of proxies for
election of directors, or is otherwise required, in each case pursuant to
Regulation 14A under the Exchange Act (including such person's written consent
to being named in the proxy statement as a nominee and to serving as a
director if elected); (ii) as to any other business that the stockholder
proposes to bring before the meeting, a brief description of the business
desired to be brought before the meeting, the reasons for conducting such
business at the meeting and any material interest in such business of such
stockholder and of the beneficial owner, if any, on whose behalf the proposal
is made; and (iii) as to the stockholder giving the notice and the beneficial
owner, if any, on whose behalf the nomination or proposal is made, (x) the
name and address of such stockholder, as they appear on Tucker's books, and of
such beneficial owner, and (y) the class and number of shares of stock of
Tucker which are owned beneficially and of record by such stockholder and such
beneficial owner.
Because of the greater amount of time in which stockholder proposals or
director nominations may be made under the Bradley Bylaws, the Tucker
stockholders, upon conversion of their shares into Bradley Common Stock in
connection with the Merger, will have a longer period of time in which to make
such proposals or nominations.
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CONTROL SHARE ACQUISITIONS
The MGCL 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 entitled to be cast on the
matter, excluding shares of stock owned by the acquiror or by officers or
directors who are employees of the corporation. "Control shares" are voting
shares of stock which, if aggregated with all other such shares of stock
previously acquired by the acquiror, or in respect of which the acquiror is
able to exercise or direct the exercise of voting power except solely by
virtue of a revocable proxy, 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
exceptions.
A person who has made or proposes to make a control share acquisition, upon
satisfaction of certain conditions (including an undertaking to pay expenses
and delivery of an "acquiring person statement"), may compel the corporation's
board of directors to call a special meeting of stockholders to be held within
50 days of demand to consider the voting rights of the shares. If no request
for a meeting is made, the corporation may itself present the question at any
stockholders meeting.
Unless the articles or bylaws provide otherwise, if voting rights are not
approved at the meeting or if the acquiring person does not deliver an
acquiring person statement within ten (10) days following a control share
acquisition 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 determined,
without regard to the absence of voting rights for the control shares, as of
the date of the last control share acquisition or of any meeting of
stockholders at which the voting rights of such shares are considered and not
approved. Moreover, unless the articles or bylaws provide otherwise, if voting
rights for control shares are approved at a stockholders' meeting and the
acquiror becomes entitled to exercise or direct the exercise of a majority or
more of all voting power other stockholders may exercise appraisal rights. The
fair value of the shares as determined for purposes of such appraisal rights
may not be less than the highest price per share paid by the acquiror in the
control share acquisition.
The control share acquisition statute does not apply to shares acquired in a
merger, consolidation or share exchange if the corporation is a party to the
transaction, or to acquisitions approved or exempted by the articles or bylaws
of the corporation.
Pursuant to the statute, Tucker has exempted control share acquisitions
involving "Existing Holders," including the Tuckers, their affiliates and
persons acting in concert with either of the Tuckers, that are not prohibited
or restricted by the terms of the Tucker Charter, and the prohibition on
voting control shares will not apply to the Tuckers, their affiliates and
persons acting in concert with either of the Tuckers. An "Existing Holder" is
defined in the Tucker Charter as: (i) any Person (as defined in the Tucker
Charter) who is, or would be upon the exchange of TOP Units, the owner of
Equity Stock (defined as either Tucker Common Stock or preferred stock of
Tucker) in excess of the Ownership Limit set forth in the Tucker Charter, and
(ii) any Person to whom an Existing Holder transfers ownership of equity stock
causing such transferee to own equity stock in excess of the Ownership Limit.
All other stockholders are subject to the terms of the control share
acquisition statute.
The Bradley Bylaws contain a provision exempting any and all acquisitions of
Bradley Common Stock from the control share provision of the MGCL, although
there can be no assurance that the provision will not be amended or repealed
in the future.
DISSOLUTION
The MGCL and the Bradley Charter permit the dissolution of Bradley by (i)
the affirmative resolution of a majority of the entire Board of Directors
declaring such dissolution to be advisable and directing that the
103
<PAGE>
proposed dissolution be submitted for consideration at an annual or special
meeting of stockholders, and (ii) upon proper notice, stockholder approval by
the affirmative vote of the holders of a majority of all of the votes entitled
to be cast on the matter.
The dissolution of Tucker would require a similar resolution of Tucker's
Board of Directors and approval by the affirmative vote of the holders of not
less than two-thirds of all of the votes entitled to be cast on the matter.
Thus, a lesser vote of the stockholders of the Surviving Company is required
to authorize the dissolution of the Surviving Company than is currently
required for Tucker stockholders.
OTHER MATTERS
It is not expected that any matters other than those described in this Joint
Proxy Statement/Prospectus will be brought before the Bradley Special Meeting
or the Tucker Special Meeting. If any other matters are presented, however, it
is the intention of the persons named in the Bradley proxy and Tucker proxy to
vote the proxy in accordance with their best judgment.
LEGAL MATTERS
Certain legal matters in connection with the Merger and the validity of the
shares of Bradley Common Stock to be issued pursuant to the Merger will be
passed upon for Bradley by Goodwin, Procter & Hoar (a partnership including
professional corporations), Boston, Massachusetts. William B. King, whose
professional corporation is a partner in Goodwin, Procter & Hoar, is Secretary
of Bradley and is the beneficial owner of approximately 8,000 shares of
Bradley Common Stock. Certain legal matters in connection with the Merger will
be passed upon for Tucker by Mayer, Brown & Platt, Chicago, Illinois.
EXPERTS
The financial statements of Bradley as of December 31, 1994 and 1993, and
for each of the years in the three-year period ended December 31, 1994 and the
financial statement schedule as of December 31, 1994, incorporated by
reference in this Joint Proxy Statement/Prospectus have been audited by KPMG
Peat Marwick LLP, independent certified public accountants, as indicated in
their reports with respect thereto, and are incorporated by reference herein
in reliance upon the authority of said firm as experts in accounting and
auditing.
The financial statements of Tucker as of December 31, 1994 and 1993, and for
each of the years in the three-year period ended December 31, 1994 and the
financial statement schedule as of December 31, 1994, incorporated by
reference in this Joint Proxy Statement/Prospectus have been audited by
Coopers & Lybrand L.L.P., independent certified public accountants, as
indicated in their reports with respect thereto, and are incorporated by
reference herein in reliance upon the authority of said firm as experts in
accounting and auditing.
STOCKHOLDER PROPOSALS
Any Bradley stockholder who wishes to submit a proposal for presentation at
Bradley's 1996 Annual Meeting of Stockholders must have submitted the proposal
to Bradley Real Estate, Inc., 699 Boylston Street, Boston, Massachusetts
02116, Attention: Secretary. Such proposal must have been received not later
than November 30, 1995 for inclusion, if appropriate, in Bradley's proxy
statement and form of proxy relating to its 1996 Annual Meeting.
Any Tucker stockholder who wishes to submit a proposal for presentation at
Tucker's 1996 Annual Meeting of Stockholders (which would be held only if the
Merger has not been consummated prior to the date the meeting is to be held)
must submit the proposal to Tucker Properties Corporation, 40 Skokie
Boulevard, Suite 600, Northbrook, Illinois 60062, Attention: Shareholder
Relations. Such proposal must be received not later than January 31, 1996 for
inclusion, if appropriate, in Tucker's proxy statement and form of proxy
relating to its 1996 Annual Meeting.
104
<PAGE>
ANNEX A
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
AGREEMENT AND PLAN OF MERGER
BETWEEN
BRADLEY REAL ESTATE, INC.
AND
TUCKER PROPERTIES CORPORATION
DATED AS OF OCTOBER 30, 1995
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<C> <S> <C>
1. The Merger and Amendment of Tucker Partnership Agreement............. A-1
1.1 The Merger..................................................... A-1
1.2 The Closing.................................................... A-1
1.3 Effective Time................................................. A-1
1.4 Amendment of Tucker Operating Limited Partnership Agreement.... A-2
1.5 Transfer of Securities of Tucker Management Corporation........ A-2
1.6 Amendments of Governing Documents of Tucker Subsidiaries....... A-2
1.7 Release and Termination........................................ A-2
1.8 Severance Pay Plan and Agreements.............................. A-2
2. Charter and Bylaws of the Surviving Corporation...................... A-2
2.1 Charter........................................................ A-2
2.2 Bylaws......................................................... A-3
3. Directors and Officers of the Surviving Corporation.................. A-3
3.1 Directors...................................................... A-3
3.2 Officers....................................................... A-3
4. Tucker Stock......................................................... A-3
4.1 Conversion of the Tucker Stock................................. A-3
4.2 Exchange of Certificates Representing Tucker Common Stock...... A-4
4.3 Return of Exchange Fund........................................ A-5
5. Representations and Warranties of Tucker............................. A-6
5.1 Existence; Good Standing; Authority; Compliance With Law....... A-6
5.2 Authorization, Validity and Effect of Agreements............... A-6
5.3 Capitalization................................................. A-7
5.4 Subsidiaries................................................... A-8
5.5 Other Interests................................................ A-8
5.6 No Violation................................................... A-9
5.7 SEC Documents.................................................. A-9
5.8 Litigation..................................................... A-10
5.9 Absence of Certain Changes..................................... A-10
5.10 Taxes.......................................................... A-10
5.11 Books and Records.............................................. A-11
5.12 Properties..................................................... A-11
5.13 Leases......................................................... A-12
5.14 Rents.......................................................... A-13
5.15 Environmental Matters.......................................... A-14
5.16 Employee Benefit Plans......................................... A-14
5.17 Labor Matters.................................................. A-15
5.18 No Brokers..................................................... A-15
5.19 Opinion of Financial Advisor................................... A-15
5.20 Bradley Share Ownership........................................ A-15
5.21 Related Party Transactions..................................... A-15
5.22 Contracts and Commitments...................................... A-15
5.23 Development Rights............................................. A-16
5.24 Certain Payments Resulting From Transactions................... A-16
5.25 Indemnification Claims......................................... A-16
5.26 Disclosure..................................................... A-16
5.27 Status of Holden Court and Holden Court Escrow................. A-16
</TABLE>
(i)
<PAGE>
<TABLE>
<CAPTION>
PAGE
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<C> <S> <C>
5.28 Tenant Improvements............................................ A-17
5.29 Status of Options to Purchase Real Property.................... A-17
5.30 Definition of Tucker's Knowledge............................... A-17
6. Representations and Warranties of Bradley............................ A-17
6.1 Existence; Good Standing; Authority; Compliance With Law....... A-17
6.2 Authorization, Validity and Effect of Agreements............... A-18
6.3 Capitalization................................................. A-18
6.4 Subsidiaries................................................... A-18
6.5 Other Interests................................................ A-18
6.6 No Violation................................................... A-19
6.7 SEC Documents.................................................. A-19
6.8 Litigation..................................................... A-20
6.9 Absence of Certain Changes..................................... A-20
6.10 Taxes.......................................................... A-20
6.11 Books and Records.............................................. A-21
6.12 Properties..................................................... A-21
6.13 Environmental Matters.......................................... A-22
6.14 Employee Benefit Plans......................................... A-22
6.15 Labor Matters.................................................. A-23
6.16 No Brokers..................................................... A-23
6.17 Opinion of Financial Advisor................................... A-23
6.18 Tucker Stock Ownership......................................... A-23
6.19 Related Party Transactions..................................... A-23
6.20 Contracts and Commitments...................................... A-23
6.21 Development Rights............................................. A-24
6.22 Bradley Common Stock........................................... A-24
6.23 Convertible Securities......................................... A-24
6.24 Disclosure..................................................... A-24
6.25 Definition of Bradley's Knowledge.............................. A-24
7. Covenants............................................................ A-24
7.1 Acquisition Proposals.......................................... A-24
7.2 Conduct of Businesses.......................................... A-25
7.3 Meetings of Stockholders....................................... A-27
7.4 Filings; Other................................................. A-27
7.5 Inspection of Records.......................................... A-28
7.6 Publicity...................................................... A-28
7.7 Registration Statement......................................... A-28
7.8 Listing Application............................................ A-29
7.9 Further Action................................................. A-29
7.10 Affiliates of Tucker........................................... A-29
7.11 Expenses....................................................... A-29
7.12 Indemnification................................................ A-29
7.13 Reorganization................................................. A-31
7.14 Certain Benefits............................................... A-31
7.15 Dividends...................................................... A-32
7.16 IRS Private Letter Ruling...................................... A-32
8. Conditions........................................................... A-33
8.1 Conditions to Each Party's Obligation to Effect the Merger..... A-33
8.2 Conditions to Obligations of Tucker to Effect the Merger....... A-33
8.3 Conditions to Obligation of Bradley to Effect the Merger....... A-34
</TABLE>
(ii)
<PAGE>
<TABLE>
<CAPTION>
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<C> <S> <C>
9. Termination.......................................................... A-35
9.1 Termination................................................... A-35
9.2 Effect of Termination......................................... A-36
9.3 Payment of Termination Amount or Expenses..................... A-37
9.4 Extension; Waiver............................................. A-38
10. General Provisions................................................... A-38
10.1 Nonsurvival of Representations, Warranties and Agreements..... A-38
10.2 Notices....................................................... A-38
10.3 Assignment; Binding Effect; Benefit........................... A-38
10.4 Entire Agreement.............................................. A-39
10.5 Confidentiality............................................... A-39
10.6 Amendment..................................................... A-40
10.7 Governing Law................................................. A-40
10.8 Counterparts.................................................. A-40
10.9 Headings...................................................... A-40
10.10 Interpretation................................................ A-40
10.11 Waivers....................................................... A-40
10.12 Incorporation................................................. A-40
10.13 Severability.................................................. A-40
10.14 Enforcement of Agreement...................................... A-41
10.15 Certain Definitions........................................... A-41
10.16 Schedules..................................................... A-41
</TABLE>
(iii)
<PAGE>
EXHIBIT A-- Form of Amended and Restated Agreement of Limited Partnership
Bradley Operating Limited Partnership Agreement
EXHIBIT B-1-- Consents of Limited Partner of Tucker Operating Limited
Partnership
EXHIBIT B-2-- Consent of General Partner of Tucker Operating Limited
Partnership
EXHIBIT B-3-- Acknowledgment of Bradley Real Estate, Inc. to the Amended and
Restated Agreement of Limited Partnership of Tucker Operating
Limited Partnership
EXHIBIT C-- Intentionally Omitted
EXHIBIT D-- Form of Affiliate Letter
EXHIBIT E-- Form of Tenant's Estoppel Certificate
EXHIBIT F-- Purchase and Sale of Securities
EXHIBIT G-- Tucker Properties Corporation Severance Pay Plan
EXHIBIT H-1-- Form of First Amendment to Indemnification Agreement
EXHIBIT H-2-- Acknowledgment of Bradley Real Estate, Inc. to the First
Amendment of the Indemnification Agreements
EXHIBIT I-- Form of Seventh Amendment to Agreement of Limited Partnership
Tucker Operating Limited Partnership Agreement
EXHIBIT J-- Severance Agreements
EXHIBIT K-- Consulting Agreement with Kenneth Tucker
SCHEDULES
Schedule 1.7 Contracts to be Released
Schedule 5.2 Ancillary Agreements
Schedule 7.12 Tucker's Directors' and Officers' Insurance Coverage
Schedule 8.1(f) Required Consents
Schedule 8.3(f) Leases and REA Agreements Requiring Estoppel Certificates
(iv)
<PAGE>
AGREEMENT AND PLAN OF MERGER
This AGREEMENT AND PLAN OF MERGER (this "Agreement") is made and entered
into as of October 30, 1995, between Bradley Real Estate, Inc., a Maryland
corporation ("Bradley"), and Tucker Properties Corporation, a Maryland
corporation ("Tucker").
RECITALS
A. The Board of Directors of Bradley and the Board of Directors of Tucker
each have determined that a business combination between Bradley and Tucker is
in the best interests of their respective companies and stockholders and
presents an opportunity for their respective companies to achieve long-term
strategic and financial benefits, and accordingly have agreed to effect the
merger provided for herein upon the terms and subject to the conditions set
forth herein.
B. It is intended that the merger provided for herein, for federal income
tax purposes, shall qualify as a reorganization within the meaning of Section
368(a)(1)(A) of the Internal Revenue Code of 1986, as amended (the "Code"),
and for financial accounting purposes shall be accounted for as a "purchase."
C. Bradley and Tucker have each received a fairness opinion from their
respective financial advisors relating to the transactions contemplated hereby
as more fully described herein.
D. Bradley and Tucker desire to make certain representations, warranties and
agreements in connection with the merger.
NOW, THEREFORE, in consideration of the foregoing, and of the
representations, warranties, covenants and agreements contained herein, the
parties hereto hereby agree as follows:
ARTICLE 1
1. The Merger and Amendment of Tucker Partnership Agreement.
1.1 The Merger. Subject to the terms and conditions of this Agreement, at
the Effective Time (as defined in Section 1.3 hereof), Tucker shall be merged
with and into Bradley in accordance with this Agreement and the separate
corporate existence of Tucker shall thereupon cease (the "Merger"). Bradley
shall be the surviving corporation in the Merger (sometimes hereinafter
referred to as the "Surviving Corporation"). The Merger shall have the effects
specified in Section 3-114 of the Maryland General Corporation Law (the
"MGCL").
1.2 The Closing. Subject to the terms and conditions of this Agreement, the
closing of the Merger (the "Closing") shall take place (a) at the offices of
Goodwin, Procter & Hoar, Exchange Place, Boston, Massachusetts, at 9:00 a.m.,
local time, on the first business day immediately following the day on which
the last of the conditions set forth in Article 8 shall be fulfilled or waived
in accordance herewith or (b) at such other time, date or place as the parties
hereto may agree. The date on which the Closing occurs is hereinafter referred
to as the "Closing Date."
1.3 Effective Time. If all the conditions to the Merger set forth in Article
8 shall have been fulfilled or waived in accordance herewith and this
Agreement shall not have been terminated as provided in Article 9, the parties
hereto shall cause Articles of Merger satisfying the requirements of the MGCL
to be properly executed, verified and delivered for filing in accordance with
the MGCL on the Closing Date. The Merger shall become effective upon the
acceptance for record of the Articles of Merger by the State Department of
Assessments and Taxation of Maryland in accordance with the MGCL or at such
later time which the parties hereto shall have agreed upon and designated in
such filing in accordance with applicable law as the effective time of the
Merger (the "Effective Time").
<PAGE>
1.4 Amendment of Tucker Operating Limited Partnership Agreement. As a result
of the consummation of the Merger, Bradley will acquire the general
partnership interests and those limited partnership units ("TOP Units") in the
Tucker Operating Limited Partnership, a Delaware limited partnership ("TOP"),
which are currently owned by Tucker. In connection with the consummation of
the Merger, the Limited Partnership Agreement of TOP (the "TOP Partnership
Agreement") will be amended and restated substantially in the form of Exhibit
A hereto. The execution of such agreement by Tucker will be authorized by a
majority of Tucker's independent directors who are not affiliates of any of
the Limited Partners (as such term is defined in the TOP Partnership
Agreement). Concurrently with the execution of this Agreement, Tucker and
Limited Partners of TOP holding at least 386,984 TOP Units will execute an
agreement in the form of Exhibit B hereto consenting to, among other things,
the Merger and the amendment and restatement, effective as of the Effective
Time, of the TOP Partnership Agreement.
1.5 Transfer of Securities of Tucker Management Corporation. In connection
with the consummation of the Merger, a designee or designees of Bradley will
acquire from Kenneth Tucker and Richard Tucker (collectively, the "Tuckers")
all of the outstanding securities of Tucker Management Corporation ("TMC")
(other than securities owned by TOP). Concurrently with the execution of this
Agreement, the Tuckers will execute an agreement in the form of Exhibit F
hereto agreeing, among other things, to such transfer, effective as of the
Effective Time.
1.6 Amendments of Governing Documents of Tucker Subsidiaries. In connection
with the Closing, the Articles of Incorporation, Bylaws, partnership
agreements and equivalent documents for the Tucker Subsidiaries (as defined in
Section 5.1 hereof) will be amended to change the name of the entity (and, six
months after the Effective Time, no such entity shall use the name "Tucker")
and to make certain other changes to such documents in order to reflect the
Merger and the transactions contemplated by this Agreement. Tucker and the
Tucker Subsidiaries will take all actions which are necessary to effectuate
such amendments and will use their best efforts to cause all of the
stockholders in any Tucker Subsidiary and all of the partners in any Tucker
Subsidiary to approve such amendments and to take such other actions to
effectuate such amendments and the transactions contemplated by this Agreement
as may be reasonably requested by Bradley.
1.7 Release and Termination. Concurrently with the execution of this
Agreement, the parties listed on Schedule 1.7 hereto will execute releases
providing for, among other things, the termination of all contracts and
agreements listed on Schedule 1.7 hereto. Pursuant to such releases, all such
contracts shall be terminated and released, effective as of the Effective
Time, and the parties to such contracts agree to waive any and all rights they
may have under such contracts or agreements.
1.8 Severance Pay Plan and Agreements. In connection with the execution of
this Agreement, Tucker has adopted the Tucker Properties Corporation Severance
Pay Plan (the "Severance Plan") for its employees, as set forth in Exhibit G
hereto, and, prior to the Effective Time, Tucker will use its reasonable best
efforts to enter into individual employment or severance agreements (the
"Severance Agreements") with the following employees: Kenneth Tucker, Richard
Tucker, Harold Eisenberg, Norris Eber, Larry Tucker and William Karnes, in the
respective forms set forth in Exhibit J hereto and a consulting agreement with
Kenneth Tucker in the form set forth in Exhibit K hereto. Bradley agrees that
after the Effective Time, it will assume and be bound by the terms of the
Severance Plan and Severance Agreements. Prior to the Effective Time, and as
soon as practicable after this Agreement is signed, Tucker shall supply
Bradley with the calculation of the actual severance payments that would be
payable pursuant to the Severance Agreements assuming the covered individual's
employment terminated in a Covered Termination (as defined in the Severance
Agreements).
ARTICLE 2
2. Charter and Bylaws of the Surviving Corporation.
2.1 Charter. The Charter (as defined in the MGCL) of Bradley in effect
immediately prior to the Effective Time shall be the Charter of the Surviving
Corporation, until duly amended in accordance with applicable law.
A-2
<PAGE>
2.2 Bylaws. The Bylaws of Bradley in effect immediately prior to the
Effective Time shall be the Bylaws of the Surviving Corporation, until duly
amended in accordance with applicable law.
ARTICLE 3
3. Directors and Officers of the Surviving Corporation.
3.1 Directors. The directors of Bradley immediately prior to the Effective
Time shall be the directors of the Surviving Corporation as of the Effective
Time.
3.2 Officers. The officers of Bradley immediately prior to the Effective
Time shall be the officers of the Surviving Corporation as of the Effective
Time.
ARTICLE 4
4. Tucker Stock.
4.1 Conversion of the Tucker Stock.
(a) At the Effective Time, each share of the Common Stock, $.01 par value
per share, of Bradley ("Bradley Common Stock") outstanding immediately prior
to the Effective Time shall remain outstanding and shall represent one share
of the Common Stock, $.01 par value per share, of the Surviving Corporation.
(b) At the Effective Time, each share of Common Stock, par value $.001 per
share, of Tucker (the "Tucker Common Stock") issued and outstanding
immediately prior to the Effective Time (other than those shares of Tucker
Common Stock to be canceled pursuant to Section 4.1(d)) shall, by virtue of
the Merger and without any action on the part of Tucker, Bradley or the
holders of any of the securities of any of these corporations, be converted
into the right to receive 0.665 of a share of Bradley Common Stock; provided,
however, that in the event that at the Effective Time the Closing Price (as
such term is hereinafter defined) of a share of Bradley Common Stock is less
than $16 per share but more than $15.50 per share, then each share of Tucker
Common Stock will be converted into the right to receive that percentage of a
share of Bradley Common Stock (determined to the nearest one-thousandth of a
share) as is determined by dividing $10.64 by the Closing Price; and provided,
further, that in the event that at the Effective Time, the Closing Price of a
share of Bradley Common Stock is $15.50 per share or less, then each share of
Tucker Common Stock will be converted into the right to receive 0.686 of a
share of Bradley Common Stock (the applicable percentage of a share of Bradley
Common Stock to be issued upon such conversion is hereinafter referred to as
the "Exchange Ratio"); and provided further that if between the date of this
Agreement and the Effective Time the outstanding shares of Bradley Common
Stock shall have been changed into a different number of shares or a different
class or series, by reason of any stock dividend, subdivision,
reclassification, recapitalization, split, combination or exchange of shares,
the Exchange Ratio shall be correspondingly adjusted to reflect such stock
dividend, subdivision, reclassification, recapitalization, split, combination
or exchange of shares. For purposes of this Agreement, the term "Closing
Price" shall mean the average per share closing price of Bradley Common Stock
as reported on the New York Stock Exchange ("NYSE") over the twenty (20)
trading days immediately preceding the fifth (5th) day prior to the date of
the Closing.
(c) As a result of the Merger and without any action on the part of the
holder thereof, at the Effective Time, all shares of Tucker Common Stock shall
cease to be outstanding, shall be canceled and retired and shall cease to
exist and each holder of a certificate (a "Certificate") representing any
shares of Tucker Common Stock shall thereafter cease to have any rights with
respect to such shares of Tucker Common Stock, except the right to receive,
without interest, shares of Bradley Common Stock and cash in lieu of
fractional shares of Bradley Common Stock in accordance with Sections 4.1(b)
and 4.2(e) upon the surrender of such Certificate.
A-3
<PAGE>
(d) Each share of Tucker Common Stock issued and held in Tucker's treasury
at the Effective Time, if any, by virtue of the Merger, shall cease to be
outstanding, shall be canceled and retired and shall cease to exist and no
payment of any consideration shall be made with respect thereto.
(e) At the Effective Time, Tucker's obligations with respect to each stock
option set forth in Section 5.3 of the Tucker Disclosure Letter (as defined in
Article 5 hereof) that will not automatically terminate by its terms at the
Effective Time (the "Existing Tucker Options") shall be assumed by Bradley
(the "Assumed Options"), subject to the provisions and amendments described in
this Section. The Assumed Options shall continue to have, and be subject to,
the same terms and conditions as set forth in the stock option plans and
agreements (as in effect immediately prior to the Effective Time) pursuant to
which the Existing Tucker Options were issued, except that (i) all references
to Tucker shall be deemed to be references to Bradley, (ii) each option shall
be exercisable for that number of whole shares of Bradley Common Stock equal
to the product of the number of shares of Tucker Common Stock covered by such
option immediately prior to the Effective Time multiplied by the Exchange
Ratio and rounded to the nearest whole number of shares of Bradley Common
Stock and (iii) the exercise price per share of Bradley Common Stock under
such option shall be equal to the exercise price per share of Tucker Common
Stock under the Existing Tucker Option divided by the Exchange Ratio and
rounded to the nearest cent. The adjustment provided herein with respect to
any Existing Tucker Options that are "incentive stock options" (as defined in
Section 422 of the Code) shall be and is intended to be effected in a manner
that is consistent with Section 424(a) of the Code. Bradley shall (i) reserve
for issuance the number of shares of Bradley Common Stock that will become
issuable upon the exercise of such Assumed Options pursuant to this Section
4.1(e) and (ii) promptly after the Effective Time issue to each holder of an
outstanding Existing Tucker Option a document evidencing the assumption by
Bradley of Tucker's obligations with respect thereto under this Section.
Nothing in this Section or this Agreement shall affect the schedule of vesting
as set forth in Section 5.3 of the Tucker Disclosure Letter with respect to
Tucker Stock Options to be assumed by Bradley as provided in this Section.
4.2 Exchange of Certificates Representing Tucker Common Stock.
(a) As of the Effective Time, Bradley shall deposit, or shall cause to be
deposited, with an exchange agent selected by Bradley on or prior to the
Effective Time (the "Exchange Agent"), for the benefit of the holders of
shares of Tucker Common Stock, for exchange in accordance with this Article 4,
certificates representing the shares of Bradley Common Stock and the cash in
lieu of fractional shares (such cash and certificates for shares of Bradley
Common Stock being hereinafter referred to as the "Exchange Fund") to be
issued pursuant to Section 4.1 and paid pursuant to this Section 4.2 in
exchange for outstanding shares of Tucker Common Stock.
(b) Promptly after the Effective Time, Bradley shall cause the Exchange
Agent to mail to each holder of record of a Certificate or Certificates (i) a
letter of transmittal which shall specify that delivery shall be effected, and
risk of loss and title to the Certificates shall pass, only upon delivery of
the Certificates to the Exchange Agent and shall be in such form and have such
other provisions as Bradley may reasonably specify and (ii) instructions for
use in effecting the surrender of the Certificates in exchange for
certificates representing shares of Bradley Common Stock and cash in lieu of
fractional shares. Upon surrender of a Certificate for cancellation to the
Exchange Agent together with such letter of transmittal, duly executed and
completed in accordance with the instructions thereto, the holder of such
Certificate shall be entitled to receive in exchange therefor (x) a
certificate representing the number of whole shares of Bradley Common Stock to
which such holder shall be entitled, and (y) a check representing the amount
of cash in lieu of fractional shares, if any, plus the amount of any
dividends, or distributions, if any, pursuant to paragraph (c) below, after
giving effect to any required withholding tax, and the Certificate so
surrendered shall forthwith be canceled. No interest will be paid or accrued
on the cash in lieu of fractional shares or on the dividend or distribution,
if any, payable to holders of Certificates pursuant to this Section 4.2. In
the event of a transfer of ownership of Tucker Common Stock which is not
registered in the transfer records of Tucker, a Certificate representing the
proper number of shares of Bradley Common Stock, together with a check for the
cash to be paid in lieu of fractional shares plus, to the extent applicable,
the amount of any dividend or distribution, if any, payable pursuant to
paragraph (c) below,
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may be issued to such a transferee if the Certificate representing shares of
such Tucker Common Stock is presented to the Exchange Agent, accompanied by
all documents required to evidence and effect such transfer and to evidence
that any applicable stock transfer taxes have been paid.
(c) Notwithstanding any other provisions of this Agreement, no dividends or
other distributions on Bradley Common Stock shall be paid with respect to any
shares of Tucker Common Stock represented by a Certificate until such
Certificate is surrendered for exchange as provided herein; provided, however,
that subject to the effect of applicable laws, following surrender of any such
Certificate, there shall be paid to the holder of the certificates
representing whole shares of Bradley Common Stock issued in exchange therefor,
without interest, (i) at the time of such surrender, the amount of dividends
or other distributions with a record date after the Effective Time theretofore
payable with respect to such whole shares of Bradley Common Stock and not
paid, less the amount of any withholding taxes which may be required thereon,
and (ii) at the appropriate payment date, the amount of dividends or other
distributions with a record date after the Effective Time but prior to
surrender and a payment date subsequent to surrender payable with respect to
such whole shares of Bradley Common Stock, less the amount of any withholding
taxes which may be required thereon.
(d) At and after the Effective Time, there shall be no transfers on the
stock transfer books of Tucker of the shares of Tucker Common Stock which were
outstanding immediately prior to the Effective Time. If, after the Effective
Time, Certificates are presented to the Surviving Corporation, they shall be
canceled and exchanged for certificates for shares of Bradley Common Stock and
cash in lieu of fractional shares, if any, in accordance with this Section
4.2. Certificates surrendered for exchange by any person constituting an
"affiliate" of Tucker for purposes of Rule 145, as such rule may be amended
from time to time ("Rule 145"), of the rules and regulations promulgated under
the Securities Act of 1933, as amended (the "Securities Act"), shall not be
exchanged until Bradley has received an Affiliate Letter in the form of
Exhibit D attached hereto, from such person as provided in Section 7.10.
(e) No fractional shares of Bradley Common Stock shall be issued pursuant
hereto. In lieu of the issuance of any fractional share of Bradley Common
Stock pursuant to Section 4.1(b), each holder of Tucker Common Stock upon
surrender of a Certificate for exchange shall be paid an amount in cash
(without interest), rounded to the nearest cent, determined by multiplying (i)
the Closing Price by (ii) the fraction of a share of Bradley Common Stock
which such holder would otherwise be entitled to receive under this Article 4.
4.3 Return of Exchange Fund. Any portion of the Exchange Fund (including the
proceeds of any investments thereof and any shares of Bradley Common Stock)
that remains unclaimed by the former stockholders of Tucker one year after the
Effective Time shall be delivered to the Surviving Corporation. Any former
stockholders of Tucker who have not theretofore complied with this Article 4
shall thereafter look only to the Surviving Corporation for payment of their
shares of Bradley Common Stock and cash in lieu of fractional shares (plus
dividends and distributions to the extent set forth in Section 4.2(c), if
any), as determined pursuant to this Agreement, without any interest thereon.
None of Bradley, Tucker, the Exchange Agent or any other person shall be
liable to any former holder of shares of Tucker Common Stock for any amount
properly delivered to a public official pursuant to applicable abandoned
property, escheat or similar laws. In the event any Certificate shall have
been lost, stolen or destroyed, upon the making of an affidavit of that fact
by the person claiming such Certificate to be lost, stolen or destroyed and,
if required by the Surviving Corporation, the posting by such person of a bond
in such reasonable amount as the Surviving Corporation may direct as indemnity
against any claim that may be made against it with respect to such
Certificate, the Exchange Agent or the Surviving Corporation will issue in
exchange for such lost, stolen or destroyed Certificate the shares of Bradley
Common Stock and cash in lieu of fractional shares (plus, to the extent
applicable, dividends and distributions payable pursuant to Section 4.2(c)).
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ARTICLE 5
5. Representations and Warranties of Tucker.
Except as set forth in the disclosure letter delivered at or prior to the
execution hereof to Bradley, which shall refer to the relevant Sections of
this Agreement (the "Tucker Disclosure Letter"), Tucker represents and
warrants to Bradley as follows:
5.1 Existence; Good Standing; Authority; Compliance With Law. Tucker is a
corporation duly incorporated, validly existing and in good standing under the
laws of the State of Maryland. Tucker is duly licensed or qualified to do
business as a foreign corporation and is in good standing under the laws of
any other state of the United States in which the character of the properties
owned or leased by it therein or in which the transaction of its business
makes such qualification necessary, except where the failure to be so licensed
or qualified would not have a material adverse effect on the business, results
of operations or financial condition of Tucker and the Tucker Subsidiaries (as
defined below) taken as a whole (a "Tucker Material Adverse Effect"). Tucker
has all requisite corporate power and authority to own, operate, lease and
encumber its properties and carry on its business as now conducted. Each of
the Tucker Subsidiaries is a corporation or partnership duly incorporated or
organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation or organization, has the corporate or
partnership power and authority to own its properties and to carry on its
business as it is now being conducted, and is duly qualified to do business
and is in good standing in each jurisdiction in which the ownership of its
property or the conduct of its business requires such qualification, except
for jurisdictions in which such failure to be so qualified or to be in good
standing would not have a Tucker Material Adverse Effect. Neither Tucker nor
any of the Tucker Subsidiaries is in violation of any order of any court,
governmental authority or arbitration board or tribunal, or any law,
ordinance, governmental rule or regulation to which Tucker or any Tucker
Subsidiary or any of their respective properties or assets is subject, where
such violation would have a Tucker Material Adverse Effect. Tucker and the
Tucker Subsidiaries have obtained all licenses, permits and other
authorizations and have taken all actions required by applicable law or
governmental regulations in connection with their business as now conducted,
where the failure to obtain any such license, permit or authorization or to
take any such action would have a Tucker Material Adverse Effect. Copies of
the Charter or other equivalent documents, Bylaws, organizational documents
and partnership and joint venture agreements (and in each such case, all
amendments thereto) of Tucker and each of the Tucker Subsidiaries are listed
in Section 5.1 of the Tucker Disclosure Letter, and the copies of such
documents, which have previously been delivered or made available to Bradley
and its counsel, are true and correct. For the purposes of this Agreement, the
term "Tucker Subsidiary" shall include any of the entities listed under such
heading in Section 5.4 of the Tucker Disclosure Letter.
5.2 Authorization, Validity and Effect of Agreements. Each of Tucker and the
Tucker Subsidiaries has the requisite power and authority to enter into the
transactions contemplated hereby and to execute and deliver this Agreement and
the agreements and documents listed in Schedule 5.2 to this Agreement (the
"Ancillary Agreements") to which it is a party. The Board of Directors of
Tucker has, by resolutions duly adopted by unanimous vote, approved this
Agreement, the Merger and the transactions contemplated by this Agreement and
has agreed to recommend that the holders of Tucker Common Stock adopt and
approve this Agreement, the Merger and the transactions contemplated by this
Agreement at the Tucker stockholders' meeting which will be held in accordance
with the provisions of Section 7.3. In connection with the foregoing, the
Board of Directors of Tucker has taken such actions and votes as are necessary
on its part to render the provisions of the Control Share Acquisition Statute,
the Business Combination Statute and all other applicable takeover statutes of
the MGCL and any other applicable takeover statutes of any other state,
inapplicable to this Agreement, the Merger and the transactions contemplated
by this Agreement. As of the date hereof, all of the directors and executive
officers of Tucker have indicated that they presently intend to vote all
shares of Tucker Common Stock which they own to approve this Agreement, the
Merger, and the transactions contemplated by this Agreement at the Tucker
stockholders meeting which will be held in accordance with the provisions of
Section 7.3. Subject only to the approval of this Agreement and the
transactions contemplated hereby by the holders of two-thirds of the
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outstanding shares of Tucker Common Stock, the execution by Tucker and the
Tucker Subsidiaries of this Agreement, the Ancillary Agreements to which they
are parties and the consummation of the transactions contemplated by this
Agreement and the Ancillary Agreements has been duly authorized by all
requisite corporate or partnership action on the part of such entities. This
Agreement constitutes, and the Ancillary Agreements to which they are parties
(when executed and delivered pursuant hereto) will constitute, the valid and
legally binding obligations of Tucker and the Tucker Subsidiaries, enforceable
against Tucker and each of the Tucker Subsidiaries in accordance with their
respective terms, subject to applicable bankruptcy, insolvency, moratorium or
other similar laws relating to creditors' rights and general principles of
equity.
5.3 Capitalization.
(a) The authorized capital stock of Tucker consists of 90,000,000 shares of
Tucker Common Stock and 10,000,000 shares of preferred stock, $.001 par value
per share (the "Tucker Preferred Stock"). As of the date hereof, there are
10,828,283 shares of Tucker Common Stock issued and outstanding, and no shares
of Tucker Preferred Stock are issued and outstanding. All such issued and
outstanding shares of Tucker Common Stock are duly authorized, validly issued,
fully paid, nonassessable and free of preemptive rights. Except for the TOP
Units and the Existing Tucker Options, Tucker has no outstanding bonds,
debentures, notes or other obligations the holders of which have the right to
vote (or which are convertible into or exercisable for securities having the
right to vote) with the stockholders of Tucker on any matter. Except for the
TOP Units and the Existing Tucker Options (all of which have been issued under
the Tucker Properties Corporation 1993 Share Option Plan (the "Tucker Stock
Option Plan")), there are not at the date of this Agreement any existing
options, warrants, calls, subscriptions, convertible securities, or other
rights, agreements or commitments which obligate Tucker to issue, transfer or
sell any shares of capital stock of Tucker. Section 5.3 of the Tucker
Disclosure Letter sets forth a full list of the Existing Tucker Options,
including the name of the person to whom such stock options have been granted,
the number of shares subject to each option, the per share exercise price for
each option and the vesting schedule for each option. Except as set forth in
Section 5.3 of the Tucker Disclosure Letter, the vesting schedule of all
Existing Tucker Options shall not be changed or affected by the execution of
this Agreement or the Ancillary Agreements or the consummation of the
transactions contemplated by this Agreement or the Ancillary Agreements.
Pursuant to the terms of the Tucker Stock Option Plan, at the Effective Time,
all Existing Tucker Options will be assumed by Bradley in accordance with the
provisions of Section 4.1(e). Except as set forth in Section 5.3 of the Tucker
Disclosure Letter, there are no agreements or understandings to which Tucker
or any Tucker Subsidiary is a party with respect to the voting of any shares
of Tucker Common Stock or which restrict the transfer of any such shares, nor
does Tucker have knowledge of any such agreements or understandings with
respect to the voting of any such shares or which restrict the transfer of any
such shares. Except for TOP Units held by Limited Partners, there are no
outstanding contractual obligations of Tucker or any Tucker Subsidiary to
repurchase, redeem or otherwise acquire any shares of capital stock,
partnership interests or any other securities of Tucker or any Tucker
Subsidiary. Except as set forth in Section 5.3 of the Tucker Disclosure
Letter, neither Tucker nor any Tucker Subsidiary is under any obligation,
contingent or otherwise, by reason of any agreement to register any of their
securities under the Securities Act. After the Effective Time, except to the
extent set forth in Section 4.1(e), the Surviving Corporation will have no
obligation to issue, transfer or sell any shares of capital stock or other
equity interest of Tucker or the Surviving Corporation pursuant to any Tucker
Stock Option Plan or any other Tucker Benefit Plan (as defined in Section 5.16
hereof).
(b) The sole general partner of TOP is Tucker. As of the date hereof, there
are issued and outstanding 11,287,100 TOP Units, 10,828,283 of which are owned
by Tucker and the remainder of which are owned by the persons and in the
amounts set forth in Section 5.3 of the Tucker Disclosure Letter. All such
issued and outstanding TOP Units are duly authorized, validly issued, fully
paid, and free of preemptive rights. The TOP Units owned by Tucker and, to the
best knowledge of Tucker, the TOP Units owned by the Limited Partners, are
subject only to the restrictions on transfer set forth in the TOP Partnership
Agreement and those imposed by applicable securities laws. Except as set forth
in Section 5.3 of the Tucker Disclosure Letter, TOP has not issued or granted,
and is not a party to, any commitments of any kind relating to, or any
agreements or understandings with respect to, TOP Units or any other interest
in TOP or any securities convertible into TOP Units or such interests.
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(c) TOP and Tucker Financing Corporation, a Delaware corporation ("TFC"),
are the only partners in Tucker Financing Partnership, a Delaware partnership
("TFP"). As of the date hereof and at all times during its existence, TFC is
and has been a wholly-owned subsidiary of Tucker, which owns all of the 100
issued and outstanding shares of common stock, par value $.01 per share, of
TFC. As of the date hereof, 99% of the issued and outstanding units of
partnership interests in TFP ("TFP Units"), are held by TOP and 1% are held by
TFC. All such issued and outstanding TFP Units are duly authorized, validly
issued, fully paid, and free of preemptive rights. The TFP Units are subject
only to the restrictions on transfer set forth in the TOP Partnership
Agreement, the partnership agreement of TFP and that certain Indenture, dated
as of June 1, 1994, by and between TFP, Bankers Trust Company of California,
N.A. and Bankers Trust (the "Indenture") and those imposed by applicable
securities laws. TFP has not otherwise issued or granted, and is not a party
to, any commitments of any kind relating to, or any agreements or
understandings with respect to, TFP Units or any other interest in TFP or any
securities convertible into TFP Units or such interests. TFP has financed all
of the properties which it owns through a transaction which, as of the date
hereof, qualifies as a real estate mortgage investment conduit (a "REMIC")
under Section 860D of the Code. As part of the REMIC, TFP issued a
$100,000,000 interest-bearing promissory note to a certain trust, which is
governed by the Indenture. As of the date hereof, TFP has complied with all of
the covenants contained in Section 1008 and Section 1009 of the Indenture and
no Default or Event of Default (as defined in the Indenture), or any event the
occurrence of which, with notice or lapse of time, will become a Default or
Event of Default under Article 5 of the Indenture, has occurred or is
occurring. The execution of this Agreement and the Ancillary Agreements and
the consummation of the transactions contemplated by this Agreement and the
Ancillary Agreements will not violate or result in a violation of the
covenants in Section 1008 and Section 1009 of the Indenture (subject to the
receipt of the consent of the Indenture Trustee) and will not result in a
default or Event of Default (as defined in the Indenture), or any event the
occurrence of which, with notice or lapse of time, will become a Default or
Event of Default under Article 5 of the Indenture. TFP is not subject to
regulation under the Public Utility Holding Company Act of 1935 or the Federal
Power Act and neither TFP or TOP is required to be registered as an
"investment company" within the meaning of the Investment Company Act of 1940.
The beneficial ownership of this trust is represented by 413 certificates in
six different classes (A, B, C, D, E and R). The Class A, Class B, Class C,
Class D and Class E certificates qualify for treatment as "regular interests"
in the REMIC. The Class R certificates represent the sole class of "residual
interests" in the REMIC.
5.4 Subsidiaries. Except as set forth in Section 5.4 of the Tucker
Disclosure Letter, Tucker owns directly or indirectly each of the outstanding
shares of capital stock or all of the partnership or other equity interests of
each of the Tucker Subsidiaries. Each of the outstanding shares of capital
stock in each of the Tucker Subsidiaries having corporate form is duly
authorized, validly issued, fully paid and nonassessable. Except as set forth
in Section 5.4 of the Tucker Disclosure Letter, each of the outstanding shares
of capital stock of, or partnership or other equity interests in, each of the
Tucker Subsidiaries is owned, directly or indirectly, by Tucker free and clear
of all liens, pledges, security interests, claims or other encumbrances. The
following information for each Tucker Subsidiary is set forth in Section 5.4
of the Tucker Disclosure Letter: (i) its name and jurisdiction of
incorporation or organization; (ii) its authorized capital stock or share
capital or partnership or other interests; (iii) the name of each stockholder
or owner of a partnership or other equity interest and the number of issued
and outstanding shares of capital stock or share capital or percentage
ownership for non-corporate entities held by it and (iv) the name of the
general partners, if applicable. TFC and Tucker Properties Investment, Inc.
are the only Tucker Subsidiaries which are "qualified REIT subsidiaries" as
such term is defined under Section 856(i) of the Code.
5.5 Other Interests. Except for interests in the Tucker Subsidiaries as set
forth in Section 5.4 of the Tucker Disclosure Letter, neither Tucker nor any
Tucker Subsidiary owns directly or indirectly any interest or investment
(whether equity or debt) in any corporation, partnership, joint venture, trust
or other entity (other than investments in short-term investment securities).
With respect to the interests set forth in Section 5.4 of the Tucker
Disclosure Letter, Tucker or the applicable Tucker Subsidiary, as the case may
be, is a partner or stockholder in good standing, owns such interests free and
clear of all liens, pledges, security interests, claims, options or other
encumbrances, is not in breach of any provision of any agreement, document or
contract
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governing such entity's rights in or to the interests owned or held, all of
which agreements, documents and contracts are set forth in Section 5.4 of the
Tucker Disclosure Letter, and have not been modified or amended since their
description therein, and are in full force and effect and, to the best of the
knowledge of Tucker, the other parties to such agreements, documents or
contracts are not in breach of any of their respective obligations under such
agreements, documents or contracts, and to the best of the knowledge of
Tucker, if such other entities were included within the definition of Tucker
Subsidiaries for purposes of this Agreement, there would be no exceptions or
breaches to the representations and warranties made in this Article for Tucker
Subsidiaries.
5.6 No Violation. Except as set forth in Section 5.6 of the Tucker
Disclosure Letter, neither the execution and delivery by Tucker and the Tucker
Subsidiaries of this Agreement or the Ancillary Agreements nor the
consummation by Tucker and the Tucker Subsidiaries of the transactions
contemplated by this Agreement and the Ancillary Agreements in accordance with
their terms, will: (i) conflict with or result in a breach of any provisions
of the Charter, Bylaws, organizational documents, partnership agreements, or
joint venture agreements of Tucker or any Tucker Subsidiary; (ii) result in a
breach or violation of, a default under, or the triggering of any payment or
other material obligations pursuant to, or accelerate vesting under, the
Tucker Stock Option Plan, or any grant or award made thereunder; (iii)
violate, or conflict with, or result in a breach of any provision of, or
constitute a default (or an event which, with notice or lapse of time or both,
would constitute a default) under, or result in the termination or in a right
of termination or cancellation of, or accelerate the performance required by,
or result in the creation of any lien, security interest, charge or
encumbrance upon any of the properties of Tucker or the Tucker Subsidiaries
under, or result in being declared void, voidable or without further binding
effect, any of the terms, conditions or provisions of any note, bond,
mortgage, indenture, deed of trust or any license, franchise, permit, lease,
contract, agreement or other instrument, commitment or obligation to which
Tucker or any of the Tucker Subsidiaries is a party, or by which Tucker or any
of the Tucker Subsidiaries or any of their properties is bound or affected,
except for any of the foregoing matters which, individually or in the
aggregate, would not have a Tucker Material Adverse Effect; or (iv) other than
the filings provided for in Article 1 of this Agreement, or required under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976 (the "HSR Act"), the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), the
Securities Act or applicable state securities and "Blue Sky" laws
(collectively, the "Regulatory Filings"), require any consent, approval or
authorization of, or declaration, filing or registration with, any
governmental or regulatory authority, except where the failure to obtain any
such consent, approval or authorization of, or declaration, filing or
registration with, any governmental or regulatory authority would not have a
Tucker Material Adverse Effect.
5.7 SEC Documents. A complete list of the registration statements of Tucker
filed with the United States Securities and Exchange Commission ("SEC") in
connection with Tucker's initial public offering of Tucker Common Stock, and
all exhibits, amendments and supplements thereto (the "Tucker Registration
Statement"), and each (A) registration statement, (B) annual report on Form
10- K, (C) quarterly report on Form 10-Q, (D) current report on Form 8-K, (E)
proxy statement or information statement, and (F) other reports filed with the
SEC pursuant to the requirements of the Exchange Act (in all such cases,
including all exhibits, amendments and supplements thereto), prepared by
Tucker or any of the Tucker Subsidiaries or relating to properties of Tucker
or the Tucker Subsidiaries (including registration statements covering
mortgage pass-through certificates) since the effective date of the Tucker
Registration Statement, is set forth in Section 5.7 of the Tucker Disclosure
Letter, and copies of such documents, in the form (including exhibits and any
amendments thereto) filed with the SEC, have previously been provided or made
available to Bradley or its counsel (collectively, the "Tucker Reports"). The
Tucker Reports were filed with the SEC in a timely manner and constitute all
forms, reports and documents required to be filed by Tucker under the
Securities Act, the Exchange Act and the rules and regulations promulgated
thereunder (the "Securities Laws"). As of their respective dates, the Tucker
Reports (i) complied as to form in all material respects with the applicable
requirements of the Securities Laws and (ii) did not contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements made therein, in the light
of the circumstances under which they were made, not misleading. Each of the
consolidated balance sheets of Tucker included in or incorporated by reference
into the Tucker Reports (including the related notes and schedules) fairly
presents the consolidated financial position of Tucker and the Tucker
Subsidiaries as of its date and each of the consolidated statements of
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income, retained earnings and cash flows of Tucker included in or incorporated
by reference into the Tucker Reports (including any related notes and
schedules) fairly presents the results of operations, retained earnings or
cash flows, as the case may be, of Tucker and the Tucker Subsidiaries for the
periods set forth therein (subject, in the case of unaudited statements, to
normal year-end audit adjustments which would not be material in amount or
effect), in each case in accordance with generally accepted accounting
principles consistently applied during the periods involved, except as may be
noted therein and except, in the case of the unaudited statements, as
permitted by Form 10-Q of the SEC. Except as and to the extent set forth on
the consolidated balance sheet of Tucker and the Tucker Subsidiaries at
December 31, 1994, including all notes thereto, or as set forth in the Tucker
Reports or in Section 5.7 of the Tucker Disclosure Letter, neither Tucker nor
any of the Tucker Subsidiaries has any material liabilities or obligations of
any nature (whether accrued, absolute, contingent or otherwise) that would be
required to be reflected on, or reserved against in, a balance sheet of Tucker
or in the notes thereto, prepared in accordance with generally accepted
accounting principles consistently applied, except liabilities arising in the
ordinary course of business since such date and liabilities for expenses of
attorneys, accountants and investment bankers incurred in connection with the
Merger.
5.8 Litigation. There are (i) no continuing orders, injunctions or decrees
of any court, arbitrator or governmental authority to which Tucker or any
Tucker Subsidiary is a party or by which any of its properties or assets are
bound or, to the reasonable best knowledge of Tucker, to which any of its
directors, officers, employees or agents is a party or by which any of their
properties or assets are bound, and (ii) no actions, suits or proceedings
pending against Tucker or any Tucker Subsidiary or, to the reasonable best
knowledge of Tucker, against any of its directors, officers, employees or
agents or, to the reasonable best knowledge of Tucker, threatened against
Tucker or any Tucker Subsidiary or against any of its directors, officers,
employees or agents, at law or in equity, or before or by any federal or state
commission, board, bureau, agency or instrumentality, that in the case of
clause (i) or (ii), are reasonably likely, individually or in the aggregate,
to have a Tucker Material Adverse Effect.
5.9 Absence of Certain Changes. Except as disclosed in the Tucker Reports
filed with the SEC prior to the date hereof or as set forth in Section 5.9 of
the Tucker Disclosure Letter, since December 31, 1994, Tucker and the Tucker
Subsidiaries have conducted their business only in the ordinary course of such
business and there has not been (i) any Tucker Material Adverse Effect; (ii)
as of the date hereof, any declaration, setting aside or payment of any
dividend or other distribution with respect to the Tucker Common Stock, except
dividends of $0.36 per share paid on January 16, 1995 and April 14, 1995 and
$0.25 per share paid on July 14, 1995 and October 16, 1995, (iii) any material
commitment, contractual obligation, borrowing, capital expenditure or
transaction (each, a "Commitment") entered into by Tucker or any of the Tucker
Subsidiaries, outside the ordinary course of business except for commitments
for expenses of attorneys, accountants and investment bankers incurred in
connection with the Merger; or (iv) any material change in Tucker's accounting
principles, practices or methods.
5.10 Taxes. Except as set forth in Section 5.10 of the Tucker Disclosure
Letter:
(a) Tucker and each of the Tucker Subsidiaries has paid or caused to be paid
all federal, state, local, foreign, and other taxes, including without
limitation, income taxes, estimated taxes, alternative minimum taxes, excise
taxes, sales taxes, use taxes, value-added taxes, gross receipts taxes,
franchise taxes, capital stock taxes, employment and payroll-related taxes,
withholding taxes, stamp taxes, transfer taxes, windfall profit taxes,
environmental taxes and property taxes, whether or not measured in whole or in
part by net income, and all deficiencies, or other additions to tax, interest,
fines and penalties (collectively, "Taxes"), owed by it through the date
hereof.
(b) Tucker and each of the Tucker Subsidiaries has timely filed all federal,
state, local and foreign tax returns required to be filed by any of them
through the date hereof, and all such returns completely and accurately set
forth the amount of any Taxes relating to the applicable period.
(c) Neither the Internal Revenue Service ("IRS") nor any other governmental
authority is now asserting by written notice to Tucker or any Tucker
Subsidiary or, to the knowledge of Tucker or the Tucker
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Subsidiaries, threatening to assert against Tucker or any Tucker Subsidiary
any deficiency or claim for additional Taxes. There is no dispute or claim
concerning any Tax liability of Tucker or any Tucker Subsidiary, either
claimed or raised by any governmental authority, or as to which any officer of
Tucker or any Tucker Subsidiary has reason to believe may be claimed or raised
by any federal or state governmental authority. No claim has ever been made by
a taxing authority in a jurisdiction where Tucker does not file reports and
returns that Tucker is or may be subject to taxation by that jurisdiction.
There are no security interests on any of the assets of Tucker or any Tucker
Subsidiary that arose in connection with any failure (or alleged failure) to
pay any Taxes. Other than the agreement dated June 5, 1995, (the "1995 Closing
Agreement") Tucker has never entered into a closing agreement pursuant to
Section 7121 of the Code.
(d) Except as to matters in connection with the 1995 Closing Agreement,
Tucker has not received written notice of any audit of any tax return filed by
Tucker, and Tucker has not been notified by any tax authority that any such
audit is contemplated or pending. Neither Tucker nor any of the Tucker
Subsidiaries has executed or filed with the IRS or any other taxing authority
any agreement now in effect extending the period for assessment or collection
of any income or other taxes, and no extension of time with respect to any
date on which a tax return was or is to be filed by Tucker is in force. True,
correct and complete copies of all federal, state and local income or
franchise tax returns filed by Tucker and each of the Tucker Subsidiaries and
all communications relating thereto have been delivered to Bradley or made
available to representatives of Bradley.
(e) Tucker and each Tucker Subsidiary has withheld and paid all taxes
required to have been withheld and paid in connection with amounts paid or
owing to any employee, independent contractor, creditor, stockholder or other
party.
(f) Each of the Tucker Subsidiaries of which all the outstanding capital
stock is owned solely by Tucker is a Qualified REIT Subsidiary as defined in
Section 856(i) of the Code. TOP, TFP and each of the other Tucker Subsidiaries
listed as a partnership in Section 5.4 of the Tucker Disclosure Letter are,
and have been at all times, properly classified as partnerships for federal
income tax purposes and not as publicly-traded partnerships.
(g) For its taxable year ended December 31, 1993, Tucker made all federal
and applicable state and local elections to qualify as a real estate
investment trust. None of such elections has been terminated or revoked. For
its taxable year ended December 31, 1993 and at all times thereafter up to and
including the date hereof, Tucker has qualified to be treated as a real estate
investment trust ("REIT") within the meaning of Sections 856-860 of the Code,
including, without limitation, the requirements of Sections 856 and 857 of the
Code. Tucker has qualified as a REIT for every year in which it existed. For
the periods described in the preceding sentence, Tucker has met all
requirements necessary to be treated as a REIT for purposes of the income tax
provisions of those states in which Tucker is subject to income tax and which
provide for the taxation of REITs in a manner similar to the treatment of
REITs under Sections 856-860 of the Code.
5.11 Books and Records.
(a) The books of account and other financial records of Tucker and each of
the Tucker Subsidiaries are true, complete and correct in all material
respects, have been maintained in accordance with good business practices, and
are accurately reflected in all material respects in the financial statements
included in the Tucker Reports.
(b) The minute books and other records of Tucker and each of the Tucker
Subsidiaries have been made available to Bradley, contain in all material
respects accurate records of all meetings and accurately reflect in all
material respects all other corporate action of the stockholders and directors
and any committees of the Board of Directors of Tucker and each of the Tucker
Subsidiaries and all actions of the partners of each of the Tucker
Subsidiaries.
5.12 Properties. All of the real estate properties owned by Tucker and each
of the Tucker Subsidiaries are set forth in Section 5.12 of the Tucker
Disclosure Letter. Except as set forth in Section 5.12 of the Tucker
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Disclosure Letter, Tucker and each Tucker Subsidiary own fee simple title to
each of the real properties identified in the Tucker Disclosure Letter (the
"Tucker Properties"), free and clear of liens, mortgages or deeds of trust,
claims against title, charges which are liens, security interests or other
encumbrances on title (collectively, "Encumbrances") and the Tucker Properties
are not subject to any rights of way, written agreements, laws, ordinances and
regulations affecting building use or occupancy, or reservations of an
interest in title (collectively, "Property Restrictions"), except for (i)
Property Restrictions imposed or promulgated by law or any governmental body
or authority with respect to real property, including zoning regulations, that
do not adversely affect the current use of the property, materially detract
from the value of or materially interfere with the present use of the
property, (ii) Encumbrances and Property Restrictions disclosed on existing
title reports or current surveys (in either case copies of which title reports
and surveys have been delivered or made available to Bradley and are listed in
Section 5.12 of the Tucker Disclosure Letter), and (iii) mechanics',
carriers', workmen's or repairmen's liens and other Encumbrances, Property
Restrictions and other limitations of any kind, if any, which, individually or
in the aggregate, are not material in amount, do not materially detract from
the value of or materially interfere with the present use of any of the Tucker
Properties subject thereto or affected thereby, and do not otherwise
materially impair business operations conducted by Tucker and the Tucker
Subsidiaries and which have arisen or been incurred only in the ordinary
course of business. Except as set forth in Section 5.12 of the Tucker
Disclosure Letter, valid policies of title insurance have been issued insuring
Tucker's or the applicable Tucker Subsidiary's fee simple title to each of the
Tucker Properties in amounts at least equal to the purchase price thereof, and
such policies are, at the date hereof, in full force and effect and no claim
has been made against any such policy and Tucker has no knowledge of any facts
or circumstances which would constitute the basis for such a claim. To the
best knowledge of Tucker, (i) no certificate, permit or license from any
governmental authority having jurisdiction over any of the Tucker Properties
or any agreement, easement or other right which is necessary to permit the
lawful use and operation of the buildings and improvements on any of the
Tucker Properties or which is necessary to permit the lawful use and operation
of all driveways, roads and other means of egress and ingress to and from any
of the Tucker Properties (a "REA Agreement") has not been obtained and is not
in full force and effect, and there is no pending threat of modification or
cancellation of any of same nor is Tucker nor any Tucker Subsidiary currently
in default under any REA Agreement and the Tucker Properties are in full
compliance with all governmental permits, licenses and certificates; (ii) no
written notice of any violation of any federal, state or municipal law,
ordinance, order, regulation or requirement affecting any portion of any of
the Tucker Properties has been issued by any governmental authority; (iii)
there are no material structural defects relating to any of the Tucker
Properties; (iv) there is no Tucker Property whose building systems are not in
working order in any material respect; (v) there is no physical damage to any
Tucker Property in excess of $10,000 for which there is no insurance in effect
covering the full cost of the restoration; or (vi) there is no current
renovation or restoration or tenant improvements to any Tucker Property or any
portion thereof, the cost of which exceeds $10,000, except in each instance as
set forth in Section 5.12 of the Tucker Disclosure Letter. Except as noted in
Section 5.12 of the Tucker Disclosure Letter, the use and occupancy of each of
the Tucker Properties complies in all material respects with all applicable
codes and zoning laws and regulations, and Tucker has no knowledge of any
pending or threatened proceeding or action that will in any manner affect the
size of, use of, improvements on, construction on, or access to any of the
Tucker Properties, with such exceptions as are not material and do not
interfere with the use made and proposed to be made of such Tucker Properties.
Neither Tucker nor any of the Tucker Subsidiaries has received any notice to
the effect that (A) any betterment assessments have been levied against, or
any condemnation or rezoning proceedings are pending or threatened with
respect to any of the Tucker Properties or (B) any zoning, building or similar
law, code, ordinance, order or regulation is or will be violated by the
continued maintenance, operation or use of any buildings or other improvements
on any of the Tucker Properties or by the continued maintenance, operation or
use of the parking areas.
5.13 Leases.
(a) Section 5.13 of the Tucker Disclosure Letter sets forth a true, accurate
and complete rent roll for each of the Tucker Properties (the "Rent Roll") as
of September 30, 1995. The Rent Roll includes, without limitation, the name of
the Tenant, the space leased, the lease expiration date, security and other
deposits, prepaid rent (for
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more than 30 days), percentage rent, pro rata share of operating expenses,
taxes, charges and assessments. Section 5.13 of the Tucker Disclosure Letter
contains a list of known defaults and a list of any extraordinary clauses
including, without limitation, any "kick-out" clauses, cotenancy requirements
or exclusions, "go-dark" clauses, or clauses requiring any future funding of
tenant improvements.
(b) Except as noted in Section 5.13 of the Tucker Disclosure Letter, as of
the last day of the calendar month immediately preceding the date hereof, (i)
each of the leases and tenancies for all or any portion of the Tucker
Properties (the "Tucker Leases") is valid and subsisting and in full force and
effect, has not been amended, modified or supplemented; (ii) the tenant under
each of the Tucker Leases is in actual possession of the leased premises;
(iii) no tenants are in arrears for the payment of rent for any month
preceding the month of the date of this Agreement or otherwise in default of
such tenant's lease obligations as to which Tucker has given notice of default
to such tenant; and (iv) neither Tucker nor any Tucker Subsidiary has received
any written notice from any tenant of any intention to vacate. Except as set
forth in Section 5.13 of the Tucker Disclosure Letter, neither Tucker nor any
Tucker Subsidiary has collected payment of rent (other than security deposits)
accruing for a period which is more than one month beyond the date of
collection.
(c) Tucker has previously delivered or made available to Bradley a true and
correct copy of all Tucker Leases.
(d) Except as shown in Section 5.13 of the Tucker Disclosure Letter, as of
the last day of the calendar month immediately preceding the date hereof, no
tenant under any of the Tucker Leases has asserted any claim of which Tucker
or any Tucker Subsidiary has received written notice which would materially
affect the collection of rent from such tenant and neither Tucker nor any
Tucker Subsidiary has received written notice of any material default or
breach on the part of Tucker or any Tucker Subsidiary under any of the Tucker
Leases which has not been cured.
(e) Section 5.13 of the Tucker Disclosure Letter sets forth a complete and
correct list, as of the date hereof, of all written or oral commitments made
by Tucker or any Tucker Subsidiary to lease any of the Tucker Properties or
any portion thereof which has not yet been reduced to a written lease. Tucker
has provided true and correct copies of all such written commitments to
Bradley and Section 5.13 of the Tucker Disclosure Letter provides with respect
to each such oral commitment the principal terms of such commitment,
including, if applicable, (i) the space to be occupied, (ii) the name of the
tenant, (iii) the length of the original term thereof and any right or option
to renew or extend the lease term, (iv) the monthly minimum rental, (v) rental
escalations, (vi) the terms with respect to percentage rent or other overage
rent, (vii) any provisions for tenant allowances and tenant build-out and
(viii) the right of any third-party broker to any outstanding brokerage or
other commission incidental thereto and all other financial terms.
(f) Except as set forth in Section 5.13 of the Tucker Disclosure Letter all
material leases pursuant to which Tucker or any Tucker Subsidiary, as lessee,
leases real or personal property are in good standing, valid and effective in
accordance with their respective terms, and there is not, under any of such
leases, any material existing default or any event which with notice or lapse
of time or both would constitute such a default, nor do any of such leases
contain any provision which would preclude the Surviving Corporation from
occupying and using the leased premises for the same purposes and upon
substantially the same rental and other terms as are applicable to the
occupation and use by Tucker and the Tucker Subsidiaries.
5.14 Rents. The rents and other income and charges set forth in Section 5.13
of the Tucker Disclosure Letter are the actual rents, income and charges
presently being charged by Tucker and the Tucker Subsidiaries under the Tucker
Leases. No space is occupied rent free or at a rental rate reduced from the
rate stated in Section 5.13 of the Tucker Disclosure Letter. Other than set
forth in Section 5.13 of the Tucker Disclosure Letter, no tenant under any of
the Tucker Leases is entitled to any purchase option, concessions, allowances,
abatements, set-offs, rebates or refunds or has prepaid any rents or other
charges for more than one month. None of the Tucker Leases and none of the
rents or other amounts payable thereunder have been assigned, pledged or
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encumbered, other than to lenders, as described in Section 5.22 of the Tucker
Disclosure Letter. Except as set forth in Section 5.22 of the Tucker
Disclosure Letter, no brokerage or leasing commission or other compensation
will be due or payable to any person, firm, corporation or other entity with
respect to or on account of any of the Tucker Leases or any extensions or
renewals thereof on and after the Effective Time.
5.15 Environmental Matters. Except as set forth in Section 5.15 of the
Tucker Disclosure Letter, none of Tucker, any Tucker Subsidiary or, to the
best knowledge of Tucker, any other person has caused or permitted (a) the
unlawful presence of any hazardous substances, hazardous materials, toxic
substances or waste materials (collectively, "Hazardous Materials") on any of
the Tucker Properties, or (b) any unlawful spills, releases, discharges or
disposal of Hazardous Materials to have occurred or be presently occurring on
or from any of the Tucker Properties as a result of any construction on or
operation and use of such properties, which presence or occurrence would,
individually or in the aggregate, have a Tucker Material Adverse Effect; and
in connection with the construction on or operation and use of the Tucker
Properties, neither Tucker nor any of the Tucker Subsidiaries has failed to
comply, in any material respect, with any applicable local, state or federal
environmental law, regulation, ordinance or administrative and judicial order
relating to the generation, recycling, reuse, sale, storage, handling,
transport and disposal of any Hazardous Materials.
5.16 Employee Benefit Plans.
(a) All employee benefits plans (within the meaning of Section 3(3) of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA")) and
other benefit arrangements covering employees of Tucker and the Tucker
Subsidiaries, other than any multiemployer plan (within the meaning of Section
3(37) of ERISA) (the "Tucker Benefit Plans") are listed in Section 5.16(a) of
the Tucker Disclosure Letter. True and complete copies of the Tucker Benefit
Plans have been provided or made available to Bradley. To the extent
applicable, the Tucker Benefit Plans have been administered in all material
respects in accordance with their terms and comply, in all material respects,
with the applicable requirements of ERISA and the Code. Any Tucker Benefit
Plan intended to be qualified under Section 401(a) of the Code has received a
favorable determination letter from the IRS or a determination letter request
has been filed with the IRS with respect to any such plan and is still
pending. No Tucker Benefit Plan is covered by Title IV of ERISA or Section 412
of the Code. No Tucker Benefit Plan nor Tucker or any Tucker Subsidiary has
incurred any liability or penalty under Section 4975 of the Code or Section
502(i) of ERISA. There are no pending or anticipated claims against or
otherwise involving any of the Tucker Benefit Plans and no suit, action or
other litigation (excluding claims for benefits incurred in the ordinary
course of Tucker Benefit Plan activities) has been brought against or with
respect to any such Tucker Benefit Plan. All material contributions required
to be made as of the date hereof to the Tucker Benefit Plans have been made or
provided for. Except as otherwise required by Sections 601 through 608 of
ERISA, Section 4980B of the Code and applicable state laws or as set forth in
the Severance Plan or the Severance Agreements, Tucker does not maintain or
contribute to any plan or arrangement which provides or has any liability to
provide life insurance, medical or other employee welfare benefits to any
employee or former employee upon his retirement or termination of employment
and Tucker has never represented, promised or contracted (whether in oral or
written form) to any employee or former employee that such benefits would be
provided. Except as set forth in the Severance Plan or the Severance
Agreements, as disclosed in the Tucker Reports or in Section 5.16(a) of the
Tucker Disclosure Letter, the execution of, and performance of the
transactions contemplated in, this Agreement will not (either alone or upon
the occurrence of any additional subsequent events directly related to the
transaction contemplated herein) (i) constitute an event under any Tucker
Benefit Plan that will or may result in any payment (whether of severance pay
or otherwise), acceleration, forgiveness of indebtedness, vesting,
distribution, increase in benefits or obligations to fund benefits with
respect to any employee, director or consultant of Tucker or any Tucker
Subsidiary pursuant to any Tucker Benefit Plan or (ii) result in the
triggering or imposition of any restrictions or limitations on the right of
Tucker or Bradley to amend or terminate any Tucker Benefit Plan. No payment or
benefit which will be required to be made pursuant to the terms of any
agreement, commitment or Tucker Benefit Plan (including the Severance Plan and
the Severance Agreements and the Consulting Agreement with Ken Tucker), as a
result of the transactions contemplated by this Agreement, to any officer,
director or employee of Tucker or any of the Tucker Subsidiaries, could be
characterized as an "excess parachute payment" within the meaning of Section
280G of the Code.
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(b) Except as listed in Schedule 5.16(b) of the Tucker Disclosure Letter,
neither Tucker nor any Tucker Subsidiary contributes to or has any liability
to contribute to a multiemployer plan. All contributions have been made as
required by the terms of each of the plans listed in Schedule 5.16(b) of the
Tucker Disclosure Letter and the terms of any related collective bargaining
agreements and neither Tucker nor any Tucker Subsidiary has any knowledge or
received any notice that any such plan is in reorganization, that increased
contributions are required to avoid a reduction in plan benefits or the
imposition of any excise tax, that any such plan is or has been funded at a
rate less than required under section 412 of the Code, or that any such plan
is insolvent.
5.17 Labor Matters. Except as set forth in Section 5.17 of the Tucker
Disclosure Letter, neither Tucker nor any Tucker Subsidiary is a party to, or
bound by, any collective bargaining agreement, contract or other agreement or
understanding with a labor union or labor union organization. There is no
unfair labor practice or labor arbitration proceeding pending or, to the
knowledge of Tucker, threatened against Tucker or any of the Tucker
Subsidiaries relating to their business, except for any such proceeding which
would not have a Tucker Material Adverse Effect. To the knowledge of Tucker,
there are no organizational efforts with respect to the formation of a
collective bargaining unit presently being made or threatened involving
employees of Tucker or any of the Tucker Subsidiaries.
5.18 No Brokers. Neither Tucker nor any of the Tucker Subsidiaries has
entered into any contract, arrangement or understanding with any person or
firm which may result in the obligation of such entity or Bradley to pay any
finder's fees, brokerage or agent's commissions or other like payments in
connection with the negotiations leading to this Agreement or the consummation
of the transactions contemplated hereby, except that Tucker has retained
PaineWebber Incorporated ("PaineWebber") and those entities listed in Section
5.18 of the Tucker Disclosure Letter, as its financial advisors, the
arrangements with which have been disclosed in writing to Bradley prior to the
date hereof. Other than the foregoing arrangements and Bradley's arrangement
with Alex. Brown & Sons Incorporated ("Alex. Brown"), Tucker is not aware of
any claim for payment of any finder's fees, brokerage or agent's commissions
or other like payments in connection with the negotiations leading to this
Agreement or the consummation of the transactions contemplated hereby.
5.19 Opinion of Financial Advisor. Tucker has received the opinion of
PaineWebber, to the effect that, as of the date hereof, the Exchange Ratio is
fair to the holders of Tucker Common Stock from a financial point of view, and
has delivered a true and correct copy of such opinion to Bradley.
5.20 Bradley Share Ownership. Neither Tucker nor any of the Tucker
Subsidiaries owns any shares of Bradley Common Stock or other securities
convertible into any shares of Bradley Common Stock.
5.21 Related Party Transactions. Set forth in Section 5.21 of the Tucker
Disclosure Letter is a list of all arrangements, agreements and contracts
(except for the Severance Plan and the Severance Agreements) entered into by
Tucker or any of the Tucker Subsidiaries (which are or will be in effect as of
or after the date of this Agreement) with (i) any consultant (X) involving
payments in excess of $25,000 or (Y) which may not be terminated at will by
Tucker or the Tucker Subsidiary which is a party thereto, (ii) any person who
is an officer, director or affiliate of Tucker or any of the Tucker
Subsidiaries, any relative of any of the foregoing or any entity of which any
of the foregoing is an affiliate or (iii) any person who acquired Tucker
Common Stock in a private placement. All such documents are listed in Section
5.21 of the Tucker Disclosure Letter and the copies of such documents, which
have previously been provided or made available to Bradley and its counsel,
are true and correct copies. All of the management, leasing or other contracts
to which TMC, TMLP or any affiliate of Tucker is a party, receives income from
or has obligations or liabilities arising out of are listed on Schedule 5.21
of the Tucker Disclosure Letter.
5.22 Contracts and Commitments. Section 5.22 of the Tucker Disclosure Letter
sets forth (i) all notes, debentures, bonds and other evidence of indebtedness
which are secured or collateralized by mortgages, deeds of trust or other
security interests in the Tucker Properties or personal property of Tucker and
each of the Tucker Subsidiaries and (ii) each Commitment entered into by
Tucker or any of the Tucker Subsidiaries which may result in total payments by
or liability of Tucker or any Tucker Subsidiary in excess of $10,000 except
for the
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Severance Plan and the Severance Agreements. Copies of the foregoing are
listed in Section 5.22 of the Tucker Disclosure Letter and the copies of such
documents, which have previously been provided or made available to Bradley
and its counsel, are true and correct. None of Tucker or any of the Tucker
Subsidiaries has received any notice of a default that has not been cured
under any of the documents described in clause (i) above or is in default
respecting any payment obligations thereunder beyond any applicable grace
periods except where such default would not have a Tucker Material Adverse
Effect. All joint venture agreements to which Tucker or any of the Tucker
Subsidiaries is a party are set forth in Section 5.22 of the Tucker Disclosure
Letter and neither Tucker nor any of the Tucker Subsidiaries is in default
with respect to any obligations, which individually or in the aggregate are
material, thereunder.
5.23 Development Rights. Set forth in Section 5.23 of the Tucker Disclosure
Letter is a list of all agreements entered into by Tucker or any of the Tucker
Subsidiaries relating to the development or construction of the Tucker
Properties and a description of the current status of each such development.
The copies of such agreements are listed in Section 5.23 of the Tucker
Disclosure Letter, and such copies, which have previously been provided to
Bradley and its counsel, are true and correct. All work to be performed,
payments to be made and actions to be taken by Tucker or any of the Tucker
Subsidiaries prior to the date hereof pursuant to any agreement entered into
with a governmental body or authority in connection with the development of
the Tucker Properties, including any Development Agreement relating to a site
approval, zoning reclassification or other similar action (e.g., Local
Improvement District, Road Improvement District, Environmental Mitigation,
etc.) has been performed, paid or taken, as the case may be, and Tucker is not
aware of any planned or proposed work, payments or actions that may be
required after the date hereof pursuant to such agreements.
5.24 Certain Payments Resulting From Transactions. Except for the Severance
Plan and the Severance Agreements and the vesting of options as set forth in
Section 5.3 of the Tucker Disclosure Letter, the execution of, and performance
of the transactions contemplated by, this Agreement will not (either alone or
upon the occurrence of any additional or subsequent events) (i) constitute an
event under any Tucker Benefit Plan, policy, practice, agreement or other
arrangement or any trust or loan (the "Employee Arrangements") that will or
may result in any payment (whether of severance pay or otherwise),
acceleration, forgiveness of indebtedness, vesting, distribution, increase in
benefits or obligation to fund benefits with respect to any employee, director
or consultant of Tucker or any of the Tucker Subsidiaries, or (ii) result in
the triggering or imposition of any restrictions or limitations on the right
of Tucker or Bradley to amend or terminate any Employee Arrangement and
receive the full amount of any excess assets remaining or resulting from such
amendment or termination, subject to applicable taxes. No payment or benefit
which will be required to be made pursuant to the terms of any agreement,
commitment or Tucker Benefit Plan (including the Severance Plan and the
Severance Agreements), as a result of the transactions contemplated by this
Agreement, to any officer, director or employee of Tucker or any of the Tucker
Subsidiaries, could be characterized as an "excess parachute payment" within
the meaning of Section 280G of the Code.
5.25 Indemnification Claims. No indemnification or other claims have been
made by Tucker, any Tucker Subsidiary, or any other person against the TTC
Principals or the TTC Guarantors (as such terms are defined in the TOP
Partnership Agreement) under Section 14 or any other section or provision of
the TOP Partnership Agreement or any other agreement to which Tucker or any
Tucker Subsidiary is a party and, to the best knowledge of Tucker, no facts or
circumstances exist which could give rise to any such claim.
5.26 Disclosure. The representations, warranties and statements made by
Tucker in this Agreement, the Ancillary Agreements and in the Tucker
Disclosure Letter and in the certificates and other documents delivered
pursuant hereto do not contain any untrue statement of a material fact, and,
when taken together, do not omit to state any material fact necessary to make
such representations, warranties and statements, in light of the circumstances
under which they are made, not misleading.
5.27 Status of Holden Court and Holden Court Escrow. Section 5.27 of the
Tucker Disclosure Letter sets forth a description of the current status of the
Holden Court Escrow Agreement established in connection
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with the contribution of One North State to TOP and a description of the
status of efforts with the City of Chicago to secure fee simple title to
Holden Court as required by the Holden Court Escrow Agreement.
5.28 Tenant Improvements. Section 5.28 of the Tucker Disclosure Letter
contains (i) a list of any unfunded tenant improvements being conducted by
Tucker or any Tucker Subsidiary in excess of $10,000 and (ii) to the best
knowledge of Tucker, the aggregate amount of all unfunded tenant improvements
for all Tucker Properties. Tucker and each Tucker Subsidiary has delivered or
made available true and correct copies of any and all contracts, plans,
specifications and agreements in connection with all tenant improvements in
excess of $10,000.
5.29 Status of Options to Purchase Real Property. All options of Tucker or
any of the Tucker Subsidiaries to purchase real property, including a
description of the current status, conditions and contingencies relating to
each of such options, are set forth in Section 5.29 of the Tucker Disclosure
Letter.
5.30 Definition of Tucker's Knowledge. As used in this Agreement, the phrase
"to the knowledge of Tucker" or "to the best knowledge of Tucker" (or words of
similar import) means the knowledge or the best knowledge of those individuals
identified in Section 5.30 of the Tucker Disclosure Letter, and includes any
fact, matter or circumstance which any of such individuals, as an ordinary and
prudent business person employed in the same capacity in the same type and
size of business as Tucker, should have known.
ARTICLE 6
6. Representations and Warranties of Bradley.
Except as set forth in the disclosure letter delivered at or prior to the
execution hereof to Tucker, which shall refer to the relevant Sections of this
Agreement (the "Bradley Disclosure Letter"), Bradley represents and warrants
to Tucker as follows:
6.1 Existence; Good Standing; Authority; Compliance With Law. Bradley is a
corporation duly incorporated, validly existing and in good standing under the
laws of the State of Maryland. Bradley is duly licensed or qualified to do
business as a foreign corporation and is in good standing under the laws of
any other state of the United States in which the character of the properties
owned or leased by it therein or in which the transaction of its business
makes such qualification necessary, except where the failure to be so licensed
or qualified would not have a material adverse effect on the business, results
of operations or financial condition of Bradley and the Bradley Subsidiaries
(as defined below) taken as a whole (a "Bradley Material Adverse Effect").
Bradley has all requisite corporate power and authority to own, operate, lease
and encumber its properties and carry on its business as now conducted. Each
of the Bradley Subsidiaries is a corporation duly incorporated, validly
existing and in good standing under the laws of its jurisdiction of
incorporation or organization, has the corporate power and authority to own
its properties and to carry on its business as it is now being conducted, and
is duly qualified to do business and is in good standing in each jurisdiction
in which the ownership of its property or the conduct of its business requires
such qualification, except for jurisdictions in which such failure to be so
qualified or to be in good standing would not have a Bradley Material Adverse
Effect. Neither Bradley nor any Bradley Subsidiary is in violation of any
order of any court, governmental authority or arbitration board or tribunal,
or any law, ordinance, governmental rule or regulation to which Bradley or any
Bradley Subsidiary or any of their respective properties or assets is subject,
where such violation would have a Bradley Material Adverse Effect. Bradley and
the Bradley Subsidiaries have obtained all licenses, permits and other
authorizations and have taken all actions required by applicable law or
governmental regulations in connection with their business as now conducted,
where the failure to obtain any such license, permit or authorization or to
take any such action would have a Bradley Material Adverse Effect. Copies of
the Charter and other equivalent documents and Bylaws (and all amendments
thereto) of Bradley and each of the Bradley Subsidiaries are listed in Section
6.1 of the Bradley Disclosure Letter, and the copies of such documents, which
have previously been delivered or made available to Tucker or its counsel, are
true and correct copies. For
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purposes of this Agreement, the term "Bradley Subsidiary" shall include any of
the entities set forth under such heading in Section 6.4 of the Bradley
Disclosure Letter.
6.2 Authorization, Validity and Effect of Agreements. Bradley has the
requisite corporate power and authority to enter into the transactions
contemplated hereby and to execute and deliver this Agreement and the
Ancillary Agreements to which it is a party. The Board of Directors of Bradley
has, by resolutions duly adopted by unanimous vote approved this Agreement,
the Merger and the other transactions contemplated by this Agreement and has
agreed to recommend that the holders of Bradley Common Stock adopt and approve
this Agreement, the Merger and the transactions contemplated by this Agreement
at the Bradley stockholders' meeting which will be held in accordance with the
provisions of Section 7.3. In connection with the foregoing, the Board of
Directors of Bradley has taken such actions and votes as are necessary on its
part to render the provisions of the Control Share Acquisition Statute, the
Business Combination Statute and all other applicable takeover statutes of the
MGCL and any other applicable takeover statutes of any other state,
inapplicable to this Agreement, the Merger, and the transactions contemplated
by this Agreement. As of the date hereof, all of the directors and executive
officers of Bradley have indicated that they presently intend to vote all
shares of Bradley Common Stock which they own to approve this Agreement, the
Merger, and the transactions contemplated by this Agreement at the Bradley
stockholders meeting which will be held in accordance with the provisions of
Section 7.3. Subject only to the approval of this Agreement and the
transactions contemplated hereby by the holders of a majority of the
outstanding shares of Bradley Common Stock, the execution by Bradley of this
Agreement, the Ancillary Agreements and the consummation of the transactions
contemplated by this Agreement and the Ancillary Agreements has been duly
authorized by all requisite corporate action on the part of Bradley. This
Agreement constitutes, and the Ancillary Agreements to which it will become a
party (when executed and delivered pursuant hereto) will constitute, the valid
and legally binding obligations of Bradley, enforceable against Bradley in
accordance with their respective terms, subject to applicable bankruptcy,
insolvency, moratorium or other similar laws relating to creditors' rights and
general principles of equity.
6.3 Capitalization. The authorized capital stock of Bradley consists of
80,000,000 shares of Bradley Common Stock, 20,000,000 shares of preferred
stock, par value $.01 per share (the "Bradley Preferred Stock"), and
50,000,000 shares of excess stock, par value $.01 per share ("Bradley Excess
Stock"). As of the date hereof, there are 11,226,606 shares of Bradley Common
Stock issued and outstanding, and no shares of Bradley Preferred Stock or
Bradley Excess Stock are issued and outstanding. All such issued and
outstanding shares of Bradley Common Stock are duly authorized, validly
issued, fully paid, nonassessable and free of preemptive rights. Bradley has
no outstanding bonds, debentures, notes or other obligations the holders of
which have the right to vote (or which are convertible into or exercisable for
securities having the right to vote) with the stockholders of Bradley on any
matter. There are not at the date of this Agreement any existing options,
warrants, calls, subscriptions, convertible securities, or other rights,
agreements or commitments which obligate Bradley to issue, transfer or sell
any shares of Bradley Common Stock, other than the issuance by Bradley of up
to 297,875 shares of Bradley Common Stock upon the exercise of stock options
issued pursuant to Bradley's stock option plans. There are no agreements or
understandings to which Bradley or any Bradley Subsidiary is a party with
respect to the voting of any shares of Bradley Common Stock or which restrict
the transfer of any such shares, nor does Bradley have knowledge of any such
agreements or understandings with respect to the voting of any such shares or
which restrict the transfer of such shares.
6.4 Subsidiaries. Bradley owns all of the outstanding shares of capital
stock of each of the Bradley Subsidiaries. All of the outstanding shares of
capital stock of each of the Bradley Subsidiaries are duly authorized, validly
issued, fully paid and nonassessable, and are owned, by Bradley free and clear
of all liens, pledges, security interests, claims or other encumbrances. The
following information for each Bradley Subsidiary is set forth in Section 6.4
of the Bradley Disclosure Letter: (i) its name and jurisdiction of
incorporation or organization and (ii) its authorized capital stock.
6.5 Other Interests. Except for interests in the Bradley Subsidiaries and
the securities of other publicly traded REITs, neither Bradley nor any Bradley
Subsidiary owns directly or indirectly any interest or investment
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(whether equity or debt) in any corporation, partnership, joint venture, trust
or other entity (other than investments in short-term investment securities).
6.6 No Violation. Except as set forth in Section 6.6 of the Bradley
Disclosure Letter, neither the execution and delivery by Bradley of this
Agreement or the Ancillary Agreements nor the consummation by Bradley of the
transactions contemplated by this Agreement and the Ancillary Agreements in
accordance with their terms, will: (i) conflict with or result in a breach of
any provisions of the Articles of Incorporation or Bylaws of Bradley; (ii)
result in a breach or violation of, a default under, or the triggering of any
payment or other material obligations pursuant to, or accelerate vesting
under, any of Bradley's stock option plans, or any grant or award under any of
the foregoing; (iii) violate, or conflict with, or result in a breach of any
provision of, or constitute a default (or an event which, with notice or lapse
of time or both, would constitute a default) under, or result in the
termination or in a right of termination or cancellation of, or accelerate the
performance required by, or result in the creation of any lien, security
interest, charge or encumbrance upon any of the properties of Bradley or any
of the Bradley Subsidiaries under, or result in being declared void, voidable,
or without further binding effect, any of the terms, conditions or provisions
of any note, bond, mortgage, indenture, deed of trust or any license,
franchise, permit, lease, contract, agreement or other instrument, commitment
or obligation to which Bradley or any of the Bradley Subsidiaries is a party,
or by which Bradley or any of the Bradley Subsidiaries or any of their
properties is bound or affected, except for any of the foregoing matters
which, individually or in the aggregate, would not have a Bradley Material
Adverse Effect; or (iv) other than the Regulatory Filings, require any
consent, approval or authorization of, or declaration, filing or registration
with, any governmental or regulatory authority except where the failure to
obtain any such consent, approval or authorization of, or declaration, filing
or registration with, any governmental or regulatory authority would not have
a Bradley Material Adverse Effect.
6.7 SEC Documents. A complete list of Bradley SEC filings, including the
Form 10-K for the fiscal year ended December 31, 1993 filed by Bradley's
predecessor entity, Bradley Real Estate Trust ("Bradley Trust"), and each (A)
registration statement, (B) annual report on Form 10-K, (C) quarterly report
on Form 10-Q, (D) current report on Form 8-K, (E) proxy statement or
information statement, and (F) any other report filed with the SEC pursuant to
the Exchange Act, (in all such cases, including all exhibits, amendments and
supplements thereto) prepared by Bradley or Bradley Trust or relating to their
properties since December 31, 1993, are set forth in Section 6.7 of the
Bradley Disclosure Letter, and copies of which, in the form (including
exhibits and any amendments thereto) filed with the SEC, have previously been
provided or made available to Tucker or its counsel (collectively, the
"Bradley Reports"). The Bradley Reports were filed with the SEC in a timely
manner and constitute all forms, reports and documents required to be filed by
Bradley (including for this purpose the Bradley Trust) under the Securities
Laws subsequent to December 31, 1993. As of their respective dates, the
Bradley Reports (i) complied as to form in all material respects with the
applicable requirements of the Securities Laws and (ii) did not contain any
untrue statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements made therein, in the
light of the circumstances under which they were made, not misleading. Each of
the consolidated balance sheets of Bradley included in or incorporated by
reference into the Bradley Reports (including the related notes and schedules)
fairly presents the consolidated financial position of Bradley and the Bradley
Subsidiaries as of its date and each of the consolidated statements of income,
retained earnings and cash flows of Bradley included in or incorporated by
reference into the Bradley Reports (including any related notes and schedules)
fairly presents the results of operations, retained earnings or cash flows, as
the case may be, of Bradley and the Bradley Subsidiaries for the periods set
forth therein (subject, in the case of unaudited statements, to normal year-
end audit adjustments which would not be material in amount or effect), in
each case in accordance with generally accepted accounting principles
consistently applied during the periods involved, except as may be noted
therein and except, in the case of the unaudited statements, as permitted by
Form 10-Q of the SEC. Except as and to the extent set forth on the
consolidated balance sheet of Bradley and the Bradley Subsidiaries at December
31, 1994, including all notes thereto, or as set forth in the Bradley Reports,
neither Bradley nor any of the Bradley Subsidiaries has any material
liabilities or obligations of any nature (whether accrued, absolute,
contingent or otherwise) that would be required to be reflected on, or
reserved against in, a balance sheet of Bradley or in the notes thereto,
prepared in accordance with generally
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accepted accounting principles consistently applied, except liabilities
arising in the ordinary course of business since such date and liabilities for
expenses of attorneys, accountants and investment bankers incurred in
connection with the Merger.
6.8 Litigation. There are (i) no continuing orders, injunctions or decrees
of any court, arbitrator or governmental authority to which Bradley or any
Bradley Subsidiary is a party or by which any of its properties or assets are
bound or, to the reasonable best knowledge of Bradley, to which any of its
directors, officers, employees or agents is a party or by which any of their
properties or assets are bound, and (ii) no actions, suits or proceedings
pending against Bradley or any Bradley Subsidiary or, to the reasonable best
knowledge of Bradley, against any of its directors, officers, employees or
agents or, to the reasonable best knowledge of Bradley, threatened against
Bradley or any Bradley Subsidiary or against any of its directors, officers,
employees or agents, at law or in equity, or before or by any federal or state
commission, board, bureau, agency or instrumentality, that, in the case of
clause (i) or (ii), are reasonably likely, individually or in the aggregate,
to have a Bradley Material Adverse Effect.
6.9 Absence of Certain Changes. Except as disclosed in the Bradley Reports
filed with the SEC prior to the date hereof, since December 31, 1994, Bradley
and the Bradley Subsidiaries have conducted their business only in the
ordinary course of such business and there has not been (i) any Bradley
Material Adverse Effect; (ii) as of the date hereof, any declaration, setting
aside or payment of any dividend or other distribution with respect to the
Bradley Common Stock, except dividends of $0.33 per share paid on March 31,
June 30, 1995 and September 29, 1995; or (iii) any material change in
Bradley's accounting principles, practices or methods.
6.10 Taxes. Except as set forth in Section 6.10 of the Bradley Disclosure
Letter:
(a) Bradley and each of the Bradley Subsidiaries has paid or caused to be
paid Taxes, owed by it through the date hereof.
(b) Bradley and each of the Bradley Subsidiaries has timely filed all
federal, state, local and foreign tax returns required to be filed by any of
them through the date hereof, and all such returns completely and accurately
set forth the amount of any Taxes relating to the applicable period.
(c) Neither the IRS nor any other governmental authority is now asserting by
written notice to Bradley or any Bradley Subsidiary or, to the knowledge of
Bradley or the Bradley Subsidiaries, threatening to assert against Bradley any
deficiency or claim for additional Taxes. There is no dispute or claim
concerning any Tax liability of Bradley, either claimed or raised by any
governmental authority, or as to which any officer of Bradley has reason to
believe may be claimed or raised by any governmental authority. No claim has
ever been made by a taxing authority in a jurisdiction where Bradley does not
file reports and returns that Bradley is or may be subject to taxation by that
jurisdiction. There are no security interests on any of the assets of Bradley
or any Bradley Subsidiary that arose in connection with any failure (or
alleged failure) to pay any Taxes. Bradley has never entered into a closing
agreement pursuant to Section 7121 of the Code.
(d) Bradley has not received written notice of any audit of any tax return
filed by Bradley, no such audit is in progress, and Bradley has not been
notified by any tax authority that any such audit is contemplated or pending.
Neither Bradley nor any of the Bradley Subsidiaries has executed or filed with
the IRS or any other taxing authority any agreement now in effect extending
the period for assessment or collection of any income or other taxes, and no
extension of time with respect to any date on which a tax return was or is to
be filed by Bradley is in force. True, correct and complete copies of all
federal, state and local income or franchise tax returns filed by Bradley and
each of the Bradley Subsidiaries and all communications relating thereto have
been delivered to Tucker or made available to representatives of Tucker.
(e) Bradley and each Bradley Subsidiary has withheld and paid all taxes
required to have been withheld and paid in connection with amounts paid or
owing to any employee, independent contractor, creditor, stockholder or other
party.
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(f) Each of the Bradley Subsidiaries of which all the outstanding capital
stock is owned solely by Bradley is a Qualified REIT Subsidiary as defined in
Section 856(i) of the Code.
(g) For all applicable tax years as to which Bradley's federal income tax
returns are subject to audit and Bradley is subject to assessment for taxes
reportable therein, and at all times thereafter up to and including the date
hereof, Bradley has qualified to be treated as a REIT within the meaning of
Sections 856-860 of the Code, including, without limitation, the requirements
of Sections 856 and 857 of the Code. For the periods described in the
preceding sentence, Bradley has met all requirements necessary to be treated
as a REIT for purposes of the income tax provisions of each state in which
Bradley is subject to income tax and which provides for the taxation of REITs
in a manner similar to the treatment of REITs under Sections 856-860 of the
Code, but, with respect to each such state, only for such periods for which
Bradley's income tax returns are subject to audit and Bradley is subject to
assessment for taxes reportable therein.
6.11 Books and Records. The books of account and other financial records of
Bradley and each of the Bradley Subsidiaries are true, complete and correct in
all material respects, have been maintained in accordance with good business
practices, and are accurately reflected in all material respects in the
financial statements included in the Bradley Reports. The minute books and
other records of Bradley and each of the Bradley Subsidiaries have been made
available to Tucker, contain in all material respects accurate records of all
meetings and accurately reflect in all material respects all other corporate
action of the shareholders and directors and any committees of the Board of
Directors of Bradley and each of the Bradley Subsidiaries.
6.12 Properties. All of the real estate properties owned by Bradley and each
of the Bradley Subsidiaries are set forth in Section 6.12 of the Bradley
Disclosure Letter. Except as set forth in Section 6.12 of the Bradley
Disclosure Letter, Bradley owns fee simple title to each of the real
properties identified in the Bradley Disclosure Letter (the "Bradley
Properties"), free and clear of Encumbrances. The Bradley Properties are not
subject to any Property Restrictions, except for (i) Encumbrances and Property
Restrictions set forth in Section 6.12 of the Bradley Disclosure Letter, (ii)
Property Restrictions imposed or promulgated by law or any governmental body
or authority with respect to real property, including zoning regulations that
do not adversely affect the current use of the property, materially detract
from the value or materially interfere with the present use of the property,
(iii) Encumbrances and Property Restrictions disclosed on existing title
reports or current surveys (in either case copies of which title reports and
surveys have been delivered or made available to Tucker and are listed in
Section 6.12 of the Bradley Disclosure Letter), and (iv) mechanics',
carriers', workmen's or repairmen's liens and other Encumbrances, Property
Restrictions and other limitations of any kind, if any, which, individually or
in the aggregate, are not material in amount, do not materially detract from
the value of or materially interfere with the present use of any of the
Bradley Properties subject thereto or affected thereby, and do not otherwise
materially impair business operations conducted by Bradley and the Bradley
Subsidiaries and which have arisen or been incurred only in the ordinary
course of business. Such Encumbrances and Property Restrictions described in
Section 6.12 of the Bradley Disclosure Letter are not convertible into shares
of capital stock of Bradley or any Bradley Subsidiary nor does Bradley or any
Bradley Subsidiary hold a participating interest therein. Bradley is the named
insured in the title insurance policies set forth in Section 6.12 of the
Bradley Disclosure Letter. Such policies are maintained with respect to each
of the Bradley Properties in an amount of (i) the cost of acquisition of such
property or (ii) the cost of construction by Bradley and the Bradley
Subsidiaries of the improvements located on such property (measured at the
time of such construction), except, in each case, (x) as listed in Section
6.12 of the Bradley Disclosure Letter or (y) where the failure to maintain
such title insurance would not have a Bradley Material Adverse Effect. Such
policies are, at the date hereof, in full force and effect and no claim has
been made against any such policy. To the best knowledge of Bradley, (i) no
certificate, permit or license from any governmental authority having
jurisdiction over any of the Bradley Properties or any agreement, easement or
other right which is necessary to permit the lawful use and operation of the
buildings and improvements on any of the Bradley Properties or which is
necessary to permit the lawful use and operation of all driveways, roads and
other means of egress and ingress to and from any of the Bradley Properties
has not been obtained and is not in full force and effect, and there is no
pending threat of modification or cancellation of any of same; (ii) no written
notice of any violation of any federal, state or municipal law, ordinance,
order, regulation or
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requirement affecting any portion of any of the Bradley Properties has been
issued by any governmental authority; (iii) there are no structural defects
relating to any of the Bradley Properties; (iv) there is no Bradley Property
whose building systems are not in working order in any material respect; (v)
there is no physical damage to any Bradley Property in excess of $10,000 for
which there is no insurance in effect covering the full cost of the
restoration; or (vi) there is no current renovation or restoration to any
Bradley Property, the cost of which exceeds $10,000. Except as noted in
Section 6.12 of the Bradley Disclosure Letter, Bradley and the Bradley
Subsidiaries have valid and subsisting leases for all leased Bradley
Properties, the use and occupancy of each of the Bradley Properties complies
in all material respects with all applicable codes and zoning laws and
regulations, and Bradley has no knowledge of any pending or threatened
proceeding or action that will in any manner affect the size of, use of,
improvements on, construction on, or access to any of the Bradley Properties,
with such exceptions as are not material and do not interfere with the use
made and proposed to be made of such Bradley Properties. Neither Bradley nor
any of the Bradley Subsidiaries has received any notice to the effect that (A)
any condemnation or rezoning proceedings are pending or threatened with
respect to any of the Bradley Properties or (B) any zoning, building or
similar law, code, ordinance, order or regulation is or will be violated by
the continued maintenance, operation or use of any buildings or other
improvements on any of the Bradley Properties or by the continued maintenance,
operation or use of the parking areas.
6.13 Environmental Matters. None of Bradley, any Bradley Subsidiary or, to
the best knowledge of Bradley, any other person has caused or permitted (a)
the unlawful presence of any Hazardous Materials on any of the Bradley
Properties, or (b) any unlawful spills, releases, discharges or disposal of
Hazardous Materials to have occurred or be presently occurring on or from any
of the Bradley Properties as a result of any construction on or operation and
use of such properties, which presence or occurrence would, individually or in
the aggregate, have a Bradley Material Adverse Effect; and in connection with
the construction on or operation and use of the Bradley Properties, neither
Bradley nor any of the Bradley Subsidiaries has failed to comply, in any
material respect, with any applicable local, state or federal environmental
law, regulation, ordinance or administrative and judicial order relating to
the generation, recycling, reuse, sale, storage, handling, transport and
disposal of any Hazardous Materials.
6.14 Employee Benefit Plans. All employee benefits plans (within the meaning
of Section 3(3) of ERISA) and other benefit arrangements covering employees of
Bradley and the Bradley Subsidiaries (the "Bradley Benefit Plans") are listed
in Section 6.14 of the Bradley Disclosure Letter. True and complete copies of
the Bradley Benefit Plans have been provided or made available to Tucker. To
the extent applicable, the Bradley Benefit Plans have been administered in all
material respects in accordance with their terms and comply, in all material
respects, with the applicable requirements of ERISA and the Code. Any Bradley
Benefit Plan intended to be qualified under Section 401(a) of the Code has
received a favorable determination letter from the IRS or a determination
letter request has been filed with the IRS with respect to any such plan and
is still pending. No Bradley Benefit Plan is covered by Title IV of ERISA or
Section 412 of the Code. No Bradley Benefit Plan nor Bradley or any of the
Bradley Subsidiaries has incurred any liability or penalty under Section 4975
of the Code or Section 502(i) of ERISA. There are no pending or anticipated
claims against or otherwise involving any of the Bradley Benefit Plans and no
suit, action or other litigation (excluding claims for benefits incurred in
the ordinary course of Bradley Benefit Plan activities) has been brought
against or with respect to any such Bradley Benefit Plan. All material
contributions required to be made as of the date hereof to the Bradley Benefit
Plans have been made or provided for. Neither Bradley nor any entity under
"common control" with Bradley within the meaning of ERISA Section 4001 has
contributed to, or been required to contribute to, any "multiemployer plan"
(as defined in Sections 3(37) and 4001(a)(3) of ERISA). Except as otherwise
required by Sections 601 through 608 of ERISA, Section 4980B of the Code and
applicable state laws, Bradley does not maintain or contribute to any plan or
arrangement which provides or has any liability to provide life insurance,
medical or other employee welfare benefits to any employee or former employee
upon his retirement or termination of employment and Bradley has never
represented, promised or contracted (whether in oral or written form) to any
employee or former employee that such benefits would be provided. Except as
disclosed in the Bradley Reports, the execution of, and performance of the
transactions contemplated in, this Agreement will not (either alone or upon
the occurrence of any additional subsequent events directly related to the
transaction
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contemplated herein) constitute an event under any Bradley Benefit Plan that
will or may result in any payment (whether of severance pay or otherwise),
acceleration, forgiveness of indebtedness, vesting, distribution, increase in
benefits or obligations to fund benefits with respect to any employee,
director or consultant of Bradley or any Bradley Subsidiary.
6.15 Labor Matters. Neither Bradley nor any Bradley Subsidiary is a party
to, or bound by, any collective bargaining agreement, contract or other
agreement or understanding with a labor union or labor union organization.
There is no unfair labor practice or labor arbitration proceeding pending or,
to the knowledge of Bradley, threatened against Bradley or any of the Bradley
Subsidiaries relating to their business, except for any such proceeding which
would not have a Bradley Material Adverse Effect. To the knowledge of Bradley,
there are no organizational efforts with respect to the formation of a
collective bargaining unit presently being made or threatened involving
employees of Bradley or any of the Bradley Subsidiaries.
6.16 No Brokers. Neither Bradley nor any of the Bradley Subsidiaries has
entered into any contract, arrangement or understanding with any person or
firm which may result in the obligation of such entity or Tucker to pay any
finder's fees, brokerage or agent's commissions or other like payments in
connection with the negotiations leading to this Agreement or the consummation
of the transactions contemplated hereby, except that Bradley has retained
Alex. Brown as its financial advisor, the arrangements with which have been
disclosed in writing to Tucker prior to the date hereof. Other than the
foregoing arrangements and Tucker's arrangements set forth in Section 5.18 of
this Agreement and Section 5.18 of the Tucker Disclosure Letter, Bradley is
not aware of any claim for payment of any finder's fees, brokerage or agent's
commissions or other like payments in connection with the negotiations leading
to this Agreement or the consummation of the transactions contemplated hereby.
6.17 Opinion of Financial Advisor. Bradley has received the opinion of Alex.
Brown to the effect that, as of the date hereof, the Exchange Ratio is fair to
the holders of Bradley Common Stock from a financial point of view, and has
delivered a true and correct copy of such opinion to Tucker.
6.18 Tucker Stock Ownership. Neither Bradley nor any of the Bradley
Subsidiaries owns any shares of capital stock of Tucker or other securities
convertible into capital stock of Tucker.
6.19 Related Party Transactions. Set forth in Section 6.19 of the Bradley
Disclosure Letter is a list of all arrangements, agreements and contracts
entered into by Bradley or any of the Bradley Subsidiaries (which are or will
be in effect as of or after the date of this Agreement) with (i) any
consultant in excess of $25,000 or which may not be terminated at will by
Bradley, (ii) any person who is an officer, director or affiliate of Bradley
or any of the Bradley Subsidiaries, any relative of any of the foregoing or
any entity of which any of the foregoing is an affiliate or (iii) any person
who acquired Bradley Common Stock in a private placement. All such documents
are listed in Section 6.19 of the Bradley Disclosure Letter and the copies of
such documents, which have previously been provided or made available to
Tucker and its counsel, are true and correct.
6.20 Contracts and Commitments. Section 6.20 of the Bradley Disclosure
Letter sets forth (i) all notes, debentures, bonds and other evidence of
indebtedness which are secured or collateralized by mortgages, deeds of trust
or other security interests in the Bradley Properties or personal property of
Bradley and each of the Bradley Subsidiaries and (ii) each Commitment entered
into by Bradley or any of the Bradley Subsidiaries which may result in total
payments or liability in excess of $10,000. Copies of the foregoing are listed
in Section 6.20 of the Bradley Disclosure Letter and the copies of such
documents, which have previously been provided or made available to Tucker and
its counsel, are true and correct copies. None of Bradley or any of the
Bradley Subsidiaries has received any notice of a default that has not been
cured under any of the documents described in clause (i) above or is in
default respecting any payment obligations thereunder beyond any applicable
grace periods, except where such default would not have a Bradley Material
Adverse Effect. All options of Bradley or any of the Bradley Subsidiaries to
purchase real property are set forth in Section 6.20 of the Bradley Disclosure
Letter and such options and Bradley's or any of the Bradley Subsidiaries'
rights thereunder are in full force and effect. All joint venture agreements
to which Bradley or any of the Bradley Subsidiaries is a party are set forth
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in Section 6.20 of the Bradley Disclosure Letter and neither Bradley nor any
of the Bradley Subsidiaries is in default with respect to any obligations,
which individually or in the aggregate are material, thereunder.
6.21 Development Rights. Set forth in Section 6.21 of the Bradley Disclosure
Letter is a list of all agreements entered into by Bradley or any of the
Bradley Subsidiaries relating to the development or construction of real
estate properties. The copies of such agreements are listed in Section 6.21 of
the Bradley Disclosure Letter and the copies of such documents, which have
previously been provided or made available to Tucker and its counsel, are true
and correct.
6.22 Bradley Common Stock. The issuance and delivery by Bradley of shares of
Bradley Common Stock in connection with the Merger and this Agreement have
been duly and validly authorized by all necessary corporate action on the part
of Bradley except for the approval of its stockholders contemplated by this
Agreement. The shares of Bradley Common Stock to be issued in connection with
the Merger and this Agreement, when issued in accordance with the terms of
this Agreement, will be validly issued, fully paid, nonassessable and free of
preemptive rights.
6.23 Convertible Securities. Bradley has no outstanding options, warrants or
other securities exercisable for, or convertible into, shares of Bradley
Common Stock, the terms of which would require any anti-dilution adjustments
by reason of the consummation of the transactions contemplated hereby.
6.24 Disclosure. The representations, warranties and statements made by
Bradley in this Agreement, the Ancillary Agreements and in the Bradley
Disclosure Letter and in the certificates and other documents, delivered
pursuant hereto do not contain any untrue statement of a material fact, and,
when taken together, do not omit to state any material fact necessary to make
such representations, warranties and statements, in light of the circumstances
under which they are made, not misleading.
6.25 Definition of Bradley's Knowledge. As used in this Agreement, the
phrase "to the knowledge of Bradley" or "to the best knowledge of Bradley" (or
words of similar import) means the knowledge or the best knowledge of those
individuals identified in Section 6.25 of the Bradley Disclosure Letter, and
includes any fact, matter or circumstance which any of such individuals, as an
ordinary and prudent business person employed in the same capacity in the same
type and size of business as Bradley, should have known.
ARTICLE 7
7. Covenants.
7.1 Acquisition Proposals. Unless and until this Agreement shall have been
terminated in accordance with its terms, Tucker agrees and covenants (a) that
neither it nor any Tucker Subsidiary shall, and each of them shall direct and
use its best efforts to cause its respective officers, directors, employees,
agents and representatives (including, without limitation, any investment
banker, attorney or accountant retained by it or any of the Tucker
Subsidiaries) not to, directly or indirectly, initiate, solicit or encourage
any inquiries or the making or implementation of any proposal or offer
(including, without limitation, any proposal or offer to its stockholders)
with respect to a merger, acquisition, tender offer, exchange offer,
consolidation or similar transaction involving, or any purchase of 10% or more
of the assets or any equity securities or partnership interests (including,
without limitation, TOP Units) of, Tucker or any Tucker Subsidiary, other than
the transactions contemplated by this Agreement (any such proposal or offer
being hereinafter referred to as an "Acquisition Proposal") or engage in any
negotiations concerning, or provide any confidential information or data to,
or have any discussions with, any person relating to an Acquisition Proposal,
or otherwise facilitate any effort or attempt to make or implement an
Acquisition Proposal; (b) that Tucker will immediately cease and cause to be
terminated any existing activities, discussions or negotiations with any
parties conducted heretofore with respect to any of the foregoing and will
take the necessary steps to inform the individuals or entities referred to
above of the obligations undertaken in this Section 7.1; and (c) that Tucker
will notify Bradley immediately if any such inquiries or proposals are
received by, any such information is requested from, or any such negotiations
or discussions are sought to be initiated or continued with, it; provided,
however, that nothing contained in this Section 7.1 shall
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prohibit the Board of Directors of Tucker, from (i) furnishing information to
or entering into discussions or negotiations with, any person or entity that
makes an unsolicited bona fide Acquisition Proposal, if, and only to the
extent that, (A) the Board of Directors of Tucker, after consultation with and
based upon the advice of Mayer, Brown & Platt, or another nationally
recognized law firm selected by Tucker, determines in good faith that such
action is required for the Board of Directors to comply with its fiduciary
duties to stockholders under applicable law, (B) prior to furnishing such
information to, or entering into discussions or negotiations with, such person
or entity, Tucker provides written notice to Bradley to the effect that it is
furnishing information to, or entering into discussions or negotiations with,
such person or entity, and (C) Tucker keeps Bradley informed of the status of
any such discussions or negotiations; and (ii) to the extent applicable,
complying with Rule 14e-2 and Rule 14a-9 promulgated under the Exchange Act
with regard to an Acquisition Proposal. Notwithstanding anything to the
contrary set forth herein, nothing in this Section 7.1 shall (x) permit Tucker
to terminate this Agreement (except as specifically provided in Article 9
hereof), (y) except as specifically provided in Article 9 hereof, permit
Tucker or any Tucker Subsidiary to enter into any agreement with respect to an
Acquisition Proposal during the term of this Agreement (it being agreed that
during the term of this Agreement, neither Tucker nor any Tucker Subsidiary
shall enter into any agreement with any person that provides for, or in any
way facilitates, an Acquisition Proposal), or (z) affect any other obligation
of any party under this Agreement.
7.2 Conduct of Businesses.
(a) Prior to the Effective Time, except as specifically permitted by this
Agreement, unless the other party has consented in writing thereto, Bradley
and Tucker:
(i) Shall use their reasonable best efforts, and shall cause each of
their respective Subsidiaries to use their reasonable best efforts, to
preserve intact their business organizations and goodwill and keep
available the services of their respective officers and employees;
(ii) Shall confer on a regular basis with one or more representatives of
the other to report operational matters of materiality and, subject to
Section 7.1, any proposals to engage in material transactions;
(iii) Shall promptly notify the other of any material emergency or other
material change in the condition (financial or otherwise), business,
properties, assets, liabilities, prospects or the normal course of their
businesses or in the operation of their properties, any material
governmental complaints, investigations or hearings (or communications
indicating that the same may be contemplated), or the breach in any
material respect of any representation or warranty contained herein; and
(iv) Shall promptly deliver to the other true and correct copies of any
report, statement or schedule filed with the SEC subsequent to the date of
this Agreement.
(b) Prior to the Effective Time, unless Bradley has consented as set forth
below in this clause (b) Tucker:
(i) Shall, and shall cause each Tucker Subsidiary to, conduct its
operations according to their usual, regular and ordinary course in
substantially the same manner as heretofore conducted, subject to clauses
(ii)-(xii) below;
(ii) Shall not, and shall cause each Tucker Subsidiary not to, acquire,
enter into an option to acquire or exercise an option or contract to
acquire additional real property, incur additional indebtedness, encumber
assets or commence construction of, or enter into any agreement or
commitment to develop or construct, shopping centers or any other type of
real estate projects (including, but not limited, to options to purchase
real property listed on Section 5.29 of the Tucker Disclosure Letter),
except that (i) Tucker may incur additional indebtedness under the Amended
and Restated Revolving Credit Agreement dated as of June 27, 1994 among
TOP, Tucker and The First National Bank of Boston, as agent, and (ii)
except that Tucker may extend the maturity of the current mortgage
financing encumbering the Pavilion at Mequon until June 30, 1996 upon the
same terms and conditions which are currently in effect for such financing;
(iii) Shall not amend its Charter or Bylaws, and shall cause each Tucker
Subsidiary not to amend its Charter, Bylaws, joint venture documents,
partnership agreements or equivalent documents except (A) as contemplated
by this Agreement or (B) in the event that the Merger is not consummated
prior to April 1,
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1996, Tucker may adopt an amendment to the TOP Partnership Agreement,
substantially in the form of Exhibit I hereto;
(iv) Shall not (A) except pursuant to the exercise of options, warrants,
conversion rights and other contractual rights existing on the date hereof
and disclosed pursuant to this Agreement, issue any shares of its capital
stock, effect any stock split, reverse stock split, stock dividend,
recapitalization or other similar transaction, (B) grant, confer or award
any option, warrant, conversion right or other right not existing on the
date hereof to acquire any shares of its capital stock, (C) increase any
compensation or enter into or amend any employment agreement with any of
its present or future officers or directors, or (D) adopt any new employee
benefit plan (including any stock option, stock benefit or stock purchase
plan) other than the Severance Plan and the Severance Agreements or amend
any existing employee benefit plan in any material respect, except for
changes which are less favorable to participants in such plans (in
connection with the foregoing, Tucker hereby agrees that (i) the aggregate
payments which may be paid after the date hereof under the Tucker Property
Manager Bonus Program shall not exceed $150,000 and (ii) Tucker shall award
a maximum of $25,000 as bonus compensation for employees who are not
executive officers at or immediately prior to the Effective Time);
(v) Shall not (A) declare, set aside or pay any dividend or make any
other distribution or payment with respect to any shares of its capital
stock, except in compliance with Section 7.15 of this Agreement, or (B)
except in connection with the use of shares of capital stock to pay the
exercise price or tax withholding in connection with the Tucker Stock
Option Plan, directly or indirectly redeem, purchase or otherwise acquire
any shares of its capital stock or capital stock of any of the Tucker
Subsidiaries, or make any commitment for any such action;
(vi) Shall not, and shall not permit any of the Tucker Subsidiaries to,
sell, lease or otherwise dispose of (A) any Tucker Properties or any
portion thereof or any of the capital stock of or partnership or other
interests in any of the Tucker Subsidiaries or (B) except in the ordinary
course of business, any of its other assets which are material,
individually or in the aggregate;
(vii) Shall not, and shall not permit any of the Tucker Subsidiaries to,
make any loans, advances or capital contributions to, or investments in,
any other person;
(viii) Shall not, and shall not permit any of the Tucker Subsidiaries to,
pay, discharge or satisfy any claims, liabilities or obligations (absolute,
accrued, asserted or unasserted, contingent or otherwise), other than the
payment, discharge or satisfaction, in the ordinary course of business
consistent with past practice or in accordance with their terms, of
liabilities reflected or reserved against in, or contemplated by, the most
recent consolidated financial statements (or the notes thereto) of Tucker
included in the Tucker Reports or incurred in the ordinary course of
business consistent with past practice;
(ix) Shall not, and shall not permit any of the Tucker Subsidiaries to,
enter into any Commitment which may result in total payments or liability
by or to it in excess of $25,000 (provided, however, that nothing contained
in this clause (ix) shall permit Tucker or any Tucker Subsidiary to take
any action prohibited by the other provisions of this Section 7.2);
provided further, that notwithstanding anything in this Section 7.2(b) to
the contrary, Tucker's current Senior Vice President of Asset Management
shall be permitted on behalf of Tucker or a Tucker Subsidiary to enter into
a Commitment (A) to make any repairs and/or prevent damage to any Tucker
Properties as is necessary in the event of an emergency situation as long
as he uses his reasonable best efforts to contact Bradley prior to entering
into such Commitment and provides Bradley with a copy of such Commitment on
the day after such Commitment is entered into and (B) to the extent that
the failure to enter into such Commitment will result in Tucker being in
default under the terms of any of the Tucker Leases so long as Tucker has
provided Bradley with five days prior written notice that it is entering
into such Commitment;
(x) Except for the Severance Plan and the Severance Agreements, shall
not, and shall not permit any of the Tucker Subsidiaries to, enter into any
Commitment with any officer, director, consultant or affiliate of Tucker or
any of the Tucker Subsidiaries;
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(xi) Shall provide Bradley with a reasonable opportunity to review any
comment on any federal income tax returns filed by Tucker or any Tucker
Subsidiary prior to the Effective Time; and
(xii) Shall not, without prior notification and consultation with
Bradley, terminate any employee under circumstances which would result in
severance payments to such employee pursuant to the Severance Plan or pay
any severance benefits to any employee under the terms of the Severance
Plan on account of such employee's purported termination for "Good Reason"
(within the meaning of the Severance Plan) on account of a substantial
adverse change in his position, authorities, responsibilities or status.
Bradley shall respond to any consent requested by Tucker pursuant to this
Section 7.2(b) within five (5) business days of the receipt of such
request. In the event no response is received by Tucker by the expiration
of such five business day period, such consent shall be deemed given.
(c) Notwithstanding anything to the contrary set forth in this Agreement and
without limiting any of the other rights of Bradley set forth herein, between
the date of this Agreement and the Effective Time, Bradley and the Bradley
Subsidiaries may enter into leases with respect to all or any portion of the
Bradley Properties, acquire, lease, enter into an option to acquire, lease or
exercise an option or contract to acquire, additional real property, incur
additional indebtedness, encumber assets or commence construction of, or enter
into any agreement or commitment to develop or construct, shopping centers or
other real estate projects.
7.3 Meetings of Stockholders. Each of Bradley and Tucker will take all
action necessary in accordance with applicable law and its Charter and Bylaws
to convene a meeting of its stockholders as promptly as practicable to
consider and vote upon the approval of this Agreement and the transactions
contemplated hereby. The Board of Directors of Bradley and Tucker each shall
recommend that its stockholders approve this Agreement and the transactions
contemplated hereby and Bradley and Tucker each shall use their reasonable
best efforts to obtain such approval, including, without limitation, by timely
mailing the joint proxy statement/prospectus contained in the Form S-4 (as
defined in Section 7.7 hereof) to their respective stockholders; provided,
however, that nothing contained in this Section 7.3 shall prohibit the Board
of Directors of Bradley or the Board of Directors of Tucker from failing to
make such recommendation or using their reasonable best efforts to obtain such
approval if the Board of Directors of Bradley or Tucker, as the case may be,
has determined in good faith, after consultation with and based upon the
advice of Mayer, Brown & Platt or Goodwin, Procter & Hoar, or another
nationally recognized firm selected by Tucker or Bradley, as the case may be,
that such action is necessary for such Board of Directors to comply with its
fiduciary duties to its stockholders under applicable law. Bradley and Tucker
shall coordinate and cooperate with respect to the timing of such meetings and
shall use their reasonable best efforts to hold such meetings on the same day.
It shall be a condition to the mailing of the Form S-4 that (i) Bradley shall
have received a "comfort" letter from Coopers & Lybrand LLP, independent
public accountants for Tucker, dated as of a date within two business days
before the date on which the Form S-4 shall become effective, with respect to
the financial statements of Tucker included or incorporated in the Form S-4,
in form and substance reasonably satisfactory to Bradley, and customary in
scope and substance for "comfort" letters delivered by independent public
accountants in connection with registration statements and proxy statements
similar to the Form S-4, and (ii) Tucker shall have received a "comfort"
letter from KPMG Peat Marwick LLP, independent public accountants for Bradley,
dated as of a date within two business days before the date on which the Form
S-4 shall become effective, with respect to the financial statements of
Bradley included or incorporated in the Form S-4, in form and substance
reasonably satisfactory to Tucker, and customary in scope and substance for
"comfort" letters delivered by independent public accountants in connection
with registration statements and proxy statements similar to the Form S-4.
7.4 Filings; Other Action. Subject to the terms and conditions herein
provided, Tucker and Bradley shall: (a) to the extent required, promptly make
their respective filings and thereafter make any other required submissions
under the HSR Act with respect to the Merger; (b) use all reasonable best
efforts to cooperate with one another in (i) determining which filings are
required to be made prior to the Effective Time with, and which consents,
approvals, permits or authorizations are required to be obtained prior to the
Effective Time from, governmental or regulatory authorities of the United
States, the several states and foreign jurisdictions and any
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third parties in connection with the execution and delivery of this Agreement,
and the Ancillary Agreements and the consummation of the transactions
contemplated by such agreements and (ii) timely making all such filings and
timely seeking all such consents, approvals, permits or authorizations; (c)
use all reasonable best efforts to obtain in writing any consents required
from third parties to effectuate the Merger, such consents to be in reasonably
satisfactory form to Tucker and Bradley; and (d) use all reasonable best
efforts to take, or cause to be taken, all other action and do, or cause to be
done, all other things necessary, proper or appropriate to consummate and make
effective the transactions contemplated by this Agreement and the Ancillary
Agreements. If, at any time after the Effective Time, any further action is
necessary or desirable to carry out the purpose of this Agreement or the
Ancillary Agreements, the proper officers and directors of Bradley and Tucker
shall take all such necessary action.
7.5 Inspection of Records. From the date hereof to the Effective Time, each
of Tucker and Bradley shall allow all designated officers, attorneys,
accountants and other representatives of the other access at all reasonable
times to the records and files, correspondence, audits and properties, as well
as to all information relating to commitments, contracts, titles and financial
position, or otherwise pertaining to the business and affairs, of Tucker and
Bradley and their respective subsidiaries.
7.6 Publicity. Bradley and Tucker shall consult with each other before
issuing any press release or otherwise making any public statements with
respect to this Agreement or any transaction contemplated herein and shall not
issue any such press release or make any such public statement without the
prior consent of the other party, which consent shall not be unreasonably
withheld; provided, however, that a party may, without the prior consent of
the other party, issue such press release or make such public statement as may
be required by law or the rules of the NYSE if it has used its reasonable best
efforts to consult with the other party and to obtain such party's consent but
has been unable to do so in a timely manner.
7.7 Registration Statement. Bradley and Tucker shall cooperate and promptly
prepare and Bradley shall file with the SEC as soon as practicable a
Registration Statement on Form S-4 under the Securities Act, with respect to
the shares of Bradley Common Stock issuable in the Merger, a portion of which
Form S-4 shall also serve as the joint proxy statement with respect to the
meetings of the stockholders of Tucker and of Bradley in connection with the
Merger (in its entirety, the "Form S-4"). The respective parties will cause
the Form S-4 to comply as to form in all material respects with the applicable
provisions of the Securities Act, the Exchange Act and the rules and
regulations thereunder. Each of Bradley and Tucker shall furnish all
information about itself and its business and operation and all necessary
financial information to the other as the other may reasonably request in
connection with the preparation of the Form S-4. Bradley shall use its
reasonable best efforts, and Tucker will cooperate with Bradley, to have the
Form S-4 declared effective by the SEC as promptly as practicable. Bradley
shall use its reasonable best efforts to obtain, prior to the effective date
of the Form S-4, all necessary state securities law or "Blue Sky" permits or
approvals required to carry out the transactions contemplated by this
Agreement and will pay all expenses incident thereto. Bradley agrees that the
Form S-4 and each amendment or supplement thereto at the time of mailing
thereof and at the time of the respective meetings of stockholders of Bradley
and Tucker, will not include an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading; provided, however, that the foregoing shall not apply to the
extent that any such untrue statement of a material fact or omission to state
a material fact was made by Bradley in reliance upon and in conformity with
information concerning Tucker furnished to Bradley by Tucker for use in the
Form S-4. Tucker agrees that the information provided by it for inclusion in
the Form S-4 and each amendment or supplement thereto, at the time of mailing
thereof and at the time of the respective meetings of stockholders of Bradley
and Tucker, will not include an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading. Bradley will advise and deliver copies (if any) to Tucker,
promptly after it receives notice thereof, of the time when the Form S-4 has
become effective or any supplement or amendment has been filed, the issuance
of any stop order, the suspension of the qualification of the Bradley Common
Stock issuable in connection with the Merger for offering or sale in any
jurisdiction, or
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any request by the SEC for amendment of the Form S-4 or comments thereon and
responses thereto or requests by the SEC for additional information.
7.8 Listing Application. Bradley shall promptly prepare and submit to the
NYSE a listing application covering the shares of Bradley Common Stock
issuable in the Merger, and shall use its best efforts to obtain, prior to the
Effective Time, approval for the listing of such Bradley Common Stock, subject
to official notice of issuance.
7.9 Further Action. Each party hereto shall, subject to the fulfillment at
or before the Effective Time of each of the conditions of performance set
forth herein or the waiver thereof, perform such further acts and execute such
documents as may reasonably be required to effect the Merger. Without limiting
the foregoing, at the Closing, Tucker shall deliver, deeds, affidavits or
other documents necessary for Bradley to obtain endorsements to existing title
insurance policies or new title insurance policies which (i) insure that
Bradley is the general partner (by merger) of the record owner of the Tucker
Properties, subject only to the Encumbrances and (ii) contain a so-called
"non-imputation" endorsement (such non-imputation endorsement insuring that
Bradley will not be charged with the imputed knowledge of Tucker, the Tucker
Subsidiaries and Affiliates thereof). In connection with the Closing, Tucker
and each Tucker Subsidiary shall use its best efforts to deliver to Bradley
such deeds, bills of sale, assignments, certificates and affidavits as are
required to effectuate the consummation of the transactions described herein.
7.10 Affiliates of Tucker.
(a) At least 30 days prior to the Closing Date, Tucker shall deliver to
Bradley a list of names and addresses of those persons who were, in Tucker's
reasonable judgment, at the record date for its stockholders' meeting to
approve the Merger, "affiliates" (each such person, an "Affiliate") of Tucker
within the meaning of Rule 145. Tucker shall provide Bradley such information
and documents as Bradley shall reasonably request for purposes of reviewing
such list. Tucker shall use its reasonable best efforts to deliver or cause to
be delivered to Bradley, prior to the Closing Date, from each of the
Affiliates of Tucker identified in the foregoing list, an Affiliate Letter in
the form attached hereto as Exhibit D. Bradley shall be entitled to place
legends as specified in such Affiliate Letters on the certificates evidencing
any shares of Bradley Common Stock to be received by such Affiliates pursuant
to the terms of this Agreement, and to issue appropriate stop transfer
instructions to the transfer agent for the shares of Bradley Common Stock,
consistent with the terms of such Affiliate Letters.
(b) Bradley shall file the reports required to be filed by it under the
Exchange Act and the rules and regulations adopted by the SEC thereunder, and
it will take such further action as any Affiliate of Tucker may reasonably
request, all to the extent required from time to time to enable such Affiliate
to sell shares of Bradley Common Stock received by such Affiliate in the
Merger without registration under the Securities Act pursuant to (i) Rule
145(d)(1) or (ii) any successor rule or regulation hereafter adopted by the
SEC.
7.11 Expenses. Subject to the provisions of Article 9, all costs and
expenses incurred in connection with this Agreement and the transactions
contemplated hereby shall be paid by the party incurring such expenses, except
that (a) the filing fee in connection with the HSR Act filing, if any, (b) the
filing fee in connection with the filing of the Form S-4 or Proxy
Statement/Prospectus with the SEC and (c) the expenses incurred for printing
and mailing the Form S-4, shall be shared equally by Tucker and Bradley. All
costs and expenses for professional services rendered pursuant to the
transactions contemplated by this Agreement including, but not limited to,
investment banking and legal services, will be paid by each party incurring
such services.
7.12 Indemnification.
(a) Bradley agrees that all rights to indemnification or exculpation now
existing in favor of the directors, officers, employees, advisors and agents
of Tucker and the Tucker Subsidiaries (including, without limitation, TOP) as
provided in their respective charters or By-Laws in effect as of the date
hereof with respect to matters occurring at or prior to the Effective Time
shall survive the Merger and shall continue in full force and effect.
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For a period of six years after the Effective Time, Bradley shall not amend,
repeal or otherwise modify the provisions in its Charter and Bylaws providing
for exculpation of director liability and indemnification in any manner that
would materially and adversely affect the rights thereunder of individuals who
at any time prior to the Effective Time were directors, officers, employees,
advisors or agents of Tucker in respect of actions or omissions occurring at
or prior to the Effective Time (including, without limitation, the
transactions contemplated by this Agreement), unless such modification is
required by law; provided, however, that in the event any claim or claims are
asserted or made either prior to the Effective Time or within such six year
period, all rights to indemnification in respect of any such claim or claims
shall continue until disposition of any and all such claims. In connection
with the execution of this Agreement, all directors of Tucker shall enter into
amendments to their existing indemnification agreements with Tucker and
Bradley, substantially in the form of Exhibit H hereto, which will be
effective as of the Effective Time. Nothing in the following paragraphs of
this Section 7.12 shall create an inference, either by omission or inclusion,
that limits in any way the rights set forth herein.
(b) In addition to the rights provided in Section 7.12(a) above, in the
event of any threatened or actual claim, action, suit, proceeding or
investigation, whether civil, criminal or administrative, including, without
limitation, any action by or on behalf of any or all security holders of
Tucker or Bradley or by or in the right of Tucker or Bradley or any claim,
action, suit, proceeding or investigation in which any person who is now, or
has been, at any time prior to the date hereof, or who becomes prior to the
Effective Time, a director of Tucker (the "Indemnified Parties"), is, or is
threatened to be, made a party based in whole or in part on, or arising in
whole or in part out of, or pertaining to (i) the fact that he is or was a
director of Tucker or any of the Tucker Subsidiaries (including, without
limitation, TOP) or any action or omission by such person in his capacity as a
director, or (ii) this Agreement or the transactions contemplated by this
Agreement, whether in any case asserted or arising before or after the
Effective Time, Bradley on one hand and the Indemnified Parties on the other
hand, hereto agree to cooperate and use their reasonable best efforts to
defend against and respond thereto. It is understood and agreed that, after
the Effective Time, Bradley shall indemnify and hold harmless, as and to the
full extent permitted by applicable law, each Indemnified Party against any
losses, claims, liabilities, expenses (including reasonable attorneys' fees
and expenses), judgments, fines and amounts paid in settlement in connection
with any such threatened or actual claim, action, suit, proceeding or
investigation. In addition, after the Effective Time, in the event of any such
threatened or actual claim, action, suit, proceeding or investigation, Bradley
shall promptly pay and advance expenses and costs incurred by each Indemnified
Person as they become due and payable in advance of the final disposition of
any claim, action, suit, proceeding or investigation to the fullest extent and
in the manner permitted by law. Notwithstanding the foregoing, Bradley shall
pay for only one counsel and one local counsel for all Indemnified Parties
unless the use of one such counsel and one local counsel for such Indemnified
Parties would present such counsel with a conflict of interest, in which case
Bradley shall employ other counsel to the extent necessary to avoid a conflict
of interest with any counsel or party involved in the matter. Notwithstanding
anything to the contrary set forth in this Agreement, Bradley (i) shall not be
liable for any settlement effected without its prior written consent, and (ii)
shall not have any obligation hereunder to any Indemnified Party if a court of
competent jurisdiction shall determine in a final and non-appealable order
that indemnification of such Indemnified Party in the manner contemplated
hereby is prohibited by applicable law. In the event of such a final and non-
appealable determination by a court that such indemnification is prohibited by
applicable law, the Indemnified Person shall promptly refund to Bradley the
amount of all expenses theretofore advanced pursuant hereto. Any Indemnified
Party wishing to claim indemnification under this Section, upon learning of
any such claim, action, suit, proceeding or investigation, shall promptly
notify Bradley of such claim and the relevant facts and circumstances with
respect thereto, provided that the failure to provide such notice shall not
affect the obligations of Bradley except to the extent such failure to notify
materially prejudices Bradley's ability to defend such claim, action, suit,
proceeding or investigation.
(c) At or prior to the Effective Time, Bradley shall purchase directors'
liability insurance policy coverage for Tucker's directors and Executive
Officers as provided in Schedule 7.12 hereto.
(d) This Section 7.12 is intended for the irrevocable benefit of, and to
grant third party rights to, the Indemnified Parties and their successors,
assigns and heirs and shall be binding on all successors and assigns of
Bradley. Each of the Indemnified Parties shall be entitled to enforce the
covenants contained in this Section 7.12
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and Bradley acknowledges and agrees that each Indemnified Party would suffer
irreparable harm and that no adequate remedy at law exists for a breach of
such covenants.
(e) To the extent permitted by law, all rights of indemnification for the
benefit of any director of Tucker shall be mandatory rather than permissive.
(f) Any determination required to be made with respect to whether a party's
conduct complies with the standards set forth in the Charter or By-Laws of the
Surviving Corporation or under applicable law shall be made by (i) Sidley &
Austin or (ii) in the event Sidley & Austin shall not be available to make
such determination, then Skadden, Arps, Slate, Meagher & Flom or (iii) in the
event that neither Sidley & Austin nor Skadden, Arps, Slate, Meagher & Flom
shall be available to make such determination, then Kirkland & Ellis, or (iv)
in the event that none of Sidley & Austin, Skadden, Arps, Slate, Meagher &
Flom or Kirkland & Ellis shall be available to make such determination, then
O'Melveny & Myers (in each case whose reasonable fees and expenses shall be
paid by the Surviving Corporation).
(g) Notwithstanding anything to the contrary set forth in this Agreement, in
the event any Indemnified Party is required to file suit against Bradley to
enforce the indemnity obligations provided for in this Section, it shall be
entitled to all expenses, including reasonable attorneys' fees and expenses,
which it has incurred in enforcing its rights hereunder.
(h) In the event that Bradley or any of its successors or assigns (i)
consolidates with or merges into any other person or entity and shall not be
the continuing or surviving corporation or entity of such consolidation or
merger or (ii) transfers or conveys all or substantially all of its properties
and assets to any person or entity, then, and in each such case, proper
provision shall be made so that the successors and assigns of Bradley assume
the obligations set forth in this Section.
7.13 Reorganization. From and after the date hereof and until the Effective
Time, neither Bradley nor Tucker nor any of their respective subsidiaries or
other affiliates shall (i) knowingly take any action, or knowingly fail to
take any action, that would jeopardize qualification of the Merger as a
reorganization within the meaning of Section 368(a)(1)(A) of the Code or (ii)
enter into any contract, agreement, commitment or arrangement with respect to
the foregoing. Following the Effective Time, Bradley shall use its best
efforts to conduct its business in a manner that would not jeopardize the
characterization of the Merger as a reorganization within the meaning of
Section 368(a) of the Code.
7.14 Certain Benefits.
(a) Bradley agrees that Tucker and the Tucker Subsidiaries, and the
Surviving Corporation and its subsidiaries after the Effective Time, will
provide benefit plans to employees of Tucker and the Tucker Subsidiaries that,
at the option of Bradley, either (i) will be no less favorable, in the
aggregate, than those provided by Bradley and the Bradley Subsidiaries to
their employees or (ii) will, in the aggregate, be no less favorable than
those provided by Tucker and the Tucker Subsidiaries to their employees
immediately prior to the date of this Agreement. Nothing contained in this
Agreement shall be construed to grant any right of continued employment to any
present employee of Tucker or any of the Tucker Subsidiaries.
(b) Except for normal increases in the ordinary course of business that are
consistent with past practices and cost increases of third party providers
necessary to maintain benefits at current levels that, in the aggregate, do
not result in a material increase in benefits or compensation expense to
Tucker or any of the Tucker Subsidiaries or as set forth in Section 5.16 of
the Tucker Disclosure Letter, Tucker will not, and will not permit any of the
Tucker Subsidiaries to, adopt or amend (except as may be required by law and
except for the establishment of the Severance Plan and the Severance
Agreements) any bonus, profit sharing, compensation, severance, termination,
stock option, pension, retirement, deferred compensation, employment or other
employee benefit agreements, trusts, plans, funds or other arrangements for
the benefit or welfare of any director, officer or employee that increase in
any manner the compensation, retirement, welfare or fringe benefits of any
director,
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officer or employee or pay any benefit not required by any existing plan or
arrangement (including without limitation the granting of stock options) or
take any action or grant any benefit not expressly required under the terms of
any existing agreements, trusts, plans, funds or other such arrangements or
enter into any contract, agreement, commitment or arrangement to any of the
foregoing.
7.15 Dividends.
(a) Prior to the Effective Time, Tucker and Bradley shall cooperate and
coordinate with each other so that (i) the record date for regular quarterly
dividends and distributions with respect to the fourth quarter of 1995 and
thereafter until the Effective Time shall occur on the same date, (ii) the
payment date for each such regular quarterly dividend and distribution shall
be on the last day of such applicable quarter, and (iii) the amount of each
such regular quarterly dividend and distribution shall not exceed $.25 per
quarter for Tucker and $.33 per quarter for Bradley.
(b) For its taxable year ending at the Effective Time (the "Short Taxable
Year") Tucker will not have any (i) "net income from foreclosure property" as
defined by Section 857(b)(4) of the Code or (ii) "net income derived from
prohibited transactions" as defined by Section 857(b)(6) of the Code.
Immediately prior to the Effective Time, Tucker will cause to be distributed a
dividend (within the meaning of Section 316 of the Code) to its stockholders
(the "Merger Dividend") of an amount such that (i) Tucker's "real estate
investment trust taxable income" as defined in Section 857(b)(2) of the Code
for the Short Taxable Year shall equal zero; (ii) Tucker's current and
accumulated earnings and profits as described in Section 312 of the Code for
the Short Taxable Year shall equal zero; and (iii) Tucker's "deduction for
dividends paid during the taxable year" (within the meaning of Sections 561
and 857(a)(1) of the Code and determined without regard to "capital gain
dividends" within the meaning of Section 857(b) of the Code) for the Short
Taxable Year will equal or exceed the amount set forth in Section 857(a)(1)(A)
and (B) of the Code.
(c) Tucker will do all things necessary to ensure that it continues to meet
all of the requirements to be treated as a REIT for all purposes under the
Code and the income tax provisions of the State of Illinois (and any other
state in which Tucker is subject to tax and which provides for the taxation of
REITs in a manner similar to the treatment of REITs under Sections 856-860 of
the Code) and shall make any and all required filings in connection therewith,
including providing Bradley with all information, documentation and assistance
Bradley may reasonably request in order for Bradley to mail the stockholder
demand letters required by Treasury Regulation 1.857-8 within 30 days after
the Effective Time and to take any other actions that may be necessary or
appropriate for Bradley, as the Surviving Corporation, to take in order to
maintain Tucker's status as a REIT through the Effective Time.
(d) Bradley shall pay a dividend in connection with the Closing to its
stockholders in an amount per share equal to the quotient obtained by dividing
(x) the Merger Dividend per share paid by Tucker pursuant to Section 7.15(b)
by (y) the Exchange Ratio.
(e) Until the Effective Time, Bradley shall not declare, set aside or pay
any dividend or make any other distribution or payment with respect to any of
its respective shares of capital stock which is "extraordinary." For the
purposes of this Agreement, a dividend, distribution or payment with respect
to capital stock shall be considered "extraordinary" if (a) the Board of
Directors of Bradley designates such cash payment as "extraordinary" when
declared or (b) the amount by which any cash payment exceeds 200% of the most
recent cash dividend declared by the Board of Directors of Bradley.
7.16 IRS Private Letter Ruling. Tucker shall cooperate and assist Bradley in
submitting an application for and obtaining the private letter ruling from the
IRS which is described in Section 8.3(i) hereto.
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ARTICLE 8
8. Conditions.
8.1 Conditions to Each Party's Obligation to Effect the Merger. The
respective obligation of each party to effect the Merger and the other
transactions contemplated herein shall be subject to the fulfillment at or
prior to the Effective Time of the following conditions, any or all of which
may be waived, in whole or in part by the parties hereto, to the extent
permitted by applicable law:
(a) This Agreement and the transactions contemplated hereby shall have been
approved by the requisite vote of stockholders of Bradley and Tucker.
(b) The waiting period applicable to the consummation of the Merger under
the HSR Act, if applicable, shall have expired or been terminated.
(c) Neither of the parties hereto shall be subject to any order, ruling or
injunction of a court of competent jurisdiction which prohibits the
consummation of the transactions contemplated by this Agreement. In the event
any such order, ruling or injunction shall have been issued, each party agrees
to use its best efforts to have any such order, ruling or injunction lifted,
stayed or reversed.
(d) The Form S-4 shall have been declared effective by the SEC under the
Securities Act, and no stop order suspending the effectiveness of the Form S-4
shall have been issued by the SEC, and no proceedings for that purpose shall
have been initiated or, to the knowledge of Bradley or Tucker, threatened by
the SEC.
(e) Bradley shall have obtained the approval for the listing of the shares
of Bradley Common Stock issuable in the Merger on the NYSE, subject to
official notice of issuance.
(f) The consents set forth in Schedule 8.1(f) hereof shall have been
obtained. All other consents, authorizations, orders and approvals of (or
filings or registrations with) any governmental commission, board, other
regulatory body or third parties required to be made or obtained by Bradley,
Tucker and their respective subsidiaries and affiliated entities in connection
with the execution, delivery and performance of this Agreement and the
Ancillary Agreements shall have been obtained or made, except where the
failure to have obtained or made any such consent, authorization, order,
approval, filing or registration, would not have (i) a Tucker Material Adverse
Effect or (ii) a Bradley Material Adverse Effect, as the case may be.
8.2 Conditions to Obligations of Tucker to Effect the Merger. The obligation
of Tucker to effect the Merger shall be subject to the fulfillment at or prior
to the Closing Date of the following conditions, unless waived by Tucker:
(a) Each of the representations and warranties of Bradley contained in this
Agreement shall be true and correct in all material respects as of the date of
this Agreement and as of the Effective Time as though made on and as of the
Effective Time and Tucker shall have received a certificate, dated the Closing
Date, signed on behalf of Bradley by the President of Bradley to the foregoing
effect.
(b) Bradley shall have performed or complied in all material respects with
all agreements and covenants required by this Agreement to be performed or
complied with by it on or prior to the Effective Time, and Tucker shall have
received a certificate, dated the Closing Date, signed on behalf of Bradley by
the President of Bradley to the foregoing effect.
(c) Tucker shall have received the opinion of Mayer, Brown & Platt, or
another nationally recognized law firm selected by Tucker, dated not less than
five business days prior to the date the Form S-4 is declared effective by the
SEC, reasonably acceptable to Tucker, and subject to customary conditions and
qualifications (including reliance, in part, on representations of Bradley and
Tucker and certain stockholders of Tucker), to the effect that the Merger will
be treated for federal income tax purposes as a tax-free reorganization
qualifying under the provisions of Sections 368(a)(1)(A) of the Code, which
opinion shall not have been withdrawn or modified in any material respect.
(d) At closing, Tucker shall have received the opinion of Goodwin, Procter &
Hoar, or another nationally recognized law firm selected by Bradley, in form
and substance reasonably satisfactory to Tucker,
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to the effect that, for all applicable tax years for which Bradley's federal
income tax returns are subject to audit and Bradley is subject to assessment
for taxes reportable therein and through the date of the Closing, Bradley has
qualified to be taxed as a REIT under Sections 856 through 860 of the Code.
(e) From the date of this Agreement through the Effective Time, there shall
not have occurred any change concerning Bradley or any of the Bradley
Subsidiaries that has had or could be reasonably likely to have a Bradley
Material Adverse Effect and Tucker shall have received a certificate, dated
the Closing Date, signed on behalf of Bradley by the President of Bradley to
the foregoing effect.
8.3 Conditions to Obligation of Bradley to Effect the Merger. The
obligations of Bradley to effect the Merger shall be subject to the
fulfillment at or prior to the Closing Date of the following conditions,
unless waived by Bradley:
(a) Each of the representations and warranties of Tucker contained in this
Agreement shall be true and correct in all material respects as of the date of
this Agreement and as of the Effective Time as though made on and as of the
Effective Time, and Bradley shall have received a certificate, dated the
Closing Date, signed on behalf of Tucker by the President of Tucker to the
foregoing effect.
(b) Tucker shall have performed or complied in all material respects with
all agreements and covenants required by this Agreement to be performed or
complied with by it on or prior to the Effective Time, and Bradley shall have
received a certificate, dated the Closing Date, signed on behalf of Tucker by
the President of Tucker to the foregoing effect.
(c) Bradley shall have received the opinion of Goodwin, Procter & Hoar, or
another nationally recognized law firm selected by Bradley, dated not less
than five business days prior to the date the Form S-4 is declared effective
by the SEC, reasonably acceptable to Bradley, and subject to customary
conditions and qualifications (including reliance, in part, on representations
of Bradley and Tucker and certain stockholders of Tucker), to the effect that
the Merger will be treated for federal income tax purposes as a tax-free
reorganization qualifying under the provisions of Sections 368(a)(1)(A) of the
Code, which opinion shall not have been withdrawn or modified in any material
respect.
(d) At closing, Bradley shall have received (i) the opinion of Mayer, Brown
& Platt, or another nationally recognized law firm selected by Tucker, in form
and substance reasonably satisfactory to Bradley, to the effect that, for the
taxable year ended December 31, 1995 and for the short taxable year ending at
the date of the Closing, Tucker has qualified to be taxed as a REIT under
Sections 856 through 860 of the Code and (ii) the opinion of Coopers & Lybrand
LLP, independent public accountants for Tucker, in form and substance
reasonably satisfactory to Bradley, to the effect that for the taxable years
ended December 31, 1993 and December 31, 1994, Tucker qualified to be taxed as
a REIT under Section 856 through 860 of the Code.
(e) From the date of this Agreement through the Effective Time, there shall
not have occurred any change concerning Tucker or any of the Tucker
Subsidiaries, that has had or could be reasonably likely to have a Tucker
Material Adverse Effect and Bradley shall have received a certificate, dated
the Closing Date, signed on behalf of Tucker by the President of Tucker to the
foregoing effect.
(f) Tucker shall have obtained and delivered to Bradley estoppel
certificates dated no earlier than 45 days prior to the Effective Time with
respect to (x) each of the leases and REA Agreements set forth on Schedule
8.3(f) hereof and (y) leases representing a total of 50% of the total rented
space of each Tucker Property, other than rented space represented by the
leases listed on Schedule 8.3(f) hereof. Such estoppel certificates shall
either be (x) substantially in the form of Exhibit E hereto or (y) in the form
required by the applicable lease.
(g) Tucker and all of the limited partners of TOP shall have executed the
amended and restated TOP Partnership Agreement in the form attached hereto as
Exhibit B and the transfers of securities contemplated by Section 1.5 of this
Agreement and all of the actions described in Section 1.6 of this Agreement
have been consummated or shall have occurred.
(h) Bradley shall have obtained a letter from Coopers & Lybrand LLP,
independent public accountants for Tucker, in form and substance reasonably
satisfactory to Bradley, certifying that (i) Tucker has satisfied the
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requirements of Section 7.15(b) of this Agreement and (ii) for federal income
tax purposes, Tucker will not have any accumulated or current earnings or
profits immediately prior to the Effective Time.
(i) Bradley shall have received a private letter ruling from the IRS, in
form and substance reasonably satisfactory to Bradley, to the effect that
following the consummation of the Merger, each of TFC and Tucker Properties
Investment, Inc. will qualify as a "qualified REIT subsidiary" of Bradley
under Section 856(i) of the Code.
ARTICLE 9
9. Termination.
9.1 Termination. This Agreement may be terminated and abandoned at any time
prior to the Effective Time, whether before or after approval and adoption of
this Agreement by the stockholders of Tucker and Bradley:
(a) by mutual written consent of Bradley and Tucker; or
(b) by either Bradley or Tucker if any United States federal or state court
of competent jurisdiction or other governmental entity shall have issued an
order, decree or ruling or taken any other action permanently restraining,
enjoining or otherwise prohibiting the Merger and such order, decree, ruling
or other action shall have become final and non-appealable, provided that the
party seeking to terminate shall have used its best efforts to appeal such
order, decree, ruling or other action; or
(c) by Bradley upon a breach of any representation, warranty, covenant or
agreement on the part of Tucker set forth in this Agreement, or if any
representation or warranty of Tucker shall have become untrue, in either case
such that the conditions set forth in Section 8.3(a) or Section 8.3(b), as the
case may be, would be incapable of being satisfied by June 30, 1996; provided,
however, that, in any case, a willful breach shall be deemed to cause such
conditions to be incapable of being satisfied for purposes of this Section
9.1(c);
(d) by Tucker upon a breach of any representation, warranty, covenant or
agreement on the part of Bradley set forth in this Agreement, or if any
representation or warranty of Bradley shall have become untrue, in either case
such that the conditions set forth in Section 8.2(a) or Section 8.2(b), as the
case may be, would be incapable of being satisfied by June 30, 1996; provided,
however, that, in any case, a willful breach shall be deemed to cause such
conditions to be incapable of being satisfied for purposes of this Section
9.1(d);
(e) by Bradley if (i) the Board of Directors of Tucker shall have failed to
make, or shall have withdrawn, amended, modified or changed its approval or
recommendation of this Agreement or any of the transactions contemplated
hereby; (ii) Tucker shall have failed as soon as practicable to mail the Form
S-4 to its stockholders or to include the recommendation of its Board of
Directors of this Agreement and the transactions contemplated hereby in the
Form S-4; (iii) the Board of Directors of Tucker shall have recommended that
stockholders of Tucker accept or approve an Acquisition Proposal by a person
other than Bradley (or Tucker or its Board shall have resolved to do such); or
(iv) Tucker or its Board of Directors shall have resolved to do any of the
foregoing;
(f) by Tucker, if the Board of Directors of Tucker recommends to Tucker's
stockholders approval or acceptance of a Acquisition Proposal by a person
other than Bradley, but only in the event that the Board of Directors of
Tucker, after consultation with and based upon the advice of Mayer, Brown &
Platt or another nationally recognized law firm, has determined in good faith
that such action is necessary for the Board of Directors of Tucker to comply
with its fiduciary duties to its stockholders under applicable law;
(g) by either Bradley or Tucker if this Agreement and the transactions
contemplated hereby shall have failed to receive the requisite vote for
approval and adoption by the stockholders of Bradley or Tucker upon the
holding of a duly convened stockholder meeting;
(h) by Tucker if (i) the Board of Directors of Bradley shall have failed to
make, or shall have withdrawn, amended, modified or changed its approval or
recommendation of this Agreement or the Merger or (ii) if the Board of
Directors of Bradley recommends to Bradley's stockholders approval or
acceptance of a proposal by a
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person other than Tucker to acquire 50% or more of the assets or stock of
Bradley, by way of merger, tender offer, exchange offer or similar
transaction; or
(i) by either Bradley or Tucker, if the Merger shall not have been
consummated on or before June 30, 1996 (other than due to the failure of the
party seeking to terminate this Agreement to perform its obligations under
this Agreement required to be performed by it at or prior to the Effective
Time).
The right of any party hereto to terminate this Agreement pursuant to this
Section 9.1 shall remain operative and in full force and effect regardless of
any investigation made by or on behalf of any party hereto, any person
controlling any such party or any of their respective employees, officers,
directors, agents, representatives or advisors, whether prior to or after the
execution of this Agreement.
9.2 Effect of Termination.
(a) In the event of the termination and abandonment of this Agreement
pursuant to Section 9.1 hereof, this Agreement shall forthwith become void and
have no effect, without any liability on the part of any party hereto or its
affiliates, directors, officers or stockholders and all rights and obligations
of any party hereto shall cease except for agreements contained in Section
10.5; provided, however, that nothing contained in this Section 9.2 shall
relieve any party from liability for any breach of this Agreement or shall
relieve Tucker from any liability under this Article 9.
(b) If (x) Bradley terminates this Agreement pursuant to Section 9.1(e)(iii)
or pursuant to 9.1(c) as a result of a willful breach by Tucker or (y) Tucker
terminates this Agreement pursuant to Section 9.1(f), then Tucker shall pay to
Bradley an amount (the "Termination Amount") in cash equal to the sum of (i)
$3,000,000, plus (ii) Bradley's out-of-pocket costs and expenses, in
connection with this Agreement and the transactions contemplated hereby,
including, without limitation, fees and disbursements of accountants,
attorneys and investment bankers, up to a maximum of $2,000,000 in accordance
with the provisions of Section 9.3.
(c) If Bradley terminates this Agreement pursuant to Section 9.1(e)(i),
9.1(e)(ii), 9.1(e)(iv) or 9.1(c) (except for a termination because of a
willful breach by Tucker in which case the provisions of Section 9.2(b) will
apply), Tucker shall pay all of Bradley's out-of-pocket costs and expenses, in
connection with this Agreement and the transactions contemplated hereby,
including, without limitation, fees and disbursements of accountants,
attorneys and investment bankers up to a maximum of $2,000,000 ("Expenses") in
accordance with the provisions of Section 9.3.
(d) If at any time prior to or within one year after termination of this
Agreement (unless such termination was pursuant to Section 9.1(a), (b), (d),
(g), (h) or (i)) Tucker enters into an agreement relating to an Acquisition
Proposal with a person other than Bradley or Tucker's Board of Directors
recommends or resolves to recommend to Tucker's stockholders approval or
acceptance of an Acquisition Proposal with a person other than Bradley, then,
upon the entry into such agreement or the making of such recommendation or
resolution, Tucker shall pay to Bradley the Termination Amount in accordance
with the provisions of Section 9.3 which amount shall be reduced by any monies
previously paid by Tucker to Bradley pursuant to Section 9.2(b) or Section
9.2(c).
(e) At any time prior to or within one year after termination of this
Agreement, Tucker shall not enter into any agreement relating to an
Acquisition Proposal with a person other than Bradley unless such agreement
provides that such person shall, upon the execution of such agreement, pay any
Termination Amount due Bradley under this Section 9.2. All such amounts shall
be paid in accordance with the provisions of Section 9.3.
(f) The parties acknowledge and agree that the provisions for payment of
Expenses and/or the Termination Amount are included herein in order to induce
Bradley to enter into this Agreement and to reimburse Bradley for incurring
the costs and expenses related to entering into this Agreement and
consummating the transactions
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contemplated by this Agreement. The parties hereto agree that Bradley's rights
to payment of the Expenses and/or Termination Amount shall be in addition to
any other rights or remedies under contract, at law or in equity to which
Bradley may be entitled.
(g) Notwithstanding any provision to the contrary herein, the aggregate
amount of the Termination Amount or Expenses, as the case may be, payable to
Bradley pursuant to this Section 9.2 shall be subject to the limitations set
forth in Section 9.3.
9.3 Payment of Termination Amount or Expenses.
(a) In the event that Tucker is obligated to pay Bradley the Termination
Amount and/or Expenses pursuant to Section 9.2 (the "Section 9.2 Amount"),
Tucker (or any other person to the extent provided by Section 9.2(d)) shall
pay to Bradley from the applicable Section 9.2 Amount deposited into escrow in
accordance with the next sentence, an amount equal to the lesser of (m) the
Section 9.2 Amount and (n) the sum of (1) the maximum amount that can be paid
to Bradley without causing Bradley to fail to meet the requirements of
Sections 856(c)(2) and (3) of the Code determined as if the payment of such
amount did not constitute income described in Sections 856(c)(2)(A)-(H) or
856(c)(3)(A)-(I) of the Code ("Qualifying Income"), as determined by Bradley's
certified public accountants, plus (2) in the event Bradley receives either
(X) a letter from Bradley's counsel indicating that Bradley has received a
ruling from the IRS described in Section 9.3(b)(ii) or (Y) an opinion from
Bradley's counsel as described in Section 9.3(b)(ii), an amount equal to the
Section 9.2 Amount less the amount payable under clause (1) above. To secure
Tucker's obligation to pay these amounts, Tucker shall deposit into escrow an
amount in cash equal to the Section 9.2 Amount with an escrow agent selected
by Bradley and on such terms (subject to Section 9.3(b)) as shall be agreed
upon by Bradley and the escrow agent. The payment or deposit into escrow of
the Section 9.2 Amount pursuant to this Section 9.3(a) shall be made within
three days of the event which gives rise to the payment of the Section 9.2
Amount by wire transfer or bank check.
(b) The escrow agreement shall provide that the Section 9.2 Amount in escrow
or any portion thereof shall not be released to Bradley unless the escrow
agent receives any one or combination of the following: (i) a letter from
Bradley's certified public accountants indicating the maximum amount that can
be paid by the escrow agent to Bradley without causing Bradley to fail to meet
the requirements of Sections 856(c)(2) and (3) of the Code determined as if
the payment of such amount did not constitute Qualifying Income or a
subsequent letter from Bradley's accountants revising that amount, in which
case the escrow agent shall release such amount to Bradley, or (ii) a letter
from Bradley's counsel indicating that Bradley received a ruling from the IRS
holding that the receipt by Bradley of the Section 9.2 Amount would either
constitute Qualifying Income or would be excluded from gross income within the
meaning of Sections 856(c)(2) and (3) of the Code (or alternatively, Bradley's
legal counsel has rendered a legal opinion to the effect that the receipt by
Bradley of the Section 9.2 Amount would either constitute Qualifying Income or
would be excluded from gross income within the meaning of Sections 856(c)(2)
and (3) of the Code), in which case the escrow agent shall release the
remainder of the Section 9.2 Amount to Bradley. Tucker agrees to amend this
Section 9.3 at the request of Bradley in order to (x) maximize the portion of
the Section 9.2 Amount that may be distributed to Bradley hereunder without
causing Bradley to fail to meet the requirements of Sections 856(c)(2) and (3)
of the Code, (y) improve Bradley's chances of securing a favorable ruling
described in this Section 9.3(b) or (z) assist Bradley in obtaining a
favorable legal opinion from its counsel as described in this Section 9.3(b);
provided that Bradley's legal counsel has rendered a legal opinion to Bradley
to the effect that such amendment would not cause Bradley to fail to meet the
requirements of Section 856(c)(2) or (3) of the Code. The escrow agreement
shall also provide that any portion of the Section 9.2 Amount held in escrow
for five years shall be released by the escrow agent to Tucker. Tucker shall
not be a party to such escrow agreement and shall not bear any cost of or have
liability resulting from the escrow agreement.
(c) Notwithstanding anything to the contrary set forth in this Agreement, in
the event Bradley is required to file suit to seek all or a portion of
Termination Amount and/or the Expenses, it shall be entitled to all expenses,
including attorneys' fees and expenses, which it has incurred in enforcing its
rights hereunder; provided that
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payment of such expenses shall be subject to the limitations of Section 9.3(a)
(determined as if such expenses were included in the Section 9.2 Amount).
9.4 Extension; Waiver. At any time prior to the Effective Time, any party
hereto, by action taken by its Board of Directors, may, to the extent legally
allowed, (a) extend the time for the performance of any of the obligations or
other acts of the other parties hereto, (b) waive any inaccuracies in the
representations and warranties made to such party contained herein or in any
document delivered pursuant hereto and (c) waive compliance with any of the
agreements or conditions for the benefit of such party contained herein. Any
agreement on the part of a party hereto to any such extension or waiver shall
be valid only if set forth in an instrument in writing signed on behalf of
such party.
ARTICLE 10
10. General Provisions.
10.1 Nonsurvival of Representations, Warranties and Agreements. All
representations, warranties and agreements in this Agreement or in any
instrument delivered pursuant to this Agreement shall not survive the Merger,
provided, however, that the agreements contained in Article 4, the last
sentence of Section 7.4 and Sections 7.10, 7.12, 7.13 and 7.14 and this
Article 10 shall survive the Merger.
10.2 Notices. Any notice required to be given hereunder shall be in writing
and shall be sent by facsimile transmission (confirmed by any of the methods
that follow), courier service (with proof of service), hand delivery or
certified or registered mail (return receipt requested and first-class postage
prepaid) and addressed as follows:
If to Bradley:
E. Lawrence Miller, President
Bradley Real Estate, Inc.
250 Boylston Street
Boston, MA 02116
Fax No. (617) 266-9453
With copies to:
William B. King, P.C.
Goodwin, Procter & Hoar
Exchange Place
Boston, MA 02109
Fax No. (617) 523-1231
If to Tucker:Kenneth L. Tucker, President
Tucker Properties Corporation
40 Skokie Boulevard
Northbrook, IL 60062
Fax No. (708) 272-9931
With copies to:
Edward J. Schneidman, Esq.
Mayer, Brown & Platt
190 S. LaSalle Street
Chicago, IL 60603-3441
Fax No. (312) 701-7711
or to such other address as any party shall specify by written notice so
given, and such notice shall be deemed to have been delivered as of the date
so delivered.
10.3 Assignment; Binding Effect; Benefit. Neither this Agreement nor any of
the rights, interests or obligations hereunder shall be assigned by any of the
parties hereto (whether by operation of law or otherwise) without the prior
written consent of the other parties. Subject to the preceding sentence, this
Agreement shall be
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binding upon and shall inure to the benefit of the parties hereto and their
respective successors and assigns. Notwithstanding anything contained in this
Agreement to the contrary, except for the provisions of Article 4 and Sections
7.10, 7.12, 7.13 and 7.14(b), nothing in this Agreement, expressed or implied,
is intended to confer on any person other than the parties hereto or their
respective heirs, successors, executors, administrators and assigns any
rights, remedies, obligations or liabilities under or by reason of this
Agreement.
10.4 Entire Agreement. This Agreement, the Exhibits, the Tucker Disclosure
Letter and the Bradley Disclosure Letter and any documents delivered by the
parties in connection herewith constitute the entire agreement among the
parties with respect to the subject matter hereof and supersede all prior
agreements and understandings among the parties with respect thereto. No
addition to or modification of any provision of this Agreement shall be
binding upon any party hereto unless made in writing and signed by all parties
hereto.
10.5 Confidentiality.
(a) As used herein, "Confidential Material" means, with respect to either
party hereto (the "Providing Party"), all information, whether oral, written
or otherwise, furnished to the other party hereto (the "Receiving Party") or
such Receiving Party's directors, officers, partners, Affiliates (as defined
in Rule 12b-2 under the Exchange Act), employees, agents or representatives
(collectively, "Representatives"), by the Providing Party and all reports,
analyses, compilations, studies and other material prepared by the Receiving
Party or its Representatives (in whatever form maintained, whether
documentary, computer storage or otherwise) containing, reflecting or based
upon, in whole or in part, any such information. The term "Confidential
Material" does not include information which (i) is or becomes generally
available, to the public other than as a result of a disclosure by the
Receiving Party, its Representatives or anyone to whom the Receiving Party or
any of its Representatives transmit any Confidential Material in violation of
this Agreement, (ii) is or becomes known or available to the Receiving Party
on a non-confidential basis from a source (other than the Providing Party or
one of its Representatives) who is not, to the knowledge of the Receiving
Party after reasonable inquiry, prohibited from transmitting the information
to the Receiving Party or its Representatives by a contractual, legal,
fiduciary or other obligation or (iii) is contained in the Form S-4.
(b) Subject to paragraph (c) below or except as required by law, the
Confidential Material will be kept confidential and will not, without the
prior written consent of the Providing Party, be disclosed by the Receiving
Party or its Representatives, in whole or in part, and will not be used by the
Receiving Party or its Representatives, directly or indirectly, for any
purpose other than in connection with this Agreement, the Merger or the
evaluating, negotiating or advising with respect to a transaction contemplated
herein. Moreover, each Receiving Party agrees to transmit Confidential
Material to its Representatives only if and to the extent that such
Representatives need to know the Confidential Material for purposes of such
transaction and are informed by such Receiving Party of the confidential
nature of the Confidential Material and of the terms of this Section. In any
event, each Receiving Party will be responsible for any actions by its
Representatives which are not in accordance with the provisions hereof.
(c) In the event that either Receiving Party, its Representatives or anyone
to whom such Receiving Party or its Representatives supply the Confidential
Material, are requested (by oral questions, interrogatories, requests for
information or documents, subpoena, civil investigative demand, any informal
or formal investigation by any government or governmental agency or authority
or otherwise in connection with legal process) to disclose any Confidential
Material, such Receiving Party agrees (i) to immediately notify the Providing
Party of the existence, terms and circumstances surrounding such a request,
(ii) to consult with the Providing Party on the advisability of taking legal
available steps to resist or narrow such request and (iii) if disclosure of
such information is required, to furnish only that portion of the Confidential
Material which, in the opinion of such Receiving Party's counsel, such
Receiving Party is legally compelled to disclose and to cooperate with any
action by the Providing Party to obtain an appropriate protective order or
other reliable assurance that confidential treatment will be accorded the
Confidential Material (it being agreed that the Providing Party shall,
reimburse the Receiving Party for all reasonable out-of-pocket expenses
incurred by the Receiving Party in connection with such cooperation).
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(d) In the event of the termination of this Agreement in accordance with its
terms, promptly upon request from either Providing Party, the Receiving Party
shall, except to the extent prevented by law, redeliver to the Providing Party
or destroy all tangible Confidential Material and will not retain any copies,
extracts or other reproductions thereof in whole or in part. Any such
destruction shall be certified in writing to the Providing Party by an
authorized officer of the Receiving Party supervising the same.
Notwithstanding the foregoing, each Receiving Party and one Representative
designated by each Receiving Party shall be permitted to retain one permanent
file copy of each document constituting Confidential Material.
(e) Tucker and Bradley agree that prior to and within one year after the
termination of this Agreement they shall not solicit for employment, whether
as an employee or independent contractor, any person who is (or has been
within a period of one year) employed by the other, without the written
consent of the other.
10.6 Amendment. This Agreement may be amended by the parties hereto, by
action taken by their respective Board of Directors, at any time before or
after approval of matters presented in connection with the Merger by the
stockholders of Tucker and Bradley, but after any such stockholder approval,
no amendment shall be made which by law requires the further approval of
stockholders without obtaining such further approval. This Agreement may not
be amended except by an instrument in writing signed on behalf of each of the
parties hereto.
10.7 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Maryland without regard to its rules
of conflict of laws. Each of Tucker and Bradley hereby irrevocably and
unconditionally consents to submit to the exclusive jurisdiction of the courts
of the State of Maryland and of the United States of America located in the
State of Maryland (the "Maryland Courts") for any litigation arising out of or
relating to this Agreement and the transactions contemplated hereby (and
agrees not to commence any litigation relating thereto except in such courts),
waives any objection to the laying of venue of any such litigation in the
Maryland Courts and agrees not to plead or claim in any Maryland Court that
such litigation brought therein has been brought in any inconvenient forum.
10.8 Counterparts. This Agreement may be executed by the parties hereto in
separate counterparts, each of which so executed and delivered shall be an
original, but all such counterparts shall together constitute one and the same
instrument. Each counterpart may consist of a number of copies hereof each
signed by less than all, but together signed by all of the parties hereto.
10.9 Headings. Headings of the Articles and Sections of this Agreement are
for the convenience of the parties only, and shall be given no substantive or
interpretive effect whatsoever.
10.10 Interpretation. In this Agreement, unless the context otherwise
requires, words describing the singular number shall include the plural and
vice versa, and words denoting any gender shall include all genders and words
denoting natural persons shall include corporations and partnerships and vice
versa.
10.11 Waivers. Except as provided in this Agreement, no action taken
pursuant to this Agreement, including, without limitation, any investigation
by or on behalf of any party, shall be deemed to constitute a waiver by the
party taking such action of compliance with any representations, warranties,
covenants or agreements contained in this Agreement. The waiver by any party
hereto of a breach of any provision hereunder shall not operate or be
construed as a waiver of any prior or subsequent breach of the same or any
other provision hereunder.
10.12 Incorporation. The Tucker Disclosure Letter and the Bradley Disclosure
Letter and all Exhibits and Schedules attached hereto and thereto and referred
to herein and therein are hereby incorporated herein and made a part hereof
for all purposes as if fully set forth herein.
10.13 Severability. Any term or provision of this Agreement which is invalid
or unenforceable in any jurisdiction shall, as to that jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without
A-40
<PAGE>
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement or affecting the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdiction. If any provision of
this Agreement is so broad as to be unenforceable, the provision shall be
interpreted to be only so broad as is enforceable.
10.14 Enforcement of Agreement. The parties hereto agree that irreparable
damage would occur in the event that any of the provisions of this Agreement
was not performed in accordance with its specific terms or was otherwise
breached. It is accordingly agreed that the parties shall be entitled to an
injunction or injunctions to prevent breaches of this Agreement and to enforce
specifically the terms and provisions thereof in any Maryland Court, this
being in addition to any other remedy to which they are entitled at law or in
equity.
10.15 Certain Definitions.
(a) As used in this Agreement, the word "Subsidiary" or "Subsidiaries" when
used with respect to any party means any corporation, partnership, joint
venture, business trust or other entity, of which such party directly or
indirectly owns or controls at least a majority of the securities or other
interests having by their terms ordinary voting power to elect a majority of
the board of directors or others performing similar functions with respect to
such corporation or other organization.
(b) As used in this Agreement, the word "person" means an individual, a
corporation, a partnership, an association, a joint-stock company, a trust, a
limited liability company, any unincorporated organization or any other
entity.
(c) As used in this Agreement, the word "affiliate" shall have the meaning
set forth in Rule 12b-2 of the Exchange Act.
10.16 Schedules. Any fact or item disclosed in one section of any Disclosure
Letter or schedule hereto ("Schedule") shall be deemed to be disclosed with
respect to any other relevant section of such Disclosure Letter or Schedule,
whether or not an explicit cross-reference appears.
IN WITNESS WHEREOF, the parties have executed this Agreement and caused the
same to be duly delivered on their behalf on the day and year first written
above.
ATTEST: BRADLEY REAL ESTATE, INC.
/s/ WILLIAM B. KING /s/ E. LAWRENCE MILLER
By: _________________________________ By: _________________________________
Name: William B. King Name: E. Lawrence Miller
Title: Secretary Title: President and CEO
ATTEST: TUCKER PROPERTIES CORPORATION
/s/ RICHARD H. TUCKER /s/ KENNETH L. TUCKER
By: _________________________________ By: _________________________________
Name: Richard H. Tucker Name: Kenneth L. Tucker
Title: Secretary Title: Chairman of the Board
and
President
A-41
<PAGE>
ANNEX C
October 30, 1995
Board of Directors of Bradley Real Estate, Inc.
250 Boylston Street
Boston, Massachusetts 02116
Dear Sirs:
Bradley Real Estate, Inc. ("Bradley") and Tucker Properties Corporation
("Tucker") have entered into an Agreement and Plan of Merger dated as of
October 30, 1995 (the "Agreement") pursuant to which Tucker will be merged
with and into Bradley in a transaction (the "Merger") in which each share of
Tucker's common stock, par value $.001 per share, will be converted into the
right to receive .665 shares (the "Exchange Ratio") of common stock of
Bradley, par value $.01 per share, subject to certain adjustments as set forth
in the Agreement. You have requested our opinion as to whether the Exchange
Ratio is fair, from a financial point of view, to the stockholders of Bradley.
Alex. Brown & Sons Incorporated, as a customary part of its investment
banking business, is engaged in the valuation of businesses and their
securities in connection with mergers and acquisitions, negotiated
underwritings, private placements and valuations for estate, corporate and
other purposes. We have acted as financial advisor to the Board of Directors
of Bradley in connection with the transaction described above and will receive
a fee for our services. We have also acted as co-manager of a public offering
of the common stock of Bradley. Alex. Brown & Sons Incorporated regularly
publishes research reports regarding the real estate investment trust industry
and the businesses and securities of publicly owned companies in that
industry. In the ordinary course of business, we may actively trade the
securities of both Bradley and Tucker for our own account and the account of
our customers and, accordingly, may at any time hold a long or short position
in securities of Bradley and Tucker.
In connection with our opinion, we have reviewed certain publicly available
financial information concerning Tucker and certain internal financial
analyses and other information furnished to us by Bradley and Tucker. We have
also held discussions with members of the senior managements of Bradley and
Tucker regarding the business and prospects of Tucker. In addition, we have
(i) reviewed the reported price and trading activity for the common stock of
Bradley and Tucker, (ii) compared certain financial and stock market
information for Tucker with similar information for certain other companies
whose securities are publicly traded, (iii) reviewed the financial terms of
certain recent business combinations and (iv) performed such other studies and
analyses and considered such other factors as we deemed appropriate.
We have not independently verified the information described above and for
purposes of this opinion have assumed the accuracy, completeness and fairness
thereof. With respect to information relating to the prospects of Tucker, we
have assumed that such information reflects the best currently available
estimates and judgments of the managements of Bradley and Tucker as to the
likely future financial performance of Tucker. In addition, we have not made
an independent evaluation or appraisal of the assets of Tucker, nor have we
been furnished with any such evaluation or appraisal. Our opinion is based on
market, economic and other conditions as they exist and can be evaluated as of
the date of this letter.
Our advisory services and the opinion expressed herein are for the
information of the Board of Directors of Bradley and do not constitute a
recommendation to Bradley's stockholders as to how they should vote at the
stockholders' meeting in connection with the Merger. We hereby consent,
however, to the inclusion of this opinion as an exhibit to any proxy or
registration statement distributed in connection with the Merger.
C-1
<PAGE>
Based upon and subject to the foregoing, it is our opinion that, as of the
date of this letter, the Exchange Ratio is fair, from a financial point of
view, to the stockholders of Bradley.
Very truly yours,
ALEX. BROWN & SONS INCORPORATED
C-2
<PAGE>
PART II. INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Maryland General Corporation Law ("MGCL") permits a Maryland corporation
to include in its charter a provision limiting the liability of its directors
and officers to the corporation and its stockholders for money damages except
for liability resulting from (i) actual receipt of an improper benefit or
profit in money, property or services or (ii) active and deliberate dishonesty
established by a final judgment as being material to the cause of action. The
Articles of Amendment and Restatement (the "Bradley Charter") of Bradley Real
Estate, Inc. ("Bradley") contains such a provision which eliminates such
liability to the maximum extent permitted by Maryland law.
The Bradley Charter authorizes Bradley, to the maximum extent permitted by
Maryland law, to obligate itself to indemnify and to pay or reimburse
reasonable expenses in advance of final disposition of a proceeding to (i) any
present or former director, officer, agent, employee or plan administrator of
Bradley or of its predecessor Bradley Real Estate Trust (the "Trust") or (ii)
any individual who, at the request of Bradley, serves or has served in any of
these capacities with another corporation, partnership, joint venture, trust,
employee benefit plan or any other enterprise. The Bylaws of Bradley obligate
Bradley, to the maximum extent permitted by Maryland law, to indemnify (i) any
present or former director or officer of Bradley; (ii) any individual who, at
the request of Bradley, serves or has served another corporation, partnership,
joint venture, trust or other enterprise as a director or officer; or (iii)
any present or former trustee or officer of the Trust.
The MGCL requires a corporation (unless its charter provides otherwise,
which the Bradley Charter does not) to indemnify a director or officer who has
been successful, on the merits or otherwise, in the defense of any proceeding
to which he is made a party by reason of his service in that capacity. The
MGCL permits a corporation to indemnify its present and former directors and
officers, among others, against judgments, penalties, fines, settlements and
reasonable expenses actually incurred by them in connection with any
proceeding to which they may be made a party by reason of their service in
those or other capacities unless it is established that (a) the act or
omission of the director or officer was material to the matter giving rise to
the proceeding and (i) was committed in bad faith or (ii) was the result of
active and deliberate dishonesty; (b) the director or officer actually
received an improper personal benefit in money, property or services; or (c)
in the case of any criminal proceeding, the director or officer had reasonable
cause to believe that the act or omission was unlawful. However, a Maryland
corporation may not indemnify for an adverse judgment in a suit by or in the
right of the corporation. In addition, the MGCL requires a Maryland
corporation, as a condition to advancing expenses, to obtain (i) a written
affirmation by the director or officer of good faith belief that he has met
the standard of conduct necessary for indemnification by the corporation as
authorized by the corporation's bylaws and (ii) a written statement by or on
his behalf to repay the amount paid or reimbursed by the corporation if it
shall ultimately be determined that the standard of conduct was not met.
Bradley has a claims-made directors and officers liability insurance policy
that insures the directors and officers of Bradley against loss from claimed
wrongful acts and insures Bradley for indemnifying the directors and officers
against such loss. The policy limit of liability is $3,000,000 each policy
year and is subject to a retention of $150,000 of loss by Bradley.
II-1
<PAGE>
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
(a) Exhibits
<TABLE>
<CAPTION>
NUMBER DESCRIPTION
------ -----------
<C> <S>
2.1 Agreement and Plan of Merger, dated as of October 30, 1995, between
Tucker Properties Corporation and Bradley Real Estate, Inc. (the
"Merger Agreement"), attached as Annex A to the Joint Proxy
Statement/Prospectus included in Part I of this Registration Statement
and incorporated herein by reference. The following Exhibits to the
Merger Agreement are included as separate Exhibits to this Registration
Statement: Form of Amended and Restated Agreement of Limited
Partnership of Bradley Operating Limited Partnership (see Exhibit
10.1); Form of Affiliate Letter (see Exhibit 10.3); Purchase and Sale
of Securities Agreement (see Exhibit 10.4); Tucker Properties
Corporation Severance Pay Plan (see Exhibit 10.5); Form of First
Amendment to Indemnification Agreement (see Exhibit 10.6); Severance
Agreement with Kenneth Tucker (see Exhibit 10.7); Severance Agreement
with Richard Tucker (see Exhibit 10.8); Severance Agreement with Harold
Eisenberg (see Exhibit 10.9); Severance Agreement with Norris Eber (see
Exhibit 10.10); Severance Agreement with Lawrence Tucker (see Exhibit
10.11); Severance Agreement with William Karnes (see Exhibit 10.12);
and Consulting Agreement with Kenneth Tucker (see Exhibit 10.13). The
other Exhibits to the Merger Agreement are not included as Exhibits to
this Registration Statement either because they do not contain
information that is material to an investment decision or because they
contain only information that is disclosed in the Merger Agreement or
this Registration Statement. A list briefly identifying the contents of
all omitted Exhibits is incorporated by reference to page iv of the
Merger Agreement. Bradley agrees to furnish supplementally to the
Commission, upon request, a copy of any omitted Exhibit. Pursuant to
Item 601(b)(2) of Regulation S-K, the Schedules to the Merger Agreement
are omitted. Bradley hereby undertakes to furnish supplementally a copy
of any omitted Schedule to the Commission upon request.
3.1 Articles of Amendment and Restatement of Bradley Real Estate, Inc.,
incorporated by reference to Exhibit 3.1 of Bradley's Current Report on
Form 8-K dated October 17, 1994.
3.2 By-laws of Bradley Real Estate, Inc., incorporated by reference to
Exhibit 3.3 of Bradley's Current Report on Form 8-K dated October 17,
1994.
3.3 Articles of Amendment and Restatement of Tucker Properties Corporation,
incorporated by reference to Exhibit 3.01(b) of Tucker's Registration
Statement on Form S-11 (No. 33-64942) dated October 4, 1993.
3.4 By-laws of Tucker Properties Corporation, incorporated by reference to
Exhibit 3.02 of Tucker's Registration Statement on Form S-11 dated
October 4, 1993.
4.1 Specimen Certificate for shares of Common Stock, $.01 par value per
share, of Bradley Real Estate, Inc., incorporated by reference to
Exhibit 4.1 of Bradley's Registration Statement on Form S-4 (No. 33-
81888) dated July 22, 1994.
5.1 Opinion of Goodwin, Procter & Hoar as to legality of the securities
being offered.
8.1 Opinion of Goodwin, Procter & Hoar regarding tax consequences of the
Merger.**
8.2 Opinion of Mayer, Brown & Platt regarding tax consequences of the
Merger.**
8.3 Opinion of Goodwin, Procter & Hoar regarding Bradley Real Estate,
Inc.'s REIT status following the Merger.**
10.1 Form of Amended and Restated Agreement of Limited Partnership of
Bradley Operating Limited Partnership, incorporated by reference to
Exhibit 10.1 of Bradley's Current Report on Form 8-K dated November 3,
1995.
10.2 Form of Registration Rights Agreement between Bradley Real Estate, Inc.
and each of the limited partners to the Amended and Restated Agreement
of Limited Partnership of Bradley Operating Limited Partnership.
10.3 Form of Affiliate Letter.*
</TABLE>
II-2
<PAGE>
<TABLE>
<CAPTION>
NUMBER DESCRIPTION
------ -----------
<C> <S>
10.4 Purchase and Sale of Securities Agreement among Kenneth Tucker, Richard
Tucker, Marianne Dunn and Thomas P. D'Arcy.*
10.5 Tucker Properties Corporation Severance Pay Plan, dated October 29,
1995, incorporated by reference to Exhibit 10.2 of Bradley's Current
Report on Form 8-K dated November 3, 1995.
10.6 Form of First Amendment to Indemnification Agreement.*
10.7 Severance Agreement between Tucker Properties Corporation and Kenneth
Tucker, incorporated by reference to Exhibit 10.3 of Bradley's Current
Report on Form 8-K dated November 3, 1995.
10.8 Severance Agreement between Tucker Properties Corporation and Richard
Tucker, incorporated by reference to Exhibit 10.4 of Bradley's Current
Report on Form 8-K dated November 3, 1995.
10.9 Severance Agreement between Tucker Properties Corporation and Harold
Eisenberg, incorporated by reference to Exhibit 10.5 of Bradley's
Current Report on Form 8-K dated November 3, 1995.
10.10 Severance Agreement between Tucker Properties Corporation and Norris
Eber, incorporated by reference to Exhibit 10.6 of Bradley's Current
Report on Form 8-K dated November 3, 1995.
10.11 Severance Agreement between Tucker Properties Corporation and Lawrence
Tucker, incorporated by reference to Exhibit 10.7 of Bradley's Current
Report on Form 8-K dated November 3, 1995.
10.12 Severance Agreement between Tucker Properties Corporation and William
Karnes, incorporated by reference to Exhibit 10.8 of Bradley's Current
Report on Form 8-K dated November 3, 1995.
10.13 Form of Consulting Agreement between Bradley Real Estate, Inc. and
Kenneth Tucker, incorporated by reference to Exhibit 10.9 of Bradley's
Current Report on Form 8-K dated November 3, 1995.
21.1 Subsidiaries of Bradley Real Estate, Inc.*
23.1 Consent of KPMG Peat Marwick LLP.
23.2 Consent of Coopers & Lybrand L.L.P.
23.3 Consents of Goodwin, Procter & Hoar (included in Exhibits 5.1 and 8.1).
23.4 Consent of Mayer, Brown & Platt (included in Exhibit 8.2).
23.5 Consent of PaineWebber Incorporated.**
23.6 Consent of Alex. Brown & Sons Incorporated.**
24.1 Powers of Attorney (included in Part II of this Registration
Statement).*
99.1 Form of Bradley Real Estate, Inc. Proxy.*
99.2 Form of Tucker Properties Corporation Proxy.*
</TABLE>
- --------
*Previously filed.
**To be filed by amendment.
II-3
<PAGE>
(b) Financial Statement Schedules
None.
(c) Item 4(b) Information
The opinions of PaineWebber Incorporated will be included, and the opinion
of Alex. Brown & Sons Incorporated is included, as Annex B and C,
respectively, to the Prospectus/Proxy Statement included in this Registration
Statement.
ITEM 22. UNDERTAKINGS.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent post-
effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
registration statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high and of the estimated maximum offering range
may be reflected in the form of prospectus filed with the Commission
pursuant to Rule 424(b) if, in the aggregate, the changes in volume and
price represent no more than a 20 percent change in the maximum aggregate
offering price set forth in the "Calculation of Registration Fee" table in
the effective registration statement;
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement;
(2) That, for the purpose of determining any liability under the Securities
Act of 1933, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of
the offering.
(b) The registrant hereby undertakes that, for purposes of determining any
liability under the Securities Act of 1933, each filing of the registrant's
annual report pursuant to Section 13(a) or 15(d) of the Securities Exchange
Act of 1934 that is incorporated by reference in the registration statement
shall be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(c) The registrant hereby undertakes as follows: that prior to any public
reoffering of the securities registered hereunder through use of a prospectus
which is a part of this registration statement, by any person or party who is
deemed to be an underwriter within the meaning of Rule 145(c), the issuer
undertakes that such reoffering prospectus will contain the information called
for by the applicable registration form with respect to reofferings by persons
who may be deemed underwriters, in addition to the information called for by
the other items of the applicable form.
(d) The registrant undertakes that every prospectus: (i) that is filed
pursuant to paragraph (c) immediately preceding, or (ii) that purports to meet
the requirements of Section 10(a)(3) of the Act and is used in connection with
an offering of securities subject to Rule 415, will be filed as a part of an
amendment to the registration
II-4
<PAGE>
statement and will not be used until such amendment is effective, and that,
for purposes of determining any liability under the Securities Act of 1933,
each such post-effective amendment shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
(e) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Securities Act of 1933 and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the registrant of expenses incurred or paid by a director, officer, or
controlling person of the registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the registrant
will, unless in the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public policy as
expressed in the Securities Act of 1933 and will be governed by the final
adjudication of such issue.
(f) The registrant hereby undertakes to respond to requests for information
that is incorporated by reference into the prospectus pursuant to Item 4,
10(b), 11, or 13 of this form, within one business day of receipt of such
request, and to send the incorporated documents by first class mail or other
equally prompt means. This includes information contained in documents filed
subsequent to the effective date of the registration statement through the
date of responding to the request.
(g) The registrant hereby undertakes to supply by means of post-effective
amendment all information concerning a transaction, and the company being
acquired involved therein, that was not the subject of and included in the
registration statement when it became effective.
II-5
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT
CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS ALL OF THE
REQUIREMENTS FOR FILING ON FORM S-4 AND HAS DULY CAUSED THIS AMENDMENT NO. 2
TO THE REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED,
THEREUNTO DULY AUTHORIZED, IN THE CITY OF BOSTON, COMMONWEALTH OF
MASSACHUSETTS ON THE 26TH DAY OF JANUARY, 1996.
BRADLEY REAL ESTATE, INC.
By: /s/ E. Lawrence Miller
_____________________________________
E. Lawrence Miller
President
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS AMENDMENT
NO. 2 TO THE REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS
IN THE CAPACITIES AND ON THE DATES INDICATED.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ E. Lawrence Miller President, Chief Executive January 26, 1996
____________________________________ Officer
E. Lawrence Miller
* Chief Financial Officer January 26, 1996
____________________________________
Irving E. Lingo, Jr.
* Director January 26, 1996
____________________________________
William L. Brown
* Director January 26, 1996
____________________________________
Joseph E. Hakim
* Director January 26, 1996
____________________________________
John B. Hynes III
* Director January 26, 1996
____________________________________
Stephen G. Kasnet
* Director January 26, 1996
____________________________________
Paul G. Kirk, Jr.
* Director January 26, 1996
____________________________________
W. Nicholas Thorndike
* Director January 26, 1996
____________________________________
A. Robert Towbin
</TABLE>
/s/ E. Lawrence Miller
*By: ________________________________
E. Lawrence Miller,
Attorney-in-Fact
II-6
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER DESCRIPTION PAGE
------- ----------- ------------
<C> <S> <C>
2.1 Agreement and Plan of Merger, dated as of October 30,
1995, between Tucker Properties Corporation and Bradley
Real Estate, Inc. (the "Merger Agreement"), attached as
Annex A to the Joint Proxy Statement/Prospectus
included in Part I of this Registration Statement and
incorporated herein by reference. The following
Exhibits to the Merger Agreement are included as
separate Exhibits to this Registration Statement: Form
of Amended and Restated Agreement of Limited
Partnership of Bradley Operating Limited Partnership
(see Exhibit 10.1); Form of Affiliate Letter (see
Exhibit 10.3); Purchase and Sale of Securities
Agreement (see Exhibit 10.4); Tucker Properties
Corporation Severance Pay Plan (see Exhibit 10.5); Form
of First Amendment to Indemnification Agreement (see
Exhibit 10.6); Severance Agreement with Kenneth Tucker
(see Exhibit 10.7); Severance Agreement with Richard
Tucker (see Exhibit 10.8); Severance Agreement with
Harold Eisenberg (see Exhibit 10.9); Severance
Agreement with Norris Eber (see Exhibit 10.10);
Severance Agreement with Lawrence Tucker (see Exhibit
10.11); Severance Agreement with William Karnes (see
Exhibit 10.12); and Consulting Agreement with Kenneth
Tucker (see Exhibit 10.13). The other Exhibits to the
Merger Agreement are not included as Exhibits to this
Registration Statement either because they do not
contain information that is material to an investment
decision or because they contain only information that
is disclosed in the Merger Agreement or this
Registration Statement. A list briefly identifying the
contents of all omitted Exhibits is incorporated by
reference to page iv of the Merger Agreement. Bradley
agrees to furnish supplementally to the Commission,
upon request, a copy of any omitted Exhibit. Pursuant
to Item 601(b)(2) of Regulation S-K, the Schedules to
the Merger Agreement are omitted. Bradley hereby
undertakes to furnish supplementally a copy of any
omitted Schedule to the Commission upon request.
3.1 Articles of Amendment and Restatement of Bradley Real
Estate, Inc., incorporated by reference to Exhibit 3.1
of Bradley's Current Report on Form 8-K dated October
17, 1994.
3.2 By-laws of Bradley Real Estate, Inc., incorporated by
reference to Exhibit 3.3 of Bradley's Current Report on
Form 8-K dated October 17, 1994.
3.3 Articles of Amendment and Restatement of Tucker
Properties Corporation, incorporated by reference to
Exhibit 3.01(b) of Tucker's Registration Statement on
Form S-11 (No. 33-64942) dated October 4, 1993.
3.4 By-laws of Tucker Properties Corporation, incorporated
by reference to Exhibit 3.02 of Tucker's Registration
Statement on Form S-11 dated October 4, 1993.
4.1 Specimen Certificate for shares of Common Stock, $.01
par value per share, of Bradley Real Estate, Inc.,
incorporated by reference to Exhibit 4.1 of Bradley's
Registration Statement on Form S-4 (No. 33-81888) dated
July 22, 1994.
5.1 Opinion of Goodwin, Procter & Hoar as to legality of
the securities being offered.
8.1 Opinion of Goodwin, Procter & Hoar regarding tax
consequences of the Merger.**
8.2 Opinion of Mayer, Brown & Platt regarding tax
consequences of the Merger.**
8.3 Opinion of Goodwin, Procter & Hoar regarding Bradley's
REIT status following the Merger.**
10.1 Form of Amended and Restated Agreement of Limited
Partnership of Bradley Operating Limited Partnership,
incorporated by reference to Exhibit 10.1 of Bradley's
Current Report on Form 8-K dated November 3, 1995.
10.2 Form of Registration Rights Agreement between Bradley
Real Estate, Inc. and each of the limited partners to
the Amended and Restated Agreement of Limited
Partnership of Bradley Operating Limited Partnership.
</TABLE>
<PAGE>
EXHIBIT INDEX--(CONTINUED)
<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER DESCRIPTION PAGE
------- ----------- ------------
<C> <S> <C>
10.3 Form of Affiliate Letter.*
10.4 Purchase and Sale of Securities Agreement among Kenneth
Tucker, Richard Tucker, Marianne Dunn and Thomas P.
D'Arcy.*
10.5 Tucker Properties Corporation Severance Pay Plan, dated
October 29, 1995, incorporated by reference to Exhibit
10.2 of Bradley's Current Report on Form 8-K dated
November 3, 1995.
10.6 Form of First Amendment to Indemnification Agreement.*
10.7 Severance Agreement between Tucker Properties
Corporation and Kenneth Tucker, incorporated by
reference to Exhibit 10.3 of Bradley's Current Report
on Form 8-K dated November 3, 1995.
10.8 Severance Agreement between Tucker Properties
Corporation and Richard Tucker, incorporated by
reference to Exhibit 10.4 of Bradley's Current Report
on Form 8-K dated November 3, 1995.
10.9 Severance Agreement between Tucker Properties
Corporation and Harold Eisenberg, incorporated by
reference to Exhibit 10.5 of Bradley's Current Report
on Form 8-K dated November 3, 1995.
10.10 Severance Agreement between Tucker Properties
Corporation and Norris Eber, incorporated by reference
to Exhibit 10.6 of Bradley's Current Report on Form 8-K
dated November 3, 1995.
10.11 Severance Agreement between Tucker Properties
Corporation and Lawrence Tucker, incorporated by
reference to Exhibit 10.7 of Bradley's Current Report
on Form 8-K dated November 3, 1995.
10.12 Severance Agreement between Tucker Properties
Corporation and William Karnes, incorporated by
reference to Exhibit 10.8 of Bradley's Current Report
on Form 8-K dated November 3, 1995.
10.13 Form of Consulting Agreement between Bradley Real
Estate, Inc. and Kenneth Tucker, incorporated by
reference to Exhibit 10.9 of Bradley's Current Report
on Form 8-K dated November 3, 1995.
21.1 Subsidiaries of Bradley Real Estate, Inc.*
23.1 Consent of KPMG Peat Marwick LLP.
23.2 Consent of Coopers & Lybrand L.L.P.
23.3 Consents of Goodwin, Procter & Hoar (included in
Exhibits 5.1 and 8.1).
23.4 Consent of Mayer, Brown & Platt (included in Exhibit
8.2).
23.5 Consent of PaineWebber Incorporated.**
23.6 Consent of Alex. Brown & Sons Incorporated.**
24.1 Powers of Attorney (included in Part II of this
Registration Statement).*
99.1 Form of Bradley Real Estate, Inc. Proxy.*
99.2 Form of Tucker Properties Corporation Proxy.*
</TABLE>
- --------
*Previously filed.
**To be filed by amendment.
<PAGE>
EXHIBIT 5.1
[LETTERHEAD OF GOODWIN, PROCTER & HOAR APPEARS HERE]
January 26, 1996
Bradley Real Estate, Inc.
699 Boylston Street
Boston, MA 02116
Re: Bradley Real Estate, Inc. Registration Statement on Form S-4
(File No. 33-64811) (as amended to date, the "Registration Statement")
----------------------------------------------------------------------
Dear Ladies and Gentlemen:
This opinion relates to shares of common stock, par value $.01 per share
(the "Shares"), of Bradley Real Estate, Inc., a Maryland corporation (the
"Company"), which are the subject matter of the above-referenced Registration
Statement filed with the Securities and Exchange Commission (the "Commission").
We have acted as counsel to the Company in connection with the preparation
and filing with the Commission of the Registration Statement and the proposed
acquisition of Tucker Properties Corporation ("Tucker") pursuant to the
Agreement and Plan of Merger by and between the Company and Tucker dated as of
October 30, 1995 (the "Merger Agreement").
For purposes of this opinion we have reviewed the Company's Articles of
Amendment and Restatement and By-Laws, each as amended to date. We have also
examined records of corporate proceedings of the Company and such other
certificates and documents as we have deemed necessary to enable us to render
this opinion.
We are attorneys admitted to practice in The Commonwealth of Massachusetts.
We express no opinion herein concerning the laws of any jurisdictions other than
the laws of the United States of America and The Commonwealth of Massachusetts
and the General Corporation Law of the State of Maryland as in effect on the
date hereof.
Based upon the foregoing, and having regard for such legal considerations
as we have deemed relevant, it is our opinion that, upon the issuance of the
certificates representing the Shares in accordance with the provisions of the
Merger Agreement, the Shares will be duly authorized, validly issued, fully paid
and non-assessable.
<PAGE>
[LETTERHEAD OF GOODWIN, PROCTER & HOAR APPEARS HERE]
Bradley Real Estate, Inc.
January __, 1996
Page 2
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to us in the prospectus contained in
such Registration Statement.
Very truly yours,
GOODWIN, PROCTER & HOAR
<PAGE>
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (this "Agreement") is entered into as of
January __, 1996 by and between Bradley Real Estate, Inc., a Maryland
corporation (the "Company"), and each of the parties executing a signature page
hereto (individually, a "Holder" and collectively, the "Holders").
WHEREAS, the Company has filed with the Securities and Exchange Commission
(the "SEC") under the Securities Act of 1933, as amended (the "Securities Act"),
a registration statement on Form S-4 (Registration Number 33-64811 (the "Form S-
4")) relating to the shares of the Company's common stock, $.01 par value per
share ("Common Stock"), issuable in connection with the merger (the "Merger") of
Tucker Properties Corporation with and into the Company; and
WHEREAS, the Holders are the beneficial owners of units ("Units") of
limited partnership interest in Tucker Operating Limited Partnership, a Delaware
limited partnership (the "Operating Partnership"); and
WHEREAS, in connection with the Merger, the Agreement of Limited
Partnership of the Operating Partnership will be amended and restated in its
entirety (as amended, the "Partnership Agreement") to provide, among other
things, that the Holders may present their Units for redemption to the Operating
Partnership, and any Units so presented may be redeemed for cash, or at the
option of the Company, for the number of shares ("Shares") of Common Stock
issuable pursuant to the Partnership Agreement; and
WHEREAS, in order to induce the Holders to enter into the Partnership
Agreement, the Company has agreed to provide for the benefit of the Holders the
registration rights set forth in this Agreement with respect to such Holders'
Shares, subject to the terms and conditions provided herein.
NOW, THEREFORE, in consideration of the foregoing, the mutual premises and
agreements set forth herein, and other valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows:
1. Certain Definitions.
-------------------
As used in this Agreement, the following capitalized terms not elsewhere
defined shall have the following meanings:
"Prospectus" shall mean the prospectus included in a Registration
----------
Statement, as amended or supplemented, including any preliminary prospectus,
prospectus supplement and
<PAGE>
post-effective amendment, and in each case including all material incorporated
by reference therein.
"Registrable Shares" shall mean the Shares issuable upon redemption of the
------------------
Units, excluding (i) Shares for which a Registration Statement relating to the
sale thereof shall have become effective under the Securities Act, and which
shall have been disposed of under such Registration Statement, (ii) Shares sold
pursuant to Rule 144 under the Securities Act and (iii) Shares eligible for sale
pursuant to Rule 144(k) under the Securities Act. "Registrable Shares" shall
include Units eligible to be redeemed in exchange for Shares.
"Registration Statement" shall mean any registration statement of the
----------------------
Company (including, without limitation, the Form S-4), and any other entity
required to be a registrant with respect to such registration statement pursuant
to the requirements of the Securities Act, which statement covers the
Registrable Shares on an appropriate form, and all amendments and supplements to
such registration statement, including post-effective amendments, in each case
including the Prospectus contained therein, all exhibits thereto and all
materials incorporated by reference therein.
2. Registration.
------------
(a) Subject to the conditions set forth in this Agreement, the Company
shall include the Registrable Shares on the Form S-4, and shall use commercially
reasonable efforts to cause the Form S-4 to be declared effective by the SEC as
soon as reasonably practicable after the date of this Agreement. The Company
agrees to use reasonable efforts to keep the Form S-4 or any other Registration
Statement continuously effective until such time as all of the Units have been
redeemed for cash, or at the option of the Company, for the number of Shares
issuable pursuant to the Partnership Agreement.
(b) The Company shall notify each Holder of the effectiveness of any
Registration Statement and shall furnish to each Holder such number of copies of
the Registration Statement (including any amendments, supplements and exhibits),
the Prospectus contained therein (including each preliminary prospectus and all
related amendments and supplements) and any documents incorporated by reference
in the Registration Statement or such other documents as each Holder may
reasonably request in order to facilitate the registration of the Registrable
Shares in the manner described in the Registration Statement.
(c) The Company shall prepare and file with the SEC from time to time such
amendments and supplements to any Registration Statement and Prospectus used in
connection therewith as may be necessary or desirable to keep such Registration
Statement effective and to comply with the provisions of the Securities Act with
respect to the Registrable Shares until such time as all of the Units have been
redeemed for cash, or at the option of the Company, for the number of Shares
issuable pursuant to the Partnership Agreement. Upon five (5) business days'
notice, the Company shall file any supplement or post-effective amendment to
2
<PAGE>
any Registration Statement with respect to the plan of distribution or such
Holder's ownership interests in Registrable Shares that is reasonably necessary
to permit the sale of the Holder's Registrable Shares pursuant to such
Registration Statement. The Company shall file any necessary listing
applications or amendments to the existing applications to cause the Shares
registered under any Registration Statement to be then listed or quoted on the
primary exchange or quotation system on which the shares of Common Stock are
then listed or quoted.
(d) The Company shall promptly notify each Holder of, and confirm in
writing, any request by the SEC for amendments or supplements to any
Registration Statement or the Prospectus related thereto or for additional
information. In addition, the Company shall promptly notify each Holder of, and
confirm in writing, the filing of any Registration Statement or any Prospectus,
amendment or supplement related thereto or any post-effective amendment to such
Registration Statement and the effectiveness of any post-effective amendment.
(e) At any time when a Prospectus relating to any Registration Statement is
required to be delivered under the Securities Act, the Company shall immediately
notify each Holder of the happening of any event as a result of which the
Prospectus included in the Registration Statement, as then in effect, includes
an untrue statement of a material fact or omits to state any material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading. In such
event, the Company shall promptly prepare and furnish to each Holder a
reasonable number of copies of a supplement to or an amendment of such
Prospectus as may be necessary so that, as thereafter delivered to the
purchasers of Registrable Shares, such Prospectus shall not include an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they are made, not misleading. The Company will, if
necessary, amend the Registration Statement of which such Prospectus is a part
to reflect such amendment or supplement.
3. State Securities Laws. Subject to the conditions set forth in this
---------------------
Agreement, the Company shall, in connection with the filing of any Registration
Statement hereunder, file such documents as may be necessary to register or
qualify the Registrable Shares under the securities or "Blue Sky" laws of such
states as any Holder may reasonably request, and the Company shall use
commercially reasonable efforts to cause such filings to become effective;
provided, however, that the Company shall not be obligated to qualify as a
- -------- -------
foreign corporation to do business under the laws of any such state in which it
is not then qualified or to file any general consent to service of process in
any such state. Once effective, the Company shall use commercially reasonable
efforts to keep such filings effective until the earlier of (a) such time as all
of the Units have been redeemed for cash, or at the option of the Company, for
the number of Shares issuable pursuant to the Partnership Agreement, (b) in the
case of a particular state, a Holder has notified the Company that it no longer
requires an effective filing in such state in accordance with its original
request for filing, or (c) the date on which the
3
<PAGE>
Registration Statement ceases to be effective with the SEC. The Company shall
promptly notify each Holder of, and confirm in writing, the receipt by the
Company of any notification with respect to the suspension of the qualification
of the Registrable Shares for sale under the securities or "Blue Sky" laws of
any jurisdiction or the initiation or threat of any proceeding for such purpose.
4. Expenses. Except as provided herein, the Company shall bear all
--------
expenses incurred in connection with the registration of Registrable Shares
pursuant to this Agreement. The Holders shall be responsible for any brokerage
or underwriting commissions and taxes of any kind (including, without
limitation, transfer taxes) with respect to any disposition, sale or transfer of
Registrable Shares and for any legal, accounting and other expenses incurred by
them.
5. Indemnification by the Company. The Company agrees to indemnify each
------------------------------
of the Holders and their respective officers, directors, employees, agents,
representatives and affiliates, and each person or entity, if any, that controls
a Holder within the meaning of the Securities Act, and each other person or
entity, if any, subject to liability because of his, her or its connection with
a Holder, and any underwriter and any person who controls such underwriter
within the meaning of the Securities Act (each an "Indemnitee") against any and
all losses, claims, damages, actions, liabilities, costs and expenses (including
without limitation reasonable fees, expenses and disbursements of attorneys and
other professionals documented in writing), joint or several, arising out of or
based upon any violation by the Company of any rule or regulation promulgated
under the Securities Act applicable to the Company and relating to any action or
inaction required of the Company in connection with any Registration Statement
or Prospectus, or upon any untrue or alleged untrue statement of material fact
contained in any Registration Statement or any Prospectus, or any omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading, provided, that the Company shall not be
--------
liable to such Indemnitee or any person who participates as an underwriter in
the offering or sale of Registrable Shares or any other person, if any, who
controls such underwriter within the meaning of the Securities Act, in any such
case to the extent that any such loss, claim, damage, liability (or action or
proceeding in respect thereof) or expense arises out of or is based upon (a) an
untrue statement or alleged untrue statement or omission or alleged omission
made in such Registration Statement, any such preliminary prospectus, final
prospectus, summary prospectus, amendment or supplement in reliance upon and in
conformity with information regarding such Indemnitee or its plan of
distribution or ownership interests which was furnished to the Company for use
in connection with the Registration Statement or the Prospectus contained
therein by such Indemnitee, or (b) such Indemnitee's failure to send or give a
copy of the final prospectus furnished to it by the Company through no fault of
the Company at or prior to the time such action is required by the Securities
Act to the person claiming an untrue statement or alleged untrue statement or
omission or alleged omission if such statement or omission was corrected in such
final prospectus.
4
<PAGE>
6. Covenants of Holders. Each of the Holders hereby agrees (a) to
--------------------
cooperate with the Company and to furnish to the Company all such information
concerning its plan of distribution and ownership interests with respect to its
Registrable Shares in connection with the preparation of any Registration
Statement and any filings with any state securities commissions as the Company
may reasonably request, (b) to the extent required by the Securities Act, to
deliver or cause delivery of the Prospectus contained in any Registration
Statement to any purchaser of the shares covered by such Registration Statement
from the Holder, (c) to indemnify the Company, its officers, directors,
employees, agents, representatives and affiliates, and each person or entity, if
any, who controls the Company within the meaning of the Securities Act, and each
other person or entity, if any, subject to liability because of his, her or its
connection with the Company, against any and all losses, claims, damages,
actions, liabilities, costs and expenses arising out of or based upon (i) any
untrue statement or alleged untrue statement of material fact contained in
either a Registration Statement or the Prospectus contained therein, or any
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, if and to the extent
that such statement or omission occurs from reliance upon and in conformity with
information regarding the Holder, its plan of distribution or its ownership
interests, which was furnished in writing to the Company by the Holder for use
therein unless such statement or omission was corrected in writing to the
Company not less than two (2) business days prior to the date of the final
prospectus (as supplemented or amended, as the case may be), or (ii) the failure
by the Holder to deliver or cause to be delivered the Prospectus contained in
any Registration Statement (as amended or supplemented, if applicable) furnished
by the Company to the Holder to any purchaser of the shares covered by such
Registration Statement from the Holder through no fault of the Company, and (d)
to not exercise the Redemption Right (as defined in the Partnership Agreement)
unless a Registration Statement with respect to the Registrable Shares has been
declared effective by the SEC and remains effective.
7. Suspension of Registration Requirement.
--------------------------------------
(a) The Company shall promptly notify each Holder of, and confirm in
writing, the issuance by the SEC of any stop order suspending the effectiveness
of a Registration Statement or the initiation of any proceedings for that
purpose. The Company shall use commercially reasonable efforts to obtain the
withdrawal of any order suspending the effectiveness of such Registration
Statement at the earliest possible moment.
(b) Notwithstanding anything to the contrary set forth in this Agreement,
the Company's obligation under this Agreement to use commercially reasonable
efforts to cause a Registration Statement and any filings with any state
securities commission to become effective and remain effective or to amend or
supplement a Registration Statement shall be suspended in the event and during
such period as the Company is proceeding with (i) an underwritten primary
offering by the Company if the Company is advised by the underwriters that the
sale of Registrable Shares under a Registration Statement would have a material
adverse effect on
5
<PAGE>
the primary offering, or (ii) pending negotiations relating to, or consummation
of, a transaction or the occurrence of an event that would require additional
disclosure of material information by the Company in a Registration Statement or
such filing, as to which the Company has a bona fide business purpose for
---- ----
preserving confidentiality or which renders the Company unable to comply with
SEC requirements as determined by its Board of Directors (such circumstances
being hereinafter referred to as a "Suspension Event") that would make it
impractical or unadvisable to cause a Registration Statement or such filings to
become effective, to amend or supplement such Registration Statement or to
disclose such Suspension Event, but such suspension shall continue only for so
long as such event or its effect is continuing but in no event will that
suspension exceed ninety (90) days. The Company shall notify each Holder of the
existence and, in the case of circumstances referred to in clause (i) of this
Section 7(b), the nature of any Suspension Event.
(c) Each Holder of Units whose Registrable Shares are covered by a
Registration Statement filed pursuant to Section 2 hereof agrees, if requested
by the Company in the case of a Company-initiated nonunderwritten offering or if
requested by the managing underwriter or underwriters in a Company-initiated
underwritten offering, not to effect any public sale or distribution of any of
the securities of the Company of any class included in such Registration
Statement, including a sale pursuant to Rule 144 or Rule 144A under the
Securities Act (except as part of such Company-initiated registration), during
the 15-day period prior to, and during the 60-day period beginning on, the date
of effectiveness of each Company-initiated offering made pursuant to such
Registration Statement, to the extent timely notified in writing by the Company
or the managing underwriters; provided, however, that such 60-day period shall
-------- -------
be extended by the number of days from and including the date of the giving of
any notice pursuant to Section 2(d) or (e) hereof to and including the date when
each seller of Registrable Shares covered by such Registration Statement shall
have received the copies of the supplemented or amended Prospectus contemplated
by Section 2(e) hereof.
8. Black-Out Period. Following the effectiveness of a Registration
----------------
Statement and the filings with any state securities commissions, the Holders
agree that they will not effect the redemption of their Units pursuant to the
Partnership Agreement at any time after they have received notice from the
Company to suspend such redemption as a result of the occurrence or existence of
any Suspension Event. The Holders may recommence effecting redemptions of their
Units pursuant to the Partnership Agreement following further notice to such
effect from the Company, which notice shall be given by the Company not later
than five (5) business days after the conclusion of any such Suspension Event.
9. Additional Shares. The Company, at its option, may register, under any
-----------------
Registration Statement and any filings with any state securities commissions
filed pursuant to this Agreement, any number of unissued shares of Common Stock
of the Company or any Common Stock of the Company owned by any other
shareholders of the Company.
6
<PAGE>
10. Contribution. If the indemnification provided for in Sections 5
------------
and 6 is unavailable to an indemnified party with respect to any losses, claims,
damages, actions, liabilities, costs or expenses referred to therein or is
insufficient to hold the indemnified party harmless as contemplated therein,
then the indemnifying party, in lieu of indemnifying such indemnified party,
shall contribute to the amount paid or payable by such indemnified party as a
result of such losses, claims, damages, actions, liabilities, costs or expenses
in such proportion as is appropriate to reflect the relative fault of the
Company, on the one hand, and the Indemnitee, on the other hand, in connection
with the statements or omissions which resulted in such losses, claims, damages,
actions, liabilities, costs or expenses as well as any other relevant equitable
considerations. The relative fault of the Company, on the one hand, and of the
Indemnitee, on the other hand, shall be determined by reference to, among other
factors, whether the untrue or alleged untrue statement of a material fact or
omission to state a material fact relates to information supplied by the Company
or by the Indemnitee and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission;
provided, however, that in no event shall the obligation of any indemnifying
- -------- -------
party to contribute under this Section 10 exceed the amount that such
indemnifying party would have been obligated to pay by way of indemnification if
the indemnification provided for under Sections 5 or 6 hereof had been available
under the circumstances.
The Company and the Holders agree that it would not be just and equitable
if contribution pursuant to this Section 10 were determined by pro rata
--- ----
allocation or by any other method of allocation that does not take account of
the equitable considerations referred to in the immediately preceding paragraph.
Notwithstanding the provisions of this Section 10, no Holder shall be
required to contribute any amount in excess of the amount by which the gross
proceeds from the sale of Shares exceeds the amount of any damages that such
Holder has otherwise been required to pay by reason of such untrue or alleged
untrue statement or omission. No indemnified party guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any indemnifying party who was not guilty
of such fraudulent misrepresentation.
11. No Other Obligation to Register. Except as otherwise expressly
-------------------------------
provided in this Agreement, the Company shall have no obligation to the Holders
to register the Registrable Shares under the Securities Act.
12. Rule 144 Covenants. With a view to making available the
------------------
benefits of certain rules and regulations of the SEC, including without
limitation Rule 144, that may permit the sale of restricted securities to the
public without registration, the Company agrees to use its best efforts to:
7
<PAGE>
(a) Make available and keep public, at all times, current public
information regarding the Company as those terms are understood and defined in
Rule 144 under the Securities Act.
(b) File with the SEC in a timely manner all reports and other documents
required of the Company under the Securities Act and the Securities Exchange Act
of 1934, as amended (the "Exchange Act").
(c) So long as a Holder owns any Registrable Shares, furnish to the Holder
forthwith upon written request a written statement by the Company as to its
compliance with the reporting requirements of Rule 144, and of the Securities
Act and the Exchange Act, a copy of the most recent annual or quarterly report
of the Company, and such other reports and documents so filed as a Holder may
reasonably request in availing itself of any rule or regulation of the SEC
allowing a Holder to sell any such securities without registration.
13. Amendments and Waivers. The provisions of this Agreement may
----------------------
not be amended, modified, or supplemented or waived without the prior written
consent of the Company and the Holders holding in excess of fifty percent (50%)
of the aggregate number of all then outstanding Units.
14. Notices. Except as set forth below, all notices and other
-------
communications provided for or permitted hereunder shall be in writing and shall
be deemed to have been duly given if delivered personally or sent by telex or
telecopier, registered or certified mail (return receipt requested), postage
prepaid or courier or overnight delivery service to the respective parties at
the following addresses (or at such other address for any party as shall be
specified by like notice, provided that notices of a change of address shall be
effective only upon receipt thereof), and further provided that in case of
directions to amend the Registration Statement pursuant to Section 2(e) or
Section 6, a Holder must confirm such notice in writing by overnight express
delivery with confirmation of receipt:
8
<PAGE>
If to the Company: Bradley Real Estate, Inc.
250 Boylston Street
Boston, MA 02116
Attn: E. Lawrence Miller, President
Telecopy: (617) 266-9453
Telephone: (617) 421-0680
With a copy to:
William B. King, P.C.
Goodwin, Procter & Hoar
Exchange Place
Boston, MA 02109
Telecopy: (617) 523-1231
Telephone: (617) 570-1530
If to the Holders: As listed on the applicable Holder Signature Page
With a copy to:
Robert W. Newman, Esq.
Wildman, Harrold, Allen & Dixon
225 W. Wacker Drive, Suite 3000
Chicago, IL 60606
In addition to the manner of notice permitted above, notices given pursuant to
Sections 2, 7 and 8 hereof may be effected telephonically and confirmed in
writing thereafter in the manner described above.
15. Successors and Assigns. This Agreement shall be binding upon
----------------------
and inure to the benefit of the successors and assigns of the Company. This
Agreement may not be assigned by any Holder and any attempted assignment hereof
by any Holder will be void and of no effect and shall terminate all obligations
of the Company hereunder, provided that any Holder may assign its rights
-------- ----
hereunder to any individual, partnership, corporation, trust or other legal
entity to whom such Holder has transferred any of its Units or Shares. If any
transferee of any Holder shall acquire Units in any manner, whether by operation
of law or otherwise, such Units shall be held subject to all of the terms of
this Agreement, and by taking and holding such Units such transferee shall be
conclusively deemed to have agreed to be bound by and to perform all of the
terms and provisions of this Agreement and such person shall be entitled to
receive the benefits hereof.
9
<PAGE>
16. Counterparts. This Agreement may be executed in any number of
------------
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
17. Governing Law. This Agreement shall be governed by and
-------------
construed in accordance with the laws of the State of Maryland applicable to
contracts made and to be performed wholly within said State.
18. Severability. In the event that any one or more of the
------------
provisions contained herein, or the application thereof in any circumstances, is
held invalid, illegal or unenforceable in any respect for any reason, the
validity, legality and enforceability of any such provision in every other
respect and of the remaining provisions contained herein shall not be in any way
impaired thereby, it being intended that all of the rights and privileges of the
parties hereto shall be enforceable to the fullest extent permitted by law.
19. Entire Agreement. This Agreement is intended by the parties as
----------------
a final expression of their agreement and intended to be the complete and
exclusive statement of the agreement and understanding of the parties hereto in
respect of the subject matter contained herein. There are no restrictions,
promises, warranties or undertakings, other than those set forth or referred to
herein, with respect to such subject matter. This Agreement supersedes all
prior agreements and understandings between the parties with respect to such
subject matter.
[Remainder of Page Intentionally Left Blank]
10
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first written above.
BRADLEY REAL ESTATE, INC.
By:
-------------------------
Name:
Title:
11
<PAGE>
REGISTRATION RIGHTS AGREEMENT
HOLDER SIGNATURE PAGE
Holder:
--------------------------------
Print Name:
Address for Notice:
------------------
________________________________________
________________________________________
________________________________________
________________________________________
Copy to:
12
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
The Board of Directors
Bradley Real Estate, Inc.:
We consent to the use of our report dated January 23, 1995 incorporated
herein by reference and to the reference to our firm under the heading
"Experts" in the Joint Proxy Statement/Prospectus.
/s/ KPMG Peat Marwick LLP
_____________________________________
KPMG Peat Marwick LLP
Boston, Massachusetts
January 25, 1996
<PAGE>
EXHIBIT 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
The Board of Directors
Tucker Properties Corporation
We consent to the inclusion by reference in this Amendment No. 2 to the
registration statement on Form S-4, to which this consent is filed as an
exhibit, of our reports dated March 24, 1995 on our audits of the financial
statements and the financial statement schedule of Tucker Properties
Corporation and Subsidiaries. We also consent to the reference to our firm
under the caption "Experts".
/s/ Coopers & Lybrand L.L.P.
_____________________________________
Coopers & Lybrand L.L.P.
Chicago, Illinois
January 25, 1996
