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