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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report: August 7, 1998
Date of earliest event reported: July 31, 1998
_______________________
BRADLEY REAL ESTATE, INC.
(Exact name of Registrant as specified in its charter)
MARYLAND 1-10328 04-6034603
(State or other jurisdiction (Commission File (I.R.S. Employer
of incorporation) Number) Identification No.)
40 SKOKIE BOULEVARD, NORTHBROOK, ILLINOIS 60062
(Address of principal executive offices and zip code)
Registrant's telephone number, including area code:
(847) 272-9800
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Item 2. Acquisition or Disposition of Assets.
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Sale of One North State Property
--------------------------------
On July 31, 1998, Bradley Real Estate, Inc. ("Bradley") sold the One North
State property, a "mixed use" retail/office building located in downtown
Chicago, for a gross sales price of approximately $84.5 million, subject to
certain closing adjustments, to two private institutional buyers, Whitehall
Street Real Estate Limited Partnership IX and the Archon Group (the
"Purchasers"). The purchase price was the result of a bidding process
established by Bradley for the property and subsequent arms' length negotiations
between Bradley and the Purchasers concerning certain adjustments to the bid
price. There had been no material relationship between the Purchasers and
Bradley or any of its affiliates, directors or officers or any associate of a
director or officer of Bradley.
Acquisition of Mid-America Realty Investments, Inc. by Merger
-------------------------------------------------------------
On August 6, 1998, pursuant to an Agreement and Plan of Merger dated as of
May 30, 1998 (the "Merger Agreement") between Mid-America Realty Investments,
Inc., a Maryland corporation ("Mid-America"), and Bradley, Mid-America was
merged with and into Bradley (the "Merger") with Bradley as the surviving
corporation in the Merger. The Merger and the Merger Agreement were approved by
the stockholders of Mid-America at its Special Meeting of Stockholders held on
August 5, 1998.
At the effective time of the Merger (the "Effective Time"), the separate
corporate existence of Mid-America ceased and each issued and outstanding share
of common stock, par value $.01 per share (the "Mid-America Common Stock"), of
Mid-America was converted into the right to receive forty-two hundredths (0.42)
of a share of 8.4% Series A Convertible Preferred Stock, par value $.01 per
share ("Series A Preferred Stock"), of Bradley. In lieu of fractional shares,
holders of Mid-America Common Stock ("Mid-America Stockholders") are being paid
an amount in cash (without interest), rounded to the nearest cent, determined by
multiplying $25.00 by the fraction of a share of Series A Preferred Stock, if
any, to which such holder would otherwise be entitled. The Series A Preferred
Stock will pay an annual dividend equal to 8.4% of the $25.00 liquidation
preference and is convertible into shares of common stock, par value $.01 per
share ("Bradley Common Stock"), of Bradley at a conversion price of $24.49 per
share, subject to certain adjustments (the "Conversion Price"). At any time
after five years, the Series A Preferred Stock is redeemable at Bradley's option
for $25.00 per share so long as the Bradley Common Stock is trading at or above
the Conversion Price. The Series A Preferred Stock has been approved for
listing on the New York Stock Exchange.
Based upon the number of shares of Mid-America Common Stock outstanding at
the Effective Time, the former Mid-America stockholders received approximately
3,480,210 shares of Series A Preferred Stock as a result of the Merger,
convertible into approximately 12.21% of the aggregate number of outstanding
shares of Bradley Common Stock on a fully diluted basis. There was no material
relationship between Mid-America or its stockholders and Bradley or any of its
affiliates, directors or officers, or any associate of a director or officer of
Bradley.
Mid-America, which had elected to qualify as a real estate investment trust
("REIT") under the Internal Revenue Code of 1986, as amended (the "Code"), was a
self-administered REIT, which owned, managed and operated income producing real
estate consisting primarily of community and neighborhood shopping centers and
enclosed malls. Upon consummation of the Merger, Bradley effectively acquired
Mid-America's 22 properties, certain office equipment and other assets described
in Bradley's Registration Statement on Form S-4 (No. 333-57123) effective July
1, 1998 (the "Registration Statement") and succeeded to Mid-America's 50%
general partner interest in Mid-America Bethal Limited Partnership, a joint
venture which owns two neighborhood shopping centers and one enclosed mall.
Following the Merger, Bradley contributed title to 15 of the properties it
acquired from Mid-America and its 50% general partner interest in Mid-America
Bethal Limited Partnership to Bradley Operating Limited Partnership (a 95% owned
subsidiary) (the "Partnership") in exchange for 3,480,210 preferred
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units of limited partnership interest of a newly created class with
substantially similar economic rights as the Series A Preferred Stock. Bradley
holds title to the remaining seven properties acquired from Mid-America and any
proceeds therefrom for the benefit of the Partnership. As a consequence, the
Partnership has effectively acquired all of the business and assets (subject to
the liabilities) of Mid-America. The contribution will have no effect upon the
consolidated financial statements of Bradley.
Bradley intends to continue to use the acquired assets in the same manner
and to conduct the same type of business as Mid-America did prior to the Merger,
although it may seek to dispose of the enclosed malls or certain of the other
properties that may not be consistent with Bradley's strategic focus.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
------------------------------------------------------------------
Pursuant to Instruction B.3. to Form 8-K, the financial statements of Mid-
America and pro forma financial information of Bradley relating to the
acquisition and the disposition described in Item 2 above were reported
previously in the Registration Statement.
Exhibits
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NUMBER DESCRIPTION
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2.1 Agreement and Plan of Merger, dated as of May 30, 1998, between
Mid-America Realty Investments, Inc. and Bradley Real
Estate, Inc. (the "Merger Agreement"), attached as Annex
A to the Proxy Statement/Prospectus included in Part I of
the Registration Statement on Form S-4 (No. 333-57123)
and incorporated herein by reference. 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 Exhibit.
Pursuant to Item 601(b)(2) of Regulation S-K, the
Schedules and the Disclosure Letters to the Merger
Agreement are omitted. Bradley hereby undertakes to
furnish supplementally a copy of any omitted Schedule to
the Commission upon request.
*2.2 Purchase and Sale Agreement, dated as of June 15, 1998, by and
among Bradley Real Estate, Inc. and Whitehall Street Real
Estate Limited Partnership IX and the Archon Group.
*4.1 Articles of Merger between Bradley Real Estate, Inc. and Mid-
America Realty Investments, Inc. dated August 6, 1998.
4.2 Form of Articles Supplementary Establishing and Fixing the Rights
and Preferences of a Series of Shares of Preferred Stock for the
8.4% Series A Convertible Preferred Stock of Bradley Real Estate,
Inc. attached as Annex B to the Proxy Statement/Prospectus
included in Part I to the Registration Statement on Form S-4 (No.
333-57123) and incorporated herein by reference.
4.3 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.
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4.4 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.
*10.1 Amendment to Second Restated Agreement of Limited Partnership of
Bradley Operating Limited Partnership, dated August 6, 1998,
designating the 8.4% Series A Convertible Preferred Units.
*99.1 Press Release announcing the consummation of the merger of Mid-
America Realty Investments, Inc. with and into Bradley Real
Estate, Inc.
____________________
* Filed herewith.
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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 hereunto duly authorized.
BRADLEY REAL ESTATE, INC.
By: /s/ Thomas P. D'Arcy
--------------------
Date: August 7, 1998 Thomas P. D'Arcy
Chairman, President and Chief Executive
Officer
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EXHIBIT 2.2
PURCHASE AGREEMENT
THIS PURCHASE AGREEMENT ("Agreement") is made as of May 27, 1998,
by and between Bradley Financing Partnership, a Delaware general partnership
("Seller") and W9/ONS Real Estate Limited Partnership, a Delaware limited
partnership ("Purchaser").
In consideration of this Agreement, Seller and Purchaser agree as follows:
1. SALE OF SUBJECT PROPERTY. Seller agrees to sell to Purchaser and
Purchaser agrees to buy from Seller, all of Seller's right, title and interest
in and to the following property (collectively, "Subject Property"):
(a) REAL PROPERTY. Fee simple interest in that certain parcel of
real estate located at One North State Street, Chicago, Illinois, legally
described on Exhibit A attached hereto and made a part hereof ("Land"),
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together with (i) all building structures, improvements and fixtures owned
by Seller located on the Land, including two interconnected mixed use
office and retail buildings of 11 and 16 floors respectively
("Improvements"), and (ii) all rights, privileges, servitudes and
appurtenances thereunto belonging or appertaining, including all right,
title and interest of Seller, if any, in and to the streets, alleys and
rights-of-way across, beneath, through and adjacent to the Land and the
Improvements (collectively, the "Real Property").
(b) PERSONAL PROPERTY. All of the equipment and personal property
owned by Seller and used in the operation of the Real Property and
described on Exhibit B attached hereto and made a part hereof ("Personal
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Property").
(c) LEASES. Seller's interest as lessor in and to the leases, license
agreements and other occupancy agreements described on Exhibit C attached
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hereto and made a part hereof, together with all amendments or
modifications thereto (collectively, "Leases").
(d) PERMITS. Seller's interest in and to the licenses, permits, and
certificates of occupancy described on Exhibit D attached hereto and made a
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part hereof in Seller's possession, to the extent the same are assignable
("Permits").
(e) SERVICE CONTRACTS. Subject to the provisions of the following
sentence, Seller's interest in and to the existing service and maintenance
contracts described on Exhibit E attached hereto and made a part hereof,
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together with all amendments or modifications thereto ("Service
Contracts"). On or before the Contingency Date (as herein defined),
Purchaser shall advise Seller, in writing, of any Service Contracts that
Purchaser does not desire to be assigned to and assumed by Purchaser at
Closing (as herein defined), and any such Service Contracts shall, at
Seller's cost and expense, be terminated prior to Closing; provided,
however, it is understood that Service Contracts listed as items 1, 4, 6,
24, 26, 28 and 30 on Exhibit E may not be terminated at Closing, and shall
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be assigned to and assumed by Purchaser. Failure by Purchaser to notify
Seller prior to the Contingency Date, shall constitute an election by
Purchaser to have all of the Service Contracts assigned to and assumed by
Purchaser.
(f) WARRANTIES. Seller's interest in and to all unexpired warranties
and guaranties given or assigned to or benefitting Seller or the Real
Property or the Personal Property regarding the acquisition, construction,
design, use, operation, management or maintenance of the Real Property or
the Personal Property and described on Exhibit F attached hereto and made a
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part hereof in Seller's possession, to the extent the same are assignable
("Warranties").
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(g) PLANS. Seller's interest in and to all final plans and
specifications relating to the construction of the Improvements in Seller's
possession, to the extent the same are assignable ("Plans").
Anything herein to the contrary notwithstanding, the Subject Property
specifically excludes the following property:
(a) Seller's right, title and interest in and to the pending legal
proceedings concerning the Subject Property described on Exhibit J and the
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right to any settlement or other like amount (including insurance proceeds)
made available in connection therewith.
(b) Seller's right, title and interest in and to any refund, relief,
abatement or like reimbursement of amounts paid to the relevant taxing
authority (i) as part of the so-called "circulator" tax assessment levied
against the Real Property for the proposed installation of a light rail
system serving the downtown Chicago "loop" area, and (ii) which are the
subject of any current real estate tax contest proceeding concerning the
Real Property for calendar years 1993, 1994, 1996 and 1997 (second
installment), except to the extent that any such refund, relief, abatement
or like reimbursement is due to any tenants pursuant to any Lease.
2. PURCHASE PRICE. Purchaser shall pay to Seller, as consideration for
the purchase of the Subject Property, the sum ("Purchase Price") of Eighty-Five
Million and 00/100 Dollars ($85,000,000.00). The Purchase Price shall be
payable as follows:
(a) Concurrently herewith, Purchaser shall deposit the sum of Five
Hundred Thousand and 00/100 Dollars ($500,000.00) with the escrow
department of Lawyers Title Insurance Corporation ("Title
Company") pursuant to an escrow agreement in substantially the
form of Exhibit G attached hereto and made a part hereof, which
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sum, together with any interest thereon less any investment fees
related thereto, is sometimes hereinafter collectively referred
to as the "Earnest Money", all or a portion of which shall, at
Purchaser's election, be credited against the Purchase Price or
returned to Purchaser at Closing.
(b) The balance of the Purchase Price, plus or minus prorations and
other adjustments, if any, shall be due at Closing and shall be
paid by wire transfer of immediately available funds.
3. CONDITIONS PRECEDENT TO CLOSING. Purchaser's obligation to consummate
the transaction contemplated by this Agreement shall be subject to satisfaction
or waiver of each of the following conditions ("Conditions Precedent") on or
before June 3, 1998 ("Contingency Date"):
(a) TITLE/SURVEY. Seller has previously furnished to Purchaser (i) a
current title commitment ("Commitment") for an owner's title policy issued
by the Title Company showing title in Seller (with copies of all underlying
title documents listed in the Commitment with the commitment of the Title
Company to delete general exceptions 1 through 5 (which Commitment is in a
nominal amount, but shall be increased to the Purchase Price at Closing),
and (ii) a survey ("Survey") for the Real Property prepared in accordance
with the Minimum Standard Detail Requirements for Class A Land Title
Surveys (jointly established by ALTA/ACSM, as revised in 1992) and
certified to Purchaser, Seller and the Title Company. If the Commitment
shows exceptions or the Survey discloses survey defects that are
objectionable to Purchaser, then Purchaser shall notify Seller, in writing,
on or before May 27, 1998, specifying any such objectionable title or
survey matter. If Purchaser so notifies Seller of such objections, then on
or before the Contingency Date, Seller may provide Purchaser with adequate
assurances that any such objectionable title or survey matter will be
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removed or endorsed over, in form and substance acceptable to Purchaser, on
or before Closing. Seller shall not be in breach or default of this
Agreement if Seller does not give Purchaser such assurances, it being
understood that Seller shall have no duty or obligation to cause any such
objectionable title or survey matter to be removed or endorsed over other
than liens or encumbrances of an ascertainable amount created by Seller,
and other then liens or encumbrances of an ascertainable amount created by
parties other than Seller, not to exceed $100,000.00. Matters disclosed by
the Commitment or the Survey which are not objected to by Purchaser or
which are objected to but which are waived by Purchaser shall constitute
"Permitted Encumbrances"; any other title or survey matters shall
constitute "Unpermitted Encumbrances." On or prior to the Contingency Date,
Seller and Purchaser shall prepare a list of the Permitted Encumbrances,
which list shall be incorporated herein by reference and made a part hereof
as Exhibit H. Failure of Purchaser to notify Seller in writing of any
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objectionable title or survey matter on or before May 27, 1998, shall
constitute an election by Purchaser to take title to the Real Property
subject to all such title and survey matters as are disclosed by the
Commitment and the Survey.
(b) TESTS. Seller has previously delivered to Purchaser (or provided
Purchaser with access to) true and correct copies of all Leases, Permits,
Warranties, Plans, Service Contracts and all environmental assessment,
structural, soils and other reports prepared for Seller by third party
consultants of Seller concerning the physical condition of the Real
Property in Seller's possession or reasonable control with respect to the
Subject Property for Purchaser's review and analysis, it being understood
that any reports concerning the physical condition of the Real Property
have been furnished or made available without representation or warranty
regarding the contents thereof. Seller shall allow Purchaser and
Purchaser's officers, employees, agents, attorneys, accountants, architects
and engineers access to the Real Property, subject to the rights of the
tenants under the Leases, and books and records relating to the Subject
Property, without charge and at all reasonable times (including any time
from and after the Contingency Date thru and including the Closing Date,
provided this Agreement has not been terminated subject to and in
accordance with the conditions and limitations herein contained), for the
purpose of making any inspections, tests and verifications (collectively,
"Tests") as they shall deem reasonably necessary. Purchaser shall have the
absolute right to terminate this Agreement at any time through the
Contingency Date if Purchaser is not satisfied, in its sole discretion,
with the results of any of the Tests. In the event of such termination,
the Earnest Money less the sum of $100.00 (which shall be the consideration
paid to Seller for Purchaser's right to conduct the Tests) shall be
returned to Purchaser and neither party shall have any further obligation
to the other except for Purchaser's obligations pursuant to this Section
3(b), which obligations shall survive any such termination. Purchaser
shall pay all costs and expenses of the Tests and shall defend, indemnify
and hold harmless Seller and its partners and their respective agents,
employees, officers, directors, affiliates and contractors and the Subject
Property from and against any and all loss, cost, damage, liability,
settlement, cause of action or threat thereof or expense (including,
without limitation, reasonable attorneys' fees and costs) arising from or
relating to the Tests. Purchaser acknowledges that all on-site inspections
shall be at the sole risk and expense of Purchaser. Purchaser shall
obtain and maintain during the conduct of any Tests commercial general
liability insurance with limits of not less than $5,000,000.00 naming
Seller as an additional insured, as evidenced by certificates of insurance
(coupled with evidence of endorsement of the insurance binder reasonably
satisfactory to Seller). Purchaser shall promptly repair and restore any
damage to the Subject Property attributable to Purchaser's testing and
return the Subject Property to substantially the same condition as
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existed prior to the conduct of the Tests. No Tests shall be done without
Seller's approval as to the time and manner of such Tests, which approval
shall not be unreasonably withheld or delayed, and, at Seller's option, any
such Tests shall be performed in the presence of a representative of
Seller, and shall be conducted in such a manner so as to minimize
interference with the operation of the Subject Property and the business of
tenants and occupants. If Purchaser elects to terminate this Agreement on
or before the Contingency Date, Purchaser shall promptly deliver to Seller
copies of any environmental assessment prepared with respect to the Subject
Property without representation or warranty; provided, however, if
Purchaser and any party performing such assessment have entered into a
written agreement prohibiting delivery of any such environmental assessment
to any other party, Purchaser shall not be required to so deliver copies of
any such environmental assessment. Purchaser shall keep all information
obtained by Purchaser arising from or relating to the Tests confidential
except such information may be disclosed to Purchaser's affiliates,
advisors, financing sources, consultants, or as otherwise required in
connection with legal requirements or legal process. The obligations of
Purchaser under this Section 3(b) shall survive Closing (or termination) of
this Agreement, notwithstanding any provision to the contrary herein
contained.
(c) IRPTA DISCLOSURE DOCUMENT. Within five (5) days following
execution and delivery of this Agreement, Seller shall deliver to Purchaser
an Illinois Responsible Property Transfer Act ("Act") Disclosure Document
("IRPTA Disclosure Document") with respect to the Subject Property.
Purchaser's obligation to consummate the transaction contemplated by this
Agreement is subject to Purchaser's satisfaction, in its sole and absolute
discretion, on or before the Contingency Date, with the matters disclosed
by the IRPTA Disclosure Document.
If any of the Conditions Precedent have not been satisfied on or
before the Contingency Date, then this Agreement may be terminated, at
Purchaser's option, by written notice from Purchaser to Seller. Such notice of
termination may be given at any time on or before the Contingency Date. Upon
such termination, neither party will have any further rights or obligations
regarding this Agreement or the Subject Property, and the Earnest Money shall be
returned to Purchaser. Failure of Purchaser to give Seller notice of termination
on or before the Contingency Date shall constitute a waiver by Purchaser of the
Conditions Precedent. All the Conditions Precedent are specifically stated and
agreed to be for the sole and exclusive benefit of Purchaser and Purchaser shall
have the right unilaterally to waive, in whole or in part, any Condition
Precedent by written notice to Seller.
4. COVENANTS BY SELLER. Seller covenants and agrees with Purchaser that
from the date hereof until the Closing Date (as herein defined), Seller shall
conduct its business involving the Subject Property as follows, and during such
period will (except as specifically provided to the contrary herein):
(a) Refrain from transferring any of the Subject Property, or creating
on the Subject Property any easements other than as may be required prior
to the Closing Date by any applicable governmental or quasi governmental
authority or by a provider of utility services; provided, however, nothing
herein shall preclude Seller from replacing any equipment, supplies or
machinery in the ordinary course of operating the Subject Property;
(b) Refrain from entering into or amending any contracts or other
agreements regarding the Subject Property (other than contracts in the
ordinary course of business which are cancelable by the owner of the
Subject Property without penalty within thirty (30) days after giving
notice thereof) without the prior written consent of Purchaser.
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(c) Operate, maintain, repair and insure the Subject Property in a
manner consistent with the existing operation, maintenance, repair and
insurance of the Subject Property;
(d) Refrain from entering into any new leases, amendments, extensions
or expansions (unless required to do so by the terms and any Lease) with
respect to the Real Property without Purchaser's written approval, as
provided below. Seller shall furnish Purchaser with a true and complete
copy of any such proposed lease, amendment, extension, or expansion that
Seller desires to enter into with respect to the Real Property. Purchaser
shall have five (5) business days from receipt of any such lease,
amendment, extension, or expansion to approve or disapprove the same in
Purchaser's sole discretion. In the event Purchaser does not approve any
such lease, amendment, extension, or expansion Purchaser shall notify
Seller in writing of the same prior to expiration of said 5-business day
period stating under what conditions, if any, Purchaser's approval would be
forthcoming. Failure by Purchaser to notify Seller in writing within said
5-business day period shall constitute an approval by Purchaser of any such
lease, amendment, extension, or expansion. All costs of tenant
improvements and leasing commissions with respect to any such lease,
amendment, extension or expansion approved or deemed approved by Purchaser
and entered into between the date of this Agreement and the Closing Date
shall be paid by Purchaser.
5. REPRESENTATIONS AND WARRANTIES BY SELLER. Seller represents and
warrants to Purchaser as follows:
(a) AUTHORITY. Seller is a general partnership duly organized and
validly existing and in good standing under the laws of the State of
Delaware and in good standing under the laws of the State of Illinois;
Seller has the requisite power and authority to enter into and perform this
Agreement and Seller's Closing Documents (as herein defined); such
documents have been duly authorized by all necessary action on the part of
Seller and have been or will be duly executed and delivered; such
execution, delivery and performance by Seller of such documents will not
conflict with or result in a violation of Seller's organizational
documents, or any judgment, order, or decree of any court or arbiter to
which Seller is a party or any agreement or instrument by which Seller is
bound; such documents are valid and binding obligations of Seller, and are
enforceable against Seller in accordance with their terms, subject to
applicable bankruptcy, insolvency, reorganization, creditor's rights and
other similar laws.
(b) UTILITIES. Seller has received no written notice of actual or
threatened reduction or curtailment of any utility service now supplied to
the Real Property.
(c) HAZARDOUS SUBSTANCES. Except as set forth in the Environmental
Reports (as herein defined), to the knowledge of Seller, the Real Property
does not contain, and there is not located on, in or under any part of the
Real Property, any of the following: "toxic substances," "toxic materials,"
"hazardous waste," "hazardous substances," "pollutants," or "contaminants"
[as those terms are defined in the Resource, Conservation and Recovery Act
of 1976, as amended (42 U.S.C. (S) 6901 et. seq.), the Comprehensive
Environmental Response Compensation and Liability Act of 1980, as amended
(42 U.S.C. (S) 9601 et. seq.), the Hazardous Materials Transportation Act,
as amended (49 U.S.C. (S) 1801 et. seq.), the Toxic Substances Control Act
of 1976, as amended (15 U.S.C. (S) 2601 et. seq.), the Clean Air Act, as
amended (42 U.S.C. (S) 1251 et. seq.) and any other federal, state or local
law, statute, ordinance, rule, regulation, code, order, approval, policy
and authorization relating to health, safety or the environment (said laws
being hereafter referred to collectively as "Environmental Laws")] in
violation of applicable Environmental Laws asbestos or asbestos containing
materials; lead or lead containing materials; oils; petroleum-derived
compounds; pesticides; or polychlorinated
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biphenyls (all of which are hereafter collectively referred to as
"Hazardous Materials"). To Seller's knowledge, no part of the Real Property
has been previously used by Seller, or by any other person or entity, for
the storage, manufacture or disposal of Hazardous Materials, except as may
be disclosed in the environmental reports delivered by Seller to Purchaser
or in any other environmental report prepared on behalf of Purchaser
(collectively, the "Environmental Reports") in violation of applicable
Environmental Laws. Seller has not received from any governmental body
having authority any written complaint, order, citation or notice of
violation with regard to air emissions, water discharges, noise emissions
and Hazardous Materials, if any, or any other environmental, health or
safety matters affecting the Real Property or any part thereof, which has
not been remedied or remains outstanding. Except as set forth in the
Environmental Reports, to the knowledge of Seller, there are no underground
storage tanks of any nature located on any of the Real Property.
Notwithstanding the foregoing, Purchaser acknowledges the existence of
asbestos and asbestos containing materials at the Real Property.
(d) FIRPTA. Seller is not a "foreign person," "foreign partnership,"
"foreign trust" or "foreign estate" as those terms are defined in Section
1445 of the Internal Revenue Code.
(e) PROCEEDINGS. There is no action, litigation, condemnation or
proceeding of any kind pending or, to the best knowledge of Seller,
threatened against Seller which would have a material and adverse affect on
the ability of Seller to perform its obligations under this Agreement, or
against any portion of the Real Property other than (i) the In re Flood
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Litigation and the tax contest proceeding matters described in Article 1 of
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this Agreement and (ii) the matters described on Exhibit J attached hereto
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and made a part hereof.
(f) BOOKS AND RECORDS. The books and records relating to the Subject
Property which have been made or will be made available to Purchaser, and
which have been prepared by Seller's property manager, accurately reflect
the operation of the Subject Property, are the only books and records
prepared by Seller's property manager relating to the Subject Property for
the operating period to which they relate, and Seller does not have any
actual knowledge that any information set forth in such books and records
is not true and correct in all material respects.
(g) LEASES.
The rent roll (the "Rent Roll") attached hereto as Exhibit C-1 is
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true, correct and complete in all material respects as of the date of
this Agreement. Exhibit C is a complete and accurate schedule (the
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"Lease Schedule") of the Leases now in effect, relating to any portion
of the Real Property, including the name of each tenant, the date of
each tenant's Lease and all amendments or modifications, if any,
thereto, and the amount of any security deposit, whether in the form
of cash or a letter of credit, paid or deposited by the tenant under
each Lease. There are no leases, license agreements, occupancy
agreements or tenancies for any space in the Real Property other than
those set forth on the Lease Schedule and there are no oral agreements
relating to use or occupancy of any portion of the Real Property or
any oral leases which will be binding upon any portion of the Real
Property or Purchaser other than set forth on the Lease Schedule.
Except as may be otherwise disclosed on the Rent Roll or the Lease
Schedule:
(i) Each of the Leases is in full force and effect according
to the terms set forth therein subject to (i) applicable
bankruptcy, insolvency, reorganization, moratorium, creditor's
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rights and other similar laws limiting the enforceability of
creditor's rights generally, as from time to time in effect; and
(ii) general principles of equity, whether considered in a
proceeding at law or in equity.
(ii) there are no arrearages of base annual rent or any
additional rent payable by any tenant in excess of one (1) month.
(iii) to the knowledge of Seller, none of the tenants are in
default in the observance of any of the material covenants or
conditions to be kept, observed or performed by it under its
Lease beyond any applicable grace or cure period;
(iv) no tenant is entitled to any free rent, rebate, rent
concession, deduction or offset not set forth in the Leases;
(v) Other than any amounts that may be owing pursuant to any
Lease entered into in compliance with the provisions of Section
4(d) of this Agreement, no tenant is entitled to receive money,
or any contribution from the landlord, either in money or in
kind, on account of the construction of any improvements as a
condition to commencement of the Leases and, except for the
obligations disclosed on the Lease Schedule (which shall be the
responsibility of Seller), all alterations, installations,
decorations and other work required to be performed by the
landlord under the Leases as a condition to commencement of the
Leases have been completed and fully paid for;
(vi) Seller has not received from any tenant under a Lease a
written notice of default by Seller in performing any of its
obligations as landlord under such Lease or a written notice of
violation of any statute, rule, law, ordinance, or other legal
regulation pertaining to the Real Property or any part thereof;
(vii) Seller has the sole right to collect rent under each
Lease and such right has not been assigned, pledged, hypothecated
or otherwise encumbered, except for an assignment as security for
the payment of any indebtedness to any existing mortgage holder
of the Real Property that Seller shall discharge and release at
or prior to settlement hereunder; and
(viii) all security deposits required under the Leases have
been paid and are being held by Seller.
(h) CONTRACTS. Exhibit E is a complete and accurate schedule (the
---------
"Contract Schedule") of all Service Contracts now in effect, relating to
the Real Property, except for management and leasing agreements which
Seller shall terminate on the Closing Date without penalty or liability to
Purchaser ("Terminating Management and Leasing Contracts"). Except as set
forth on the Contract Schedule and except for Terminating Management and
Leasing Contracts, there are no oral agreements between Seller and service
contractors relating to the management, leasing, operation or maintenance
of the Real Property or any portion thereof. Seller has not delivered or
received any written notice alleging any default in the performance or
observance of any of the covenants, conditions or obligations to be kept,
observed or performed under any of the Service Contracts that has not been
cured or remedied.
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(i) UNPAID BILLS. All bills and claims for labor performed or
materials furnished to Seller for the benefit of Real Property for the
period prior to the Closing Date have been (or prior to the Closing Date
will be ) paid in full or Purchaser shall receive a credit for any unpaid
amount in accordance with the provisions of Article 9 of this Agreement.
(j) MANAGEMENT AND LEASING AGREEMENTS. On the Closing Date, there will
be no contacts or agreements in effect with any party for the management or
leasing of the Real Property (other than agreements entered into by
Purchaser) and the Terminating Management and Leasing Contracts shall be
terminated by the parties thereto without penalty or liability to
Purchaser.
(k) LEASING COMMISSIONS. On the Closing Date there shall be no leasing
commissions that are payable or may hereafter become payable in connection
with any of the Leases described in the Lease Schedule or any renewals or
extensions thereof or any expansion options set forth in such Leases,
except (i) those commissions (the "Renewal Commissions") set forth on
Exhibit C that are due and payable in the event a tenant exercises an
---------
option available under a Lease to renew or extend the term of the Lease or
expand the space occupied by the tenant, (ii) those other commissions (the
"Other Commissions") which become due and payable after the Closing Date
upon conditions set forth in the commission agreements described on Exhibit
-------
C, complete copies of which have been delivered to Purchaser prior to the
-
date hereof, and (iii) any commissions that may be owing pursuant to Leases
entered into in compliance with the provisions of Section 4(d) of this
Agreement. All Renewal Commissions and all Other Commissions which may
become due and payable (other than any such commissions that may be owing
pursuant to Leases entered into in compliance with the provisions of
Section 4(d) hereof) after the date hereof are set forth on Exhibit C.
---------
(l) COMPLIANCE WITH LAWS. Seller has not received any written notice
of any violations of law, statutes, rules, governmental ordinances,
orders or requirements noted or issued by any governmental authority
having jurisdiction over or affecting the Real Property that has not
been cured or remedied.
(m) BANKRUPTCY. There is no bankruptcy, insolvency, rearrangement or
similar action or proceeding, whether voluntary or involuntary,
pending or, to the Seller's knowledge, threatened against Seller.
(n) INSURANCE. Seller has not received from any insurance company
which carries insurance on any of the Real Property, or any Board of
Fire Underwriters, any written notice of any defect or inadequacy in
connection with the Real Property, or its operation.
(o) PERSONAL PROPERTY. The execution and delivery to Purchaser of the
Bill of Sale required by Section 9(b)(ii) shall vest title to all of the
Personal Property in Purchaser, free and clear of liens, encumbrances and
adverse claims. Exhibit B attached hereto is a complete and accurate
schedule of all the Personal Property.
(p) LABOR UNIONS. Seller is not a party to any contract or agreement
with any labor union except as set forth on Exhibit K attached hereto
---------
and made a part hereof. Seller has delivered to Purchaser true,
correct and complete copies of the agreements identified on Exhibit K.
---------
(q) SPECIAL ASSESSMENTS. Except as shown on any tax bills delivered
to Purchaser and the Commitment, Seller has not received any notice, in
writing, of any special assessment which affects the Subject Property.
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(r) NO OTHER AGREEMENTS. Except for the Leases, Permits, Warranties,
Plans, Service Contracts, Permitted Encumbrances, and the matters
described in Section 3(b), there are no contractual agreements that bind
Seller, as the owner of the Real Property.
For purposes of this Agreement, the phrase "to the best of Seller's
knowledge" or words of similar import shall mean the actual knowledge of E. Paul
Dunn, as Executive Vice President of Bradley Real Estate, Inc. and Craig B.
Matuszewski, as General Manager of Bradley Real Estate, Inc., without
independent inquiry or investigation. Seller represents and warrants to
Purchaser that the foregoing individuals are the individuals with direct
responsibility for the operations of the Subject Property.
6. REPRESENTATIONS AND WARRANTIES BY PURCHASER AND OTHER MATTERS.
(a) REPRESENTATIONS AND WARRANTIES BY PURCHASER. Purchaser represents
and warrants to Seller that Purchaser is a limited partnership duly organized
and validly existing and in good standing under the laws of the State of
Delaware; that Purchaser has the requisite power and authority to enter into
this Agreement and Purchaser's Closing Documents (as herein defined); such
documents have been duly authorized by all necessary action on the part of
Purchaser and have been or will be duly executed and delivered; that the
execution, delivery and performance by Purchaser of such documents will not
conflict with or result in violation of Purchaser's organizational documents or
any judgment, order or decree of any court or arbiter to which Purchaser is a
party or any agreement or instrument by which Purchaser is bound; such documents
are valid and binding obligations of Purchaser, and are enforceable against
Purchaser in accordance with their terms, subject to applicable bankruptcy,
insolvency, reorganization, creditor's rights and other similar laws.
(b) OTHER MATTERS. The representations and warranties contained in
this Agreement shall survive Closing; provided, however, (i) any cause of action
of Purchaser against Seller by reason of a breach or default of any of the
representations and warranties set forth herein shall expire as of the date
twelve (12) months following the Closing Date (the "Warranty Expiration Date"),
except that the same shall not expire as to any such breach or default as to
which Purchaser has (x) notified Seller, in writing, prior to Warranty
Expiration Date and (y) instituted litigation prior to the date eighteen (18)
months following the Closing Date, (ii) Seller's total liability for breach
thereof shall in no event exceed $7,500,000.00 in the aggregate, and Seller
shall have no liability with respect to any breach to the extent the loss
sustained by Purchaser as a result thereof does not exceed $150,000.00 in the
aggregate, provided, further, if any such loss exceeds $150,000.00, Seller shall
be liable for the total amount of such loss subject to the maximum loss
provisions herein contained, and (iii) Seller shall have no liability
whatsoever to Purchaser with respect to a breach of any of the representations
and warranties herein contained if, prior to the Closing Date, Purchaser
obtains knowledge (which, for purposes of this paragraph, shall mean the actual
knowledge of James W. Jones and Ernest O. Perry, III, based upon investigation
and inquiry being made by Purchaser in the course of its due diligence and
investigations for the Subject Property, and Purchaser represents and warrants
that the foregoing individuals are the individuals with direct responsibility
for the analysis and underwriting for the Subject Property, including reviewing
any Test results) of a fact or circumstance the existence of which would
constitute a breach of Seller's representations and warranties hereunder. For
purposes hereof, Purchaser shall be deemed to have knowledge of any fact or
circumstance set forth in the estoppel letters delivered to Purchaser and in any
environmental assessment or engineering report or other written due diligence
information or material received or reviewed by Purchaser, and the
representations and warranties herein contained shall be deemed modified to the
extent information contained in any estoppel certificate delivered to Purchaser
prior to Closing or in any environmental assessment or engineering report or
other written due diligence information or material received or reviewed by
Purchaser is inconsistent with the matters covered herein.
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7. CLOSING.
(a) CLOSING DATE. The closing of the purchase and sale contemplated
by this Agreement (the "Closing") shall occur on or before July 1, 1998
("Closing Date"), subject to delays occasioned by operation of Paragraph
8(b) at the office of the Title Company, 10 South LaSalle Street, Suite
2500, Chicago, Illinois or at such other time and place as the parties may
mutually agree.
(b) PURCHASER'S CLOSING CONDITIONS PRECEDENT. Purchaser's obligation
to consummate the transaction contemplated by this Agreement shall be
subject to satisfaction or waiver of each of the following conditions
("Purchaser's Closing Conditions Precedent"), but Purchaser shall have the
unilateral right to waive any Purchaser's Closing Condition Precedent, in
whole or in part, by written notice to Seller:
(i) The representations and warranties of Seller set forth in
Article 5 hereof shall be, in all material respects, true
and complete.
(ii) Seller shall have performed all of the obligations required
to be performed by Seller under this Agreement, as and when
required by this Agreement, in all material respects.
(iii) Purchaser shall have received, on or before three (3)
business days prior to the Closing Date, estoppel
certificates dated not earlier than thirty (30) days
before the Closing Date in substantially the form of
Exhibit I attached hereto and made a part hereof or
---------
otherwise reasonably approved by Purchaser and conforming
to the representations set forth in Section 5(g) hereof
(provided, however, failure of the estoppel certificates
to conform to such representations shall not constitute a
breach or default by Seller) from the following tenants:
International Academy, Arthur Andersen, First Chicago,
T.J. Maxx and Filene's Basement. Seller shall use
reasonable efforts to obtain estoppel certificates from
all tenants; provided, however, Seller shall not be
required to expend significant monies or make significant
concessions or institute litigation in order to obtain
such estoppel certificates. In the event Purchaser has
not, by the date three (3) business days prior to the
scheduled Closing Date, received estoppel certificates as
required by the preceding sentence, Seller may (A) deliver
a certificate of Seller containing information which was
intended to be included in each such estoppel certificate
(modified to reflect Seller's best knowledge as to such
matters which would be known to a certainty only by the
tenant), which certificate may (but is not required to be)
be accepted by Purchaser in lieu of such estoppel
certificates or (B) extend the Closing Date for a period
not to exceed thirty (30) days to obtain such estoppel
certificates provided Seller is using all reasonable
efforts and due diligence to obtain such estoppel
certificates and, in any case, Seller shall not be in
breach or default of this Agreement because Purchaser has
not received such estoppel certificates or if the estoppel
certificates received do not conform to the
representations set forth in Section 5(g) of this
Agreement. Seller may substitute for a certificate
delivered by Seller a tenant estoppel certificate later
received from a tenant under a Lease for which such
certificate was given. In exercising its reasonable
discretion concerning the acceptability of a tenant
estoppel letter on a form other than that prescribed by
Exhibit I, Purchaser will accept an alternative form which
---------
provides information which is complete in all material
10
<PAGE>
respects concerning the terms of the Lease, the
performance of the parties to the Lease (which may be
limited to the tenant's knowledge in case of landlord
defaults), and the condition of the leased premises.
(c) SELLER'S CLOSING CONDITIONS PRECEDENT. Seller's obligation to
consummate the transaction contemplated by this Agreement shall be subject
to satisfaction or waiver of each of the following conditions ("Seller's
Closing Conditions Precedent"), but Seller shall have the unilateral right
to waive, in whole or in part, any Seller's Closing Condition Precedent by
written notice to Purchaser:
(i) The representations and warranties of Purchaser set forth in
Article 6(a) hereof shall be, in all material respects, true
and complete.
(ii) Purchaser shall have performed all of the obligations
required to be performed by Purchaser under this Agreement,
as and when required by this Agreement, in all material
respects.
In the event Purchaser's Closing Conditions Precedent or Seller's Closing
Conditions Precedent, as the case may be, have not been satisfied or waived as
of the scheduled Closing Date as the same may be extended as permitted above,
and provided the failure to satisfy or waive any such condition is not
attributable to a breach or default of this Agreement by Seller or Purchaser, as
the case may be, this Agreement shall terminate (other than the obligations of
Purchaser set forth in Section 3(b) and Article 13 hereof, which obligations
shall survive any such termination) and the Earnest Money shall be returned to
Purchaser.
8. CLOSING DELIVERIES.
(a) SELLER'S CLOSING DOCUMENTS. On the Closing Date, Seller shall
execute and/or deliver to Purchaser or cause to be executed and/or delivered the
following (collectively, "Seller's Closing Documents"):
(i) DEED. A Special Warranty Deed conveying the Real Property to
Purchaser, free and clear of all encumbrances, except the Permitted
Encumbrances.
(ii) BILL OF SALE. A Bill of Sale transferring the Personal
Property to Purchaser.
(iii) SELLER'S AFFIDAVIT. An Affidavit of Seller indicating that
on the Closing Date, there are no outstanding, unsatisfied judgments,
tax liens (other than the lien of real estate taxes not yet due and
payable) or bankruptcies against or involving Seller or, to the best
of Seller's knowledge, the Real Property; and that, to the best of
Seller's knowledge, there are no other unrecorded interests in the
Real Property other than the Leases.
(iv) ORIGINAL DOCUMENTS. Original copies of the Permits, the
Warranties, and the Plans to the extent in Seller's possession and not
previously delivered to Purchaser.
(v) FIRPTA AFFIDAVIT. A non-foreign affidavit properly
containing such information as is required by IRC Section 1445(b)(2)
and its regulations.
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(vi) BULK SALE CERTIFICATE. A Certificate issued by the Illinois
Department of Revenue showing that Seller does not have any liability
for payment of any tax under the Illinois Income Tax Act or, if
applicable, The Illinois Retailer's Occupation Tax Act.
(vii) IRPTA DISCLOSURE DOCUMENT. An IRPTA Disclosure Document
disclosing all items required by the Act.
(viii) TITLE DOCUMENTS. Such affidavits of Seller or other
documents as may be reasonably required by the Title Company in order
to record the Special Warranty Deed and issue the title insurance
policy required by this Agreement.
(ix) CERTIFICATE. A certificate duly executed by Seller
certifying that all of the representations and warranties set forth in
Article 5 are true and correct in all material respects as of the
Closing Date.
(x) KEYS. All keys to the Real Property which are in Seller's
possession.
(xi) RENT ROLL. A rent roll and schedule updating the Rent Roll
and the Lease Schedule and the most recently available schedule
setting forth all past due and uncollected rent and additional rent
owned by tenants, all prepayments of rent or any additional rent and
all security deposits (including interest thereon, if any) held by
Seller, certified by Seller.
(xii) EVIDENCE OF TERMINATION OF AGREEMENTS. Evidence of the
termination (without penalty or liability to Purchaser) of all
management agreements and leasing agreements of Seller relating to the
Real Property.
(xiii) POSSESSION. On the Closing Date, Seller agrees to give
full, complete and actual possession of the Subject Property to the
Purchaser, subject only to (a) the rights of tenants under the Leases
described in the Lease Schedule and any new leases or lease amendments
executed after the date hereof that are approved in writing by
Purchaser in accordance with Section 4(d), (b) the right of service
provided under the Service Contracts, and (c) Permitted Encumbrances.
Seller agrees to cooperate fully with the Purchaser to ensure that the
transfer of possession takes place with the least possible disruption
in the normal operation of the Subject Property.
(xiv) SELLER'S OPERATING RECORDS. On the Closing Date, Seller
shall deliver to Purchaser all original (or, to the extent that Seller
reasonably requires to retain any of the following items, copies
thereof) books, records, operating reports, files, permits and
licenses, and other materials in Seller's possession or control that
are necessary to a complete continuity in the operation of the Subject
Property and an executed original of each Lease and each Service
Contract to the extent in Seller's possession and not previously
delivered to Purchaser.
(xv) 1998 BILLS. Copies (to the extent available) of all bills
paid in 1998 by Seller relating to the Real Property.
(b) TITLE POLICY. At Closing, Seller shall cause the Title Company to
deliver to Purchaser its owner's title insurance policy required by this
Agreement. If the owner's title insurance policy which the Title
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Company is prepared to issue shows any Unpermitted Encumbrances, Seller
covenants and agrees, within thirty (30) days (such 30-day period being
sometimes hereinafter referred to as the "Cure Period"), to use reasonable
efforts to remove such Unpermitted Encumbrances or to cause the Title Company to
issue its endorsement (reasonably acceptable to Purchaser) over any such
Unpermitted Encumbrances. If, after using reasonable efforts, as aforesaid,
Seller cannot cause such Unpermitted Encumbrances to be removed or if Seller
cannot cause the Title Company to issue its endorsement (reasonably acceptable
to Purchaser) over any such Unpermitted Encumbrances on or before the expiration
of the Cure Period, Purchaser shall, within five (5) business days following
expiration of the Cure Period, elect to either (1) terminate this Agreement
(other than the obligations set forth in Section 3(b) and Article 13 hereof,
which obligations shall survive any such termination), or (2) take title to the
Real Property as it then is (without any abatement in the Purchase Price unless
any such Unpermitted Encumbrance constitutes a lien or encumbrance of a definite
or ascertainable amount created by Seller or unless any such Unpermitted
Encumbrance constitutes a lien or encumbrance of a definite or ascertainable
amount created by parties other than Seller, in which event the abatement shall
not exceed $100,000.00). Failure of Purchaser to notify Seller within the time
limits prescribed herein shall constitute an election under clause (2) above. In
the event Purchaser terminates this Agreement as provided in clause (1) above
the Earnest Money shall be promptly returned to Purchaser.
(c) PURCHASER'S CLOSING DOCUMENTS. On the Closing Date, Purchaser
will execute and/or deliver or cause to be executed and/or delivered to Seller
the following (collectively, "Purchaser's Closing Documents"):
(i) PURCHASE PRICE. The Purchase Price, by wire transfer of
immediately available funds.
(ii) TITLE DOCUMENTS. Such affidavits of Purchaser or other
documents as may be reasonably required by the Title Company in order
to record the Special Warranty Deed and issue the title insurance
policy required by this Agreement.
(d) PURCHASER'S AND SELLER'S CLOSING DOCUMENTS. On the Closing Date,
Seller and Purchaser shall jointly execute and deliver the following:
(i) CLOSING STATEMENT. A closing statement setting forth the
prorations and adjustments to the Purchase Price as provided
in this Agreement, to be agreed upon and signed by the
parties not later than forty-eight (48) hours prior to the
Closing Date.
(ii) TRANSFER TAX DECLARATIONS.
(iii) ASSIGNMENT OF LEASES AND ASSUMPTION AGREEMENT. An
Assignment of Leases and Assumption Agreement pursuant to which, among
other things, (A) Seller shall assign to Purchaser all of Seller's
right, title and interest as landlord in, to and under the Leases and
Purchaser shall assume the obligations of the landlord under the
Leases with respect to any event, fact or circumstance that occurs
from and after the Closing Date; (B) Seller shall defend, indemnify
and hold harmless Purchaser from and against any lease defaults by the
landlord under the Leases with respect to any event, fact or
circumstance that occurs prior to the Closing Date, and Purchaser
shall defend, indemnify and hold harmless Seller from and against any
lease defaults by the landlord under the Leases with respect to any
event, fact or circumstance that occurs from and after the Closing
Date, and (C) the total liability of Seller for breach thereof shall
be subject to the conditions and limitations set forth in Section 6(b)
of this Agreement, and the total liability of Purchaser for breach
thereof shall be limited to Purchaser's interest in the Subject
Property.
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(iv) ASSIGNMENT OF PLANS, PERMITS AND WARRANTIES AND ASSUMPTION
AGREEMENT. An Assignment of Plans, Permits and Warranties and
Assumption Agreement, pursuant to which, among other things, (A)
Seller shall assign to Purchaser all of Seller's right, title and
interest as owner in, to and under the Plans, Permits and Warranties
and Purchaser shall assume all obligations of the owner under the
Plans, Permits and Warranties with respect to any event, fact or
circumstance that occurs from and after the Closing Date, (B) Seller
shall defend, indemnify and hold harmless Purchaser from and against
any default in the performance by the owner of its obligations under
the Plans, Permits and Warranties with respect to any event, fact or
circumstance that occurs prior to the Closing Date, and Purchaser
shall defend, indemnify and hold harmless Seller from and against any
default in the performance by the owner of its obligations under the
Plans, Permits and Warranties with respect to any event, fact or
circumstance that occurs from and after the Closing Date, and (C) the
total liability of Seller for breach thereof shall be subject to the
conditions and limitations set forth in Section 6(b) of this
Agreement, and the total liability of Purchaser for breach thereof
shall be limited to Purchaser's interest in the Subject Property.
(v) ASSIGNMENT OF SERVICE CONTRACTS AND ASSUMPTION AGREEMENT.
An Assignment of Service Contracts and Assumption Agreement pursuant
to which, among other things, (A) Seller and/or the property manager
shall assign to Purchaser all right, title and interest of Seller
and/or the property manager, as buyer, in, to and under the Service
Contracts, and Purchaser shall assume all obligations of Seller and/or
the property manager under the Service Contracts with respect to any
event, fact or circumstance that occurs from and after the Closing
Date, (B) Seller and/or the property manager shall defend, indemnify
and hold harmless Purchaser from and against any defaults by the buyer
under the Service Contracts with respect to any event, fact or
circumstance that occurs prior to the Closing Date, and Purchaser
shall defend, indemnify and hold harmless Seller and/or the property
manager from and against any defaults by the buyer under the Service
Contracts with respect to any event, fact or circumstance that occurs
from and after the Closing Date, and (C) the total liability of Seller
for breach thereof shall be subject to the conditions and limitations
set forth in Section 6(b) of this Agreement, and the total liability
of Purchaser for breach thereof shall be limited to Purchaser's
interest in the Subject Property.
(vi) NOTICES TO TENANTS. Notices to the tenants under the Leases
advising them of the sale of the Subject Property and directing them
to make future lease payments to Purchaser at the place designated by
Purchaser.
(vii) MISCELLANEOUS. Such other documents, instruments and
affidavits as shall be reasonably necessary to consummate the
transaction contemplated by this Agreement, including without
limitation affidavits identifying any brokers involved as the only
persons entitled to a brokerage or similar commission in connection
with consummation of the transaction contemplated hereby.
(e) ESCROW CLOSING. This transaction shall be closed through an
escrow with the escrow department of the Title Company ("Escrowee"), in
accordance with the general provisions of the Escrowee's usual form of deed and
money escrow agreement with provision for a "New York" style closing and with
special provisions inserted in the escrow agreement as may be required to
conform to this Agreement, and subject to the terms of a
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separate money lender's escrow, if any. The attorneys for both Seller and
Purchaser are authorized to sign the escrow agreement. Upon the creation of such
escrow, payment of the Purchase Price and delivery of the Special Warranty Deed
shall be made through the escrow. The cost of the deed and money escrow shall be
divided equally between Seller and Purchaser, but Purchaser shall be responsible
for any costs associated with a separate money lender's escrow. This Agreement
shall not be merged into nor in any manner superseded by the escrow agreement.
9. ADJUSTMENT AND PRORATIONS. Seller and Purchaser shall make all
adjustments and apportion all expenses with respect to the Subject Property,
including, without limitation, the following:
(a) REAL ESTATE TAXES AND SPECIAL ASSESSMENTS. Seller shall be
responsible for payment to the collecting authorities of all real estate
taxes and installments of special assessments affecting the Real Property
(collectively "Taxes") which have been assessed and which are due and
payable as of the date immediately preceding the Closing Date ("Proration
Date"), and Purchaser shall be responsible for payment to the collecting
authorities of all Taxes which have been or will be assessed and which
become due and payable after the Proration Date. Taxes shall not be
prorated, it being understood that Purchaser shall not be entitled to any
credit for Taxes. Notwithstanding the foregoing, if the Closing Date occurs
prior or subsequent to July 1, 1998, then the appropriate party (Seller, in
the case the Closing Date is prior to July 1, 1998; Purchaser, in the case
the Closing Date is subsequent to July 1, 1998) shall receive a Purchase
Price credit in an amount equal to Tax contributions made or to be made by
tenants (attributable to base rent, additional rent or otherwise) for
period prior or subsequent to July 1, 1998.
(b) TITLE INSURANCE. Seller shall pay for the cost of the owner's
title insurance policy and any reinsurance for portions of the coverage in
excess of $50,000,000.00 required under this Agreement together with a 3.1
zoning endorsement. Purchaser shall pay for the cost of any additional
endorsements to the owner's title insurance policy which Purchaser is able
to obtain from the Title Company, and all costs of any lender's title
insurance policy.
(c) CLOSING FEE. Seller and Purchaser will each pay one-half of any
reasonable and customary closing fee by the Title Company.
(d) DEED TAX. Seller shall pay all state, county and local deed tax
regarding the Special Warranty Deed to be delivered by Seller under this
Agreement.
(e) RENTS. Current and advance rentals; operating expense and
insurance escalations and adjustments and other charges payable by tenants
under the Leases (excluding real estate tax contributions) (collectively,
"Expense Contributions"); utility charges and deposits made by Seller with
respect to common area utilities; and all other items of accrued or prepaid
income and expenses shall be prorated on an accrual basis up to and
including the Proration Date on the basis of the most recent ascertainable
amounts of or other reliable information in respect to each such item of
income and expense. Unapplied security deposits in the possession of
Seller and any interest accrued thereon which is required to be paid to
tenants shall be credited to Purchaser at Closing. Percentage rents under
the Leases shall be adjusted as and when collected, with Seller receiving
that portion of such percentage rent equal to the total amount thereof
multiplied by a fraction, the numerator of which is the number of days
elapsed in the applicable calculation period under such Lease up to and
including the Proration Date and the denominator of which is the total
number of days in such calculation period, and Purchaser receiving the
balance of such percentage rents. Such prorations shall not account for or
reflect any of the foregoing items to the extent any tenant is delinquent
in payment of the same.
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When actual Expense Contributions for the year in which Closing occurs are
known, Purchaser shall bill each tenant for the additional amount, if any,
owed by such tenant as a result of non-payment or underpayment of such
tenant's share of Expense Contributions for the year to which such Expense
Contributions apply under such tenant's Lease. Upon collection of such
amounts the same shall be prorated between Seller and Purchaser, and
Purchaser shall pay Seller all amounts due Seller for the period prior to
the Proration Date as soon as reasonably practical. In the event Expense
Contributions collected by Seller for the period up to and including the
Proration Date exceed actual Expense Contributions for such period, Seller
shall pay to Purchaser an amount equal to the excess of Expense
Contributions collected over actual Expense Contributions for such period
as soon as reasonably practical after such Expense Contributions are known.
Upon reasonable notice to Purchaser, Seller shall have the right for twelve
(12) months following Closing, which time period shall be extended as may
be reasonably required until such time as all Expense Contributions or
percentage rent payments under the Leases can be estimated with reasonable
certainty, to inspect the books and records of the Subject Property to
verify that Purchaser is remitting to Seller all amounts to be remitted to
Seller according to the terms of this Agreement, and for any other purpose
related to Seller's prior ownership of the Subject Property.
Seller shall pay to Purchaser rents (base rent, additional rent or
otherwise) attributable to free rent that extend beyond the Closing Date
with respect to any Leases executed prior to the date of this Agreement. On
the Closing Date, Seller shall deliver to Purchaser a schedule of all past
due but uncollected rent owed by tenants. Purchaser agrees to cause the
amount of such rental arrearages to be included in the first bills
thereafter submitted by Purchaser to such tenants after the Closing Date,
and to use commercially reasonable and diligent efforts to recover such
amounts from tenants after the Closing Date. Any amounts recovered shall be
distributed in the following order of priority: (i) to Purchaser for
amounts due or accrued from tenants from and after the Proration Date, then
(ii) the balance to Seller.
Seller shall deliver to Purchaser on the Closing Date a schedule of all
security deposits held or required to be held by Seller on the Closing Date
which have been deposited by tenants, together with any interest that may
be required under the Leases to be accrued thereon as of the Closing Date.
All security deposits so held or required to be held by Seller (including
interest as aforesaid) shall be transferred and delivered to Purchaser on
the Closing Date. If any security deposit is in the form of a letter of
credit, then Seller shall cause a replacement letter of credit to be issued
and delivered to Purchaser on the Closing Date upon the same terms and
conditions as the original letter of credit. If replacement letters of
credit cannot be issued and delivered to Purchaser on the Closing Date,
then Seller shall deposit with Purchaser on the Closing Date cash equal to
the amount of letters of credit not replaced, to be held by Purchaser as
tenant security deposits until replacement letters of credit are delivered
to Purchaser.
(f) RECORDING COSTS. Seller will pay the cost of recording (i) all
documents necessary to place record title in the condition required by this
Agreement and (ii) the Special Warranty Deed. Purchaser will pay the cost
of recording all other documents required by its lender, if any.
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<PAGE>
(g) OPERATING EXPENSES. All operating costs of the Subject Property
will be allocated between Seller and Purchaser as of the Proration Date, so
that Seller pays that part of such operating costs payable before the
Proration Date, and Purchaser pays that part of such operating costs
payable from and after the Proration Date. If there are meters on the Real
Property measuring consumption of water, gas or electric current for which
tenants are not responsible and which would not constitute Expense
Contributions, Seller and Purchaser shall reasonably cooperate to have such
meters read on or about Closing, and amounts owing shall be prorated
consistent with the provisions of this Section 9(g).
(h) ATTORNEY'S FEES. Each of the parties will pay its own attorneys
fees, except that a party defaulting under this Agreement or any closing
document will pay the reasonable attorney's fees and court costs incurred
by the nondefaulting party to enforce successfully its rights regarding
such default.
(i) OTHER COSTS. All other costs shall be allocated in accordance
with the customs prevailing in similar transactions in the greater Chicago,
Illinois metropolitan area.
Within sixty (60) days following the Closing Date, Purchaser and
Seller shall verify all prorations and shall make such
adjustments as may reasonably be necessary to conform to the
provisions of this Agreement.
10. DEFAULT. (a) If Purchaser defaults in its obligation to consummate
this Agreement, Seller shall be entitled to terminate this Agreement and the
Earnest Money shall be forfeited to Seller, as Seller's sole and exclusive
remedy in the event of a default by Purchaser in consummating this Agreement.
(b) If Seller defaults in its obligation to consummate this Agreement,
Purchaser shall be entitled either to terminate this Agreement and have the
Earnest Money returned, or to enforce specific performance of the terms and
provisions of this Agreement, as Purchaser's sole and exclusive remedy in the
event of a default by Seller in consummating this Agreement.
11. DAMAGE. If, prior to the Closing Date, all or any part of the
Improvements are substantially damaged by fire or other casualty, Seller shall
immediately give notice to Purchaser of such fact and, at Purchaser's option (to
be exercised within thirty (30) days after Seller's notice), this Agreement
shall terminate, in which event neither party will have any further obligations
under this Agreement (other than the obligations set forth in Section 3(b) and
Article 13 hereof, which obligations shall survive any such termination) and the
Earnest Money shall be refunded to Purchaser provided Purchaser is not in breach
or default hereunder beyond any applicable grace or cure period. If Purchaser
fails to elect to terminate despite such damage, or if the Improvements are
damaged but not substantially, Seller shall promptly commence to repair such
damage or destruction and return the Improvements to substantially its condition
prior to such damage. If such damage shall be completely repaired prior to the
Closing Date then there shall be no reduction in the Purchase Price and Seller
shall retain the proceeds of all insurance related to such damage. If such
damage shall not be completely repaired prior to the Closing Date but Seller is
diligently proceeding to repair, then Seller shall complete the repair after the
Closing Date and shall be entitled to receive the proceeds of all insurance
related to such damage; provided, however, Purchaser shall have the right to
delay the Closing Date until repair is completed for a period not to exceed
thirty (30) days, and if any damage remains unrepaired at Closing, Seller shall
assign all of its right, title and interest in and to any insurance claims and
proceeds relating to such damage and shall deliver to Purchaser an amount equal
to any deductible portion of any applicable casualty insurance policy, and the
Purchase Price shall not be reduced. For purposes of this Section, the words
"substantially damaged" mean damage that would cost Seven Hundred Fifty Thousand
and 00/100 Dollars ($750,000.00) or more to repair.
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<PAGE>
12. CONDEMNATION. If, prior to the Closing Date, eminent domain
proceedings are commenced against all or any substantial part of the Subject
Property, Seller shall immediately give notice to Purchaser of such fact and, at
Purchaser's option (to be exercised within thirty (30) days after Seller's
notice), this Agreement shall terminate, in which event neither party will have
further obligations under this Agreement (other than the obligations set forth
in Section 3(b) and Article 13 hereof, which obligations shall survive any such
termination) and the Earnest Money shall be refunded to Purchaser provided
Purchaser is not in breach or default hereunder beyond any applicable grace or
cure period. If Purchaser shall fail to give such notice then there shall be no
reduction in the Purchase Price, and Seller shall assign to Purchaser at the
Closing Date all of Seller's right, title and interest in and to any award made
or to be made in the condemnation proceedings. Prior to the Closing Date,
Seller shall not designate counsel, appear in, or otherwise act with respect to
the condemnation proceedings without Purchaser's prior written consent, which
consent shall not be unreasonably withheld or delayed; provided, however, if any
action is necessary with respect to such proceeding to avoid any forfeiture or
material prejudice, Seller shall be entitled to take such action as and to the
extent necessary without obtaining Purchaser's prior written consent. For
purposes of this Section, the words "substantial part" mean the fair market
value of the portion of the Subject Property so taken exceeds Seventy Hundred
Fifty Thousand and 00/100 Dollars ($750,000.00).
13. BROKER'S COMMISSION. Seller represents and warrants to Purchaser that
in connection with the transaction contemplated hereby no third party broker or
finder has been engaged or consulted by Seller or is entitled to compensation or
commission in connection herewith other than LaSalle Partners Limited ("Seller's
Broker"). Seller shall be responsible for payment of the broker's commission
due and owing Seller's Broker. Seller shall defend, indemnify and hold harmless
Purchaser from and against any and all claims of brokers, finders of any like
third party claiming any right to commission or compensation by or through acts
of Seller in connection herewith. Purchaser represents and warrants to Seller
that in connection with the transaction contemplated hereby, no third party
broker or finder has been engaged or consulted by Purchaser or is entitled to
compensation or commission in connection herewith other than Seller's Broker.
Purchaser shall defend, indemnify and hold harmless Seller from and against any
and all claims of brokers, finders or any like party claiming any right to
commission or compensation by or through acts of Purchaser in connection
herewith other than Seller's Broker. The indemnity obligations hereunder shall
include all damages, losses, risks, liabilities, and expenses (including
reasonable attorneys' fees and costs) arising from and related to matters being
indemnified hereunder. Neither Seller's Broker nor any other broker, finder or
like party shall be entitled to rely (as a third party beneficiary or otherwise)
on the provisions herein in claiming any right to commission or compensation or
otherwise.
14. MUTUAL INDEMNIFICATION. Seller and Purchaser agree to indemnify each
other against, and hold each other harmless from all liabilities (including
reasonable attorneys' fees in defending against claims) arising out of the
ownership, operation or maintenance of the Subject Property for their respective
periods of ownership; provided, however, nothing herein shall diminish the
defense, indemnification and hold harmless obligations of Purchaser set forth in
Section 3(b) hereof with respect to matters arising from or related to the
Tests. If and to the extent that the indemnified party has insurance coverage,
or the right to make claim against any third party for any amount to be
indemnified against as set forth above, the indemnified party will, upon full
performance by the indemnifying party of its indemnification obligations, assign
such rights to the indemnifying party or, if such rights are not assignable, the
indemnified party will diligently pursue such rights by appropriate legal action
or proceeding and assign the recovery and/or right of recovery to the
indemnifying party to the extent of the indemnification payment made by such
party. The provisions of this paragraph shall survive Closing and execution and
delivery of the Special Warranty Deed, subject to the conditions and limitations
set forth in Section 6(b) of this Agreement.
15. ASSIGNMENT. Purchaser may not assign its rights under this Agreement
without the prior written consent of Seller; provided, however, Purchaser may
assign its rights under this Agreement to any trust, corporation, partnership or
limited liability company controlling, controlled by or under common control
with Purchaser. For purposes hereof, "control" shall mean ownership (directly
or indirectly) of 51% or more of the voting or other
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<PAGE>
comparable ownership interest of any such trust, corporation, partnership or
limited liability company. Any assignment shall be subject to all the
provisions, terms, covenants and conditions of this Agreement and the assignor
shall, in any event, continue to be and remain liable under this Agreement, as
it may be amended from time to time, as a principal and not as a surety without
notice to such assignor. Any such assignment and assumption shall be evidenced
by a written agreement in form and substance reasonably acceptable to Seller.
16. NOTICES. Any notice or other communication in connection with this
Agreement shall be in writing and shall be sent by United States Certified Mail,
return receipt requested, postage prepaid, by nationally recognized overnight
courier guarantee next day delivery, by telecopy, or by personal delivery,
properly addressed as follows:
If to Seller: Bradley Real Estate, Inc.
40 Skokie Boulevard, Suite 600
Northbrook, Illinois 60062-1626
Attn: Thomas P. D'Arcy
Facsimile No.: (847) 480-1893
With a copy to: Burke, Warren, MacKay & Serritella, P.C.
330 North Wabash Avenue
22nd Floor
Chicago, Illinois 60611-3607
Attn: D. Albert Daspin
Facsimile No.: (312) 840-7900
If to Purchaser: W9/ONS Real Estate Limited Partnership
c/o The Archon Group, L.P.
600 East Las Colinas Boulevard
Suite 1900
Irvine, Texas 75039
Attn: James W. Jones
Facsimile No.: (972) 830-7644
With a copy to: Arent Fox Kintner Plotkin & Kahn, PLLC
1050 Connecticut Avenue, NW
Washington, D.C. 20036-5339
Attn: Gerard Leval
Facsimile No.: (202) 857-6395
All notices shall be deemed given four (4) business days following
deposit in the United States mail with respect to certified or registered
letters, one (1) business day following deposit if delivered to an overnight
courier guaranteeing next day delivery and on the same day if sent by personal
delivery or telecopy (with proof of transmission). Attorneys for each party
shall be authorized to give notices for each such party. Any party may change
its address for the service of notice by giving written notice of such change to
the other party, in any manner above specified.
17. CAPTIONS. The paragraph headings or captions appearing in this
Agreement are for convenience only, are not a part of this Agreement, and are
not to be considered in interpreting this Agreement.
18. ENTIRE AGREEMENT; MODIFICATION. This Agreement constitutes the entire
agreement between the parties with respect to the subject matter herein
contained and all prior negotiations, discussions, writings and
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<PAGE>
agreements between the parties with respect to the subject matter herein
contained are superseded and of no further force and effect. No covenant, term
or condition of this Agreement shall be deemed to have been waived by either
party, unless such waiver is in writing signed by the party charged with such
waiver.
19. BINDING EFFECT. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and permitted
assigns.
20. CONTROLLING LAW. This Agreement shall be governed by and construed in
accordance and the laws of the State of Illinois.
21. SEVERABILITY. The unenforceability or invalidity of any provisions
hereof shall not render any other provision herein contained unenforceable or
invalid.
22. "AS IS" SALE. Purchaser acknowledges that except as set forth in
this Agreement and in the Closing documents executed by Seller (a) neither
Seller, nor any principal, agent, attorney, employee, broker, or other
representative of Seller, has made any representation or warranty of any kind
whatsoever, either express or implied, with respect to the Subject Property or
any matter related thereto, and (b) Purchaser is not relying on any warranty,
representation, or covenant, express or implied, with respect to the condition
of the Subject Property, and that Purchaser is acquiring the Subject Property in
its "as-is" condition with all faults. In particular, but without limitation,
except as set forth in this Agreement, Seller makes no representations or
warranties with respect to the use, condition, occupation or management of the
Subject Property, compliance of the Subject Property with applicable statutes,
laws, codes, ordinances, regulations or requirements or compliance of the
Subject Property with covenants, conditions, and restrictions, whether or not of
record.
23. TIME OF ESSENCE. Time is of the essence of this Agreement.
24. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
25. EXHIBITS. The following exhibits are made a part hereof, with the
same force and effect as if specifically set forth herein:
A Exhibit A - Legal Description
B Exhibit B - Personal Property
C Exhibit C Schedule of Leases
C-1 Exhibit C-1 Rent Roll
D Exhibit D - Schedule of Permits
E Exhibit E - Schedule of Service Contracts
F Exhibit F - Schedule of Warranties
G Exhibit G - Earnest Money Escrow
H Exhibit H - Permitted Encumbrances
I Exhibit I - Form of Tenant Estoppel Certificate
J Exhibit J - Pending Litigation
K Exhibit K - Labor Union Contracts
L Exhibit L - Memorandum of Purchase Agreement
M Exhibit M - Termination of Memorandum of Purchase Agreement
26. CONFIDENTIALITY. Until Closing, Purchaser shall keep all matters
concerning the documents and other information relating to the Property
confidential, provided Purchaser shall be allowed to disclose to its attorneys,
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<PAGE>
accountants, affiliates, advisors, financing sources and consultants such
documents and information as shall be reasonably necessary for Purchaser's
acquisition of the Property and/or in connection with legal requirements or
legal process. Purchaser shall direct its attorneys, accountants, affiliates,
advisors, financing sources and consultants to comply with this paragraph. If
this Agreement is terminated, Purchaser will return to Seller all documents and
information relating to the Property in its possession which were provided by
Seller or its agents. The provisions of this paragraph shall survive until the
earlier of (i) two (2) years following termination of this Agreement, and (ii)
Closing. Any press release or other media or related communication disclosing
the transaction contemplated by this Agreement shall require the prior written
consent of each party, not to be unreasonably withheld, delayed or conditioned.
27. LIKE-KIND EXCHANGE. Notwithstanding the provisions contained in this
Agreement relating to the sale of the Real Property, the parties acknowledge
that it is the desire and intention of Seller, if possible, to exchange the Real
Property for property of a like kind in an exchange qualifying as a tax-free
exchange under Section 1031 of the Internal Revenue Code of 1986. If requested
by Seller, Purchaser shall reasonably cooperate with Seller in attempting to
implement such exchange as hereinafter provided, at Seller's sole cost and
expense, in lieu of the sale provided for above, provided that such cooperation
shall be limited to (a) acknowledging and agreeing to the assignment by Seller
of all of its rights (but not its obligations) under this Agreement to a
qualified intermediary in a manner consistent with the provisions of Treasury
Regulations Sections 1.1031(k)-1(g)(4), (b) to paying the net Purchase Price
(after deposits to required escrowees and other adjustments provided hereunder)
in accordance with the joint directions of Seller and any such qualified
intermediary and (c) taking any other action as may otherwise be reasonably
required to effect such exchange and further provided that: (a) Purchaser incurs
no risk, liability, obligation, cost or expense associated with the exchange;
(b) the exchange does not affect or delay settlement of Purchaser's acquisition
of the Real Property as provided in this Agreement; (c) Seller hereby waives any
and all claims it may have against Purchaser resulting from the transaction
described in this Article 27 and agrees to indemnify and hold Purchaser harmless
from and against all liability arising out of its cooperation in effecting the
exchange as requested by Seller including, without limitation, any liability or
costs incurred by Purchaser arising from any tax proceedings or investigation
conducted in connection with the exchange; (d) if the terms regarding the
purchase of the exchange property provides for any financing other than the
payment of all costs, Purchaser shall have no liability for such financing; (e)
Purchaser shall not be required to take title to any exchange property; and (f)
any documentation required to be signed by Purchaser shall be delivered to
Purchaser and its counsel at least three (3) days prior to the Closing Date and
shall be in form and substance reasonably satisfactory to Purchaser. In the
event Seller elects to exchange the Real Property as set forth herein, any
exchange contract to be signed by Purchaser shall provide that the sole and
exclusive remedy of the seller of the exchange property shall be forfeiture of
any deposit which may be required thereunder. The parties hereto acknowledge
that Purchaser shall not be deemed Seller's agent in connection with said
exchange. All costs and expenses in connection with the acquisition or transfer
of any exchange property, including any deposit required by any exchange
property contract, shall be the obligation of Seller and all costs and expenses
incurred by Purchaser in conjunction with the acquisition of such exchange
property pursuant to the contact therefor and transferring same to Seller shall,
at Purchaser's sole option, either be (i) credited toward the Purchase Price
otherwise due Seller under this Agreement, or (ii) fully reimbursed to the
Purchaser (or if requested by Purchaser, advanced by Seller to Purchaser prior
to the time that Purchaser incurs, or becomes obligated to pay, such cost or
expense); provided, however, if Purchaser reasonably anticipates that attorneys'
fees and costs incurred by Purchaser in cooperating with any such like-kind
exchange transaction will exceed Two Thousand Five Hundred and 00/100 Dollars
($2,500.00), Purchaser shall immediately notify Seller, in writing, of the same,
and, anything herein to the contrary notwithstanding, Seller shall have no
liability for payment of Purchaser's attorneys' fees and costs in excess of Two
Thousand Five Hundred and 00/100 Dollars ($2,500.00) unless and until Seller has
notified Purchaser, in writing, that Seller shall pay any such excess attorneys'
fees and costs. If Seller fails to so notify Purchaser, in writing, Purchaser's
obligation to cooperate with Seller in effecting any such like-kind exchange
transaction shall terminate. In the event that for any reason exchange property
is not located or any transaction involving the acquisition by Seller or
exchange property is not consummated, Seller shall be obligated to consummate
settlement under this Agreement as fully and as effectively as if the provision
of this Article 27 were not set forth in this Agreement.
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<PAGE>
28. MEMORANDUM. Seller agrees that Purchaser may record a memorandum of
this Agreement in the form attached hereto and made a part hereof as Exhibit L,
---------
provided that Purchaser first deposits with the Title Company a termination of
such memorandum in the form attached hereto and made a part hereof as Exhibit M,
---------
which termination of memorandum shall be recorded if this Agreement is
terminated in accordance with conditions and limitations herein contained, and
such recordation shall be a condition precedent to a return of the Earnest Money
to Purchaser in circumstances where Purchaser is entitled to the same. Any and
all costs of recording the memorandum or the termination of memorandum shall be
borne by Purchaser.
[Signature Page Follows]
22
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
SELLER: PURCHASER:
BRADLEY FINANCING PARTNERSHIP, W9/ONS Real Estate Limited Partnership,
a Delaware general partnership a Delaware limited partnership
By: Bradley Operating Limited
Partnership
Its: General Partner By: W9/ONS Gen-Par, Inc.
Its: General Partner
By: Bradley Real Estate, Inc.,
a Delaware corporation
Its: General Partner By: /s/ Ronald Bernstein
---------------------------------
Its: Assistant Vice President
--------------------------------
By: /s/ Thomas P. D'Arcy
---------------------------------
Its: President
--------------------------------
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<PAGE>
FIRST AMENDMENT TO PURCHASE AGREEMENT
THIS FIRST AMENDMENT TO PURCHASE AGREEMENT ("First Amendment") is made as
of June 5, 1998, by and between Bradley Financing Partnership, a Delaware
general partnership ("Seller") and W9/ONS Real Estate Limited Partnership, a
Delaware limited partnership ("Purchaser").
RECITALS:
A. By that certain Purchase Agreement dated as of May 27, 1998
("Agreement") by and between Seller and Purchaser, Seller agreed to sell to
Purchaser and Purchaser agreed to purchase from Seller, all of Seller's right,
title and interest in and to the Subject Property, upon and subject to the terms
and conditions set forth in the Agreement.
B. Seller and Purchaser desire to amend and modify the Agreement in the
manner hereinafter set forth.
C. Unless otherwise provided herein, all capitalized words and terms used
in this First Amendment shall have the same meanings ascribed to such words and
terms as in the Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
hereinafter set forth and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, Seller and Purchaser hereby
agree as follows:
1. Section 2 of the Agreement is hereby amended, in part, in that the
Purchase Price shall be Eighty-Four Million Four Hundred Fifty-Two Thousand Four
Hundred and 00/100 Dollars ($84,452.400.00).
2. Concurrently herewith, Purchaser shall deposit the additional sum of
Five Hundred Thousand and 00/100 Dollars ($500,000.00) with the escrow
department of the Title Company, which sum shall form part of the Earnest Money.
3. Section 7(a) of the Agreement is hereby amended, in part, in that
Closing shall occur on or before August 1, 1998, and all references in the
Agreement to the Closing Date shall mean and refer to August 1, 1998.
4. Except as expressly provided in this First Amendment, all provisions
of the Agreement remain in full force and effect and are not modified by this
First Amendment, and the parties hereby ratify and confirm each and every
provision thereof.
5. Seller and Purchaser agree and acknowledge that the title and survey
matters set forth on Exhibit H attached hereto and made a part hereof shall
---------
constitute the Permitted Encumbrances.
6. This First Amendment may be executed in any number of counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
7. This First Amendment shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and permitted assigns under
the Agreement.
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<PAGE>
IN WITNESS WHEREOF, Seller and Purchaser have executed this First Amendment
as of the day and year first above written.
SELLER: PURCHASER:
BRADLEY FINANCING PARTNERSHIP, W9/ONS Real Estate Limited Partnership,
a Delaware general partnership a Delaware limited partnership
By: Bradley Operating Limited
Partnership
Its: General Partner By: W9/ONS Gen-Par, Inc.
Its: General Partner
By: Bradley Real Estate, Inc.,
a Delaware corporation By: /s/ Ronald Bernstein
Its: General Partner Its: Assistant Vice President
By: /s/ Thomas P. D'Arcy
Its: President
25
<PAGE>
EXHIBIT 4.1
ARTICLES OF MERGER
BETWEEN
MID-AMERICA REALTY INVESTMENTS, INC.
AND
BRADLEY REAL ESTATE, INC.
THIS IS TO CERTIFY THAT:
FIRST: Bradley Real Estate, Inc. and Mid-America Realty Investments, Inc.
-----
agree to merge in the manner hereinafter set forth.
SECOND: Bradley Real Estate, Inc. is the corporation to survive the
------
merger.
THIRD: Both Bradley Real Estate, Inc. (the "Surviving Corporation") and
-----
Mid-America Realty Investments, Inc. (the "Merging Corporation") are
incorporated under the laws of the State of Maryland.
FOURTH: The principal office of the Surviving Corporation in the State of
------
Maryland is located in Baltimore City and the principal office of the Merging
Corporation in the State of Maryland is located in Baltimore City.
FIFTH: The Merging Corporation owns no interest in land in the State of
-----
Maryland.
SIXTH: The charter of the Surviving Corporation will not be amended as a
-----
result of the merger.
SEVENTH: The total number of shares of all classes of stock which each
-------
corporation party to these Articles has the authority to issue and the number of
shares of each class are as follows:
a) Surviving Corporation
The total number of shares of all classes of stock which the Surviving
Corporation has authority to issue is one hundred fifty million
(150,000,000) shares, consisting of eighty million (80,000,000) shares of
common stock, par value $.01 per share, twenty million (20,000,000) shares
of preferred stock, par value $.01 per share, of which three million four
hundred eighty thousand two hundred and ten (3,480,210) shares have been
designated as 8.4% Series A Convertible Preferred Stock, par value $.01 per
share ("Series A Preferred Stock") and fifty million (50,000,000) shares of
excess stock, par value $.01 per share. The aggregate par value of all
shares of all classes having a par value is one million five hundred
thousand dollars ($1,500,000).
<PAGE>
b) Merging Corporation
The total number of shares of all classes of stock which the Merging
Corporation has authority to issue is twenty-five million (25,000,000)
shares of common stock, par value $.01 per share, and the Merging
Corporation has no authority to issue preferred stock. The aggregate par
value of all shares of all classes having a par value is two-hundred and
fifty thousand dollars ($250,000).
EIGHTH: Upon the Effective Time (as defined in Article Eleventh), the
------
Merging Corporation shall be merged with and into the Surviving Corporation and
the separate corporate existence of the Merging Corporation shall thereupon
cease. Each share of common stock, par value $.01 per share, of the Merging
Corporation shall be converted into the right to receive 0.42 of a share of
Series A Preferred Stock ("Common Stock") of the Surviving Corporation on the
Effective Time, without the necessity of any action on the part of the holder
thereof, except that fractional shares will be treated as described below.
No fractional shares of the Series A Preferred Stock of the Surviving
Corporation shall be issued. In lieu of the issuance of any fractional share of
Series A Preferred Stock of the Surviving Corporation, each holder of Common
Stock of the Merging Corporation 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 fraction of a share of Series A Preferred
Stock of the Surviving Corporation which such holder would otherwise be entitled
to receive by (ii) $25.00.
At the Effective Time, without any action on the part of the holder
thereof, all shares of Common Stock of the Merging Corporation, shall cease to
be outstanding, shall be canceled and retired and shall cease to exist and each
holder of a certificate representing any shares of the Common Stock of the
Merging Corporation shall thereafter cease to have any rights with respect to
such shares of Common Stock of the Merging Corporation, except the right to
receive, without interest, shares of Series A Preferred Stock of the Surviving
Corporation and cash in lieu of fractional shares of Preferred Stock of the
Surviving Corporation upon the surrender of such certificate. No dividends or
other distributions on the Series A Preferred Stock of the Surviving Corporation
paid with respect to any shares of the Common Stock of the Merging Corporation
represented by a Certificate shall be delivered to the holder of such
Certificate until such Certificate is surrendered for exchange. Following
surrender of such Certificate, such dividends or other distributions shall be
paid to such holder, without interest, less the amount of any withholding or
other applicable taxes which may be required thereon.
NINTH: The terms and conditions of the transaction described in these
-----
Articles were duly advised, authorized and approved by the Merging Corporation
in the manner and by the vote required by the laws of the State of Maryland and
the charter of the Merging Corporation, as follows:
2
<PAGE>
a) At a meeting of the Board of Directors of the Merging Corporation held
on May 30, 1998, the Board of Directors adopted a resolution declaring
that the terms and conditions of the transaction described herein were
advisable and in the best interests of the Merging Corporation and its
stockholders and directing that the proposed transaction be submitted
for consideration by the stockholders of the Merging Corporation and
such resolution is filed with the minutes of the proceedings of the
Board of Directors.
b) At a special meeting of stockholders of the Merging Corporation held on
August 5, 1998, the stockholders adopted a resolution approving the
terms and conditions of the transaction and of the Merger Agreement
described herein as so proposed and such resolution is filed with the
minutes of the proceedings of the stockholders.
TENTH: The terms and conditions of the transaction described in these
-----
Articles were duly advised, authorized and approved by the Surviving
Corporation, in the manner and by the vote required by the laws of the State of
Maryland and the charter of the Surviving Corporation, as follows:
a) At a special meeting of the Board of Directors of the Surviving
Corporation held on May 27, 1998, the Board of Directors adopted a
resolution (i) declaring that the merger between the Merging Corporation
and the Surviving Corporation, as contemplated by the Agreement and Plan
of Merger, is deemed to be in the best interests of the Surviving
Corporation and its stockholders and advisable on substantially all the
terms and conditions set forth in the Merger Agreement, and (ii)
approving such merger, and such resolution is filed with the minutes of
the proceedings of the Board of Directors.
ELEVENTH: These Articles of Merger shall become effective upon acceptance
--------
for record by the State Department of Assessments and Taxation of Maryland (the
"Effective Time").
TWELFTH: Each undersigned President acknowledges these Articles of Merger
-------
to be the corporate act of the respective corporate party on whose behalf he has
signed, and further, as to all matters or facts required to be verified under
oath, each President acknowledges that to the best of his knowledge, information
and belief, these matters and facts relating to the corporation on whose behalf
he has signed are true in all material respects and that this statement is made
under the penalties for perjury.
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<PAGE>
IN WITNESS WHEREOF, these Articles of Merger have been duly executed by the
parties hereto this 6th day of August, 1998.
ATTEST: MID-AMERICA REALTY INVESTMENTS, INC.
/s/ Jerome L. Heinrichs By: /s/ Dennis G. Gethmann (SEAL)
- --------------------------------------- -----------------------------
Jerome L. Heinrichs Dennis G. Gethmann
Secretary President
ATTEST: BRADLEY REAL ESTATE, INC.
/s/ William B. King By: /s/ Thomas P. D'Arcy (SEAL)
- --------------------------------------- -----------------------------
William B. King Thomas P. D'Arcy
Secretary President
4
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EXHIBIT 10.1
BRADLEY OPERATING LIMITED PARTNERSHIP
AMENDMENT TO SECOND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
ESTABLISHING AND FIXING THE RIGHTS, LIMITATIONS AND PREFERENCES OF
8.4% SERIES A CONVERTIBLE PREFERRED UNITS
This Amendment to the Second Restated Agreement of Limited Partnership of
Bradley Operating Limited Partnership, a Delaware limited partnership (the
"Partnership"), dated August 6, 1998 (this "Amendment") amends the Second
Restated Agreement of Limited Partnership of the Partnership, dated September 2,
1997, as amended, by and among Bradley Real Estate, Inc. (the "General Partner")
and each of the limited partners executing a signature page thereto (the
"Partnership Agreement"). Capitalized terms used herein and not defined herein
have the meanings ascribed thereto in the Partnership Agreement. Section
references are (unless otherwise specified) references to sections in this
Amendment.
WHEREAS, pursuant to Section 3.1.C of the Partnership Agreement, the
General Partner desires to cause the Partnership to issue additional Units of a
new class and series, with the designations, preferences and relative,
participating, optional or other special rights, powers and duties set forth
herein; and
WHEREAS, such new class and series of Units shall be issued to the General
Partner in connection with the issuance by the General Partner of shares of 8.4%
Series A Convertible Preferred Stock, par value $.01 per share ("Series A
Preferred Stock"), to the stockholders of Mid-America Realty Investments, Inc.
("MDI") at the effective time of the merger of MDI with and into the General
Partner, and such shares of Series A Preferred Stock have designations,
preferences and other rights such that the economic interests attributable to
such shares are substantially similar to the designations, preferences and other
rights of the new class and series of Units issued hereby; and
WHEREAS, the General Partner is making a Capital Contribution to the
Partnership in an amount equal to the Net Proceeds raised in connection with the
issuance of the 8.4% Series A Convertible Preferred Stock; and
WHEREAS, pursuant to Section 17.1 of the Partnership Agreement, the General
Partner, without the consent of the Limited Partners, may amend the Partnership
Agreement by executing a written instrument setting forth the terms of such
amendment; and
WHEREAS, the General Partner desires by this Amendment to so amend the
Partnership Agreement as of the date first set forth above to provide for the
designation and issuance of such new class and series of Units.
<PAGE>
NOW THEREFORE, the Partnership Agreement is hereby amended by establishing
and fixing the rights, limitations and preferences of a new class and series of
Units as follows:
1. Designation, Amount and Ranking.
-------------------------------
Pursuant to Section 3.1.C of the Partnership Agreement, a class and series
of Preferred Units, designated "8.4% Series A Convertible Preferred Units," is
hereby established (the "Series A Preferred Units"). The aggregate number of
Series A Preferred Units shall be 3,480,210, all of which are hereby issued to
the General Partner. The General Partner is authorized to issue on behalf of
the Partnership one or more Unit Certificates which evidence ownership of the
Series A Preferred Units in accordance with Section 3.1.A of the Partnership
Agreement.
The Series A Preferred Units shall, with respect to distribution rights and
rights upon liquidation, dissolution or winding up of the Partnership, rank (a)
senior to all Units (whether General Partner Units or Limited Partner Units)
outstanding prior to the date hereof and all units of the same class or series
as such previously outstanding Units (hereinafter referred to collectively as,
"Common Units"), and to all classes or series of Units the terms of which
specifically provide that such Units rank junior to such Series A Preferred
Units; (b) on parity with all classes or series of Units issued by the
Partnership the terms of which specifically provide that such Units rank on a
parity with the Series A Preferred Units; and (c) junior to all other classes or
series of Units issued by the Partnership.
2. Distribution Rights.
-------------------
(a) The holder of the outstanding Series A Preferred Units shall be
entitled to receive, when, as and if authorized by the General Partner, out of
funds legally available therefor, cash distributions of Operating Cash Flow and
Capital Cash Flow which are (1) cumulative, (2) preferential to the
distributions paid on the Partnership's Common Units and (3) payable quarterly
in arrears at the rate of 8.4% of the $25.00 liquidation preference per annum
(equivalent to a fixed quarterly amount of $.525 per Series A Preferred Unit)
(the "Distribution Amount") and no more, on the same day as the payment date for
dividends declared by the General Partner on the Series A Preferred Stock (each,
a "Distribution Payment Date"). Each calendar quarter immediately preceding the
Distribution Payment Date (or if the date of original issuance of the Series A
Preferred Units (the "Original Issue Date") is not on the first day of a
calendar quarter, the period beginning on the date of issuance and ending on the
Distribution Payment Date) is referred to hereinafter as a "Distribution
Period." The General Partner may not authorize, declare or pay any distribution
on the Series A Preferred Stock with respect to any period unless it has
authorized, declared and paid a dividend payable by it in the same amount on the
Series A Preferred Stock with respect to the same Distribution Period.
Distributions will be payable to the holder of record with respect to that
number of Series A Preferred Units outstanding on the records of the Partnership
at the close of business on the applicable record date, which shall be the same
day as the record date for any distribution payable by the General Partner on
the Series A Preferred Stock with respect to the same period (each, a
"Distribution Record Date"). Notwithstanding anything in the terms of the
Series A Preferred Units to the contrary, the Distribution Amount for the
2
<PAGE>
initial Distribution Period and, if applicable, for the next succeeding
Distribution Period(s) shall be reduced in the aggregate by the amount
(calculated to the nearest one-tenth of one cent) obtained by (x) dividing (i)
the amount of the "Merger Dividend," if any, paid to the holders of common
stock, par value $.01 per share of MDI, prior to its merger with and into the
General Partner by (ii) the number of shares of such common stock of MDI with
respect to which the Merger Dividend was paid and (y) dividing (i) the quotient
so obtained by (ii) the Exchange Ratio. For the purposes of the preceding
sentence, the Merger Dividend shall have the meaning set forth in Section
7.14(b) of the Agreement and Plan of Merger dated as of May 30, 1998 by and
between MDI and the General Partner, as amended from time to time (the "Merger
Agreement"), and the Exchange Ratio shall be 0.42 (or such other amount as is
provided in Section 4.1(b) of the Merger Agreement).
(b) No distributions on Series A Preferred Units shall be authorized
by the General Partner or paid or set apart for payment by the Partnership at
any such time as the terms and provisions of any agreement of the Partnership or
the General Partner, including any agreement relating to their indebtedness,
prohibits such authorization, payment or setting apart for payment or provides
that such authorization, payment or setting apart for payment would constitute a
breach thereof or a default thereunder, or to the extent that such authorization
or payment shall be restricted or prohibited by law.
(c) Notwithstanding the foregoing, distributions on the Series A
Preferred Units shall accrue whether or not the terms and provisions set forth
in Section 2(b) hereof at any time prohibit the current payment of
distributions, whether or not the Partnership has earnings, whether or not there
are funds legally available for the payment of such distributions and whether or
not such distributions are declared. Accrued but unpaid distributions on the
Series A Preferred Units will accumulate as of the Distribution Payment Date on
which they first become payable.
(d) The Partnership shall not (i) declare or pay or set apart for
payment any distributions on any Units ranking as to distributions junior to the
Series A Preferred Units (other than distributions paid by issue or delivery of
such junior Units) or (ii) make any purchase or redemption of, or any sinking
fund payment for the purchase or redemption of, any Units ranking as to
distributions junior to the Series A Preferred Units (other than a purchase or
redemption made by issue or delivery of such junior Units) unless all
distributions payable on all outstanding Series A Preferred Units for all past
Distribution Periods shall have been paid in full or declared and a sufficient
sum set apart for payment thereof; provided, however, that any moneys
-------- -------
theretofore deposited in any sinking fund with respect to any Preferred Units of
the Partnership in compliance with the provisions of such sinking fund may
thereafter be applied to the purchase or redemption of such Preferred Units in
accordance with the terms of such sinking fund.
(e) All distributions declared on any other class of Preferred Units
or series thereof ranking on a parity as to distributions with the Series A
Preferred Units shall be declared pro rata, so that the amounts of distributions
declared per Series A Preferred Unit for
3
<PAGE>
the Distribution Period of the Series A Preferred Units ending either on the
same day or within the distribution period of such other class or series of
Units, shall, in all cases, bear to each other the same ratio that accrued
distributions per Series A Preferred Unit and such other class or series of
Units bear to each other.
(f) Any distribution payment made on the Series A Preferred Units
shall first be credited against the earliest accrued but unpaid distribution due
with respect to such Series A Preferred Units which remains payable. Holders of
the Series A Preferred Units shall not be entitled to any distribution, whether
payable in cash, property or Units, in excess of full cumulative distributions
on the Series A Preferred Units as described above.
3. Liquidation Rights.
------------------
(a) Subject to any prior rights of any class or series of Units, in
the event of any liquidation, dissolution, or winding up of the Partnership,
either voluntary or involuntary and whether or not in connection with the
liquidation of the Bradley Group, the holder of all Series A Preferred Units
then outstanding shall be entitled to receive out of the assets of the
Partnership legally available for distribution, on a prior basis and in
preference to any distribution of any of the assets or surplus funds of the
Partnership to the holders of Common Units by reason of their ownership of such
Units, a liquidation preference of $25.00 per Series A Preferred Unit, plus an
amount equal to all accrued but unpaid distributions as determined in accordance
with Section 2(c) for each Series A Preferred Unit then held by it. If, upon
the occurrence of such event, the assets and funds thus distributed to the
holder of the Series A Preferred Units shall be insufficient to permit the
payment to it and the holders of any other class or series of Units on parity
with the Series A Preferred Units of the full aforesaid amounts to which they
are entitled, then, subject to any prior rights of any classes or series of
Units, the entire assets and funds of the Partnership legally available for
distribution shall be distributed ratably to the holders of Series A Preferred
Units and any other Units on a parity for liquidation purposes in proportion to
the aggregate amounts to which each such holder would otherwise be respectively
entitled.
(b) After payment of the full amount of the liquidating distributions
to which it is entitled pursuant to Section 3(a) hereof, the holder of Series A
Preferred Units will have no right or claim to any of the remaining assets of
the Partnership arising from its ownership of such Series A Preferred Units (it
being understood that such holder may have additional rights or claims to the
remaining assets of the Partnership as a result of its ownership of Units of
other classes or series or its status as General Partner.)
(c) The consolidation or merger of the Partnership or the General
Partner with or into any other corporation, partnership, limited liability
company, trust or other entity or of any other corporation, partnership, limited
liability company, trust or other entity with or into the Partnership or the
General Partner, or the sale, lease, transfer or conveyance of all or
substantially all of the property or business of the Partnership or the General
Partner or a statutory share exchange, shall not be deemed to constitute a
liquidation, dissolution or winding up of the Partnership.
4
<PAGE>
4. Conversion.
----------
4.1 Mandatory Conversion.
--------------------
At any time that any outstanding shares of Series A Preferred Stock of the
General Partner are converted into shares of common stock, par value $.01 per
share, of the General Partner ("Common Stock") pursuant to the terms thereof, a
like number of Series A Preferred Units shall be converted (without taking into
account any accumulated, accrued but unpaid distributions) into Common Units as
follows: the number of Common Units to which a holder of Series A Preferred
Units shall be entitled to receive upon conversion shall be the product obtained
by multiplying the Conversion Rate (as defined below) by the number of Series A
Preferred Units being converted at such time. The Conversion Rate shall be the
quotient obtained by dividing $25.00 by the Conversion Price. The Conversion
Price shall, except as adjusted pursuant to Section 4.4 below, be $24.49. Any
Series A Preferred Units which have been called for redemption pursuant to
Section 5 hereof may be converted at any time prior to the close of business on
the Series A Preferred Redemption Date (as defined in Section 5(a)); provided,
--------
however, that such Series A Preferred Units may be converted after such date if
- -------
the Partnership shall default in making payment of any cash payable upon such
redemption under Section 5 hereof.
4.2 Procedure for Conversion.
------------------------
Upon conversion of any shares of Series A Preferred Stock into Common
Stock, the holder of Series A Preferred Units shall surrender the certificate(s)
therefor, at the principal offices of the Partnership, or at such other office
as may be designated by the Partnership for notation that a like number of
Series A Preferred Units have been converted or alternatively for cancellation
upon delivery to the holder of a replacement certificate representing the
balance of the Series A Preferred Units not converted. As soon as practicable
after a conversion of Series A Preferred Stock, the Partnership shall issue and
deliver at said office a certificate or certificates for the whole number of
Common Units issuable upon conversion of the Series A Preferred Units duly
surrendered for conversion to such holder if the Common Units are represented by
certificates at such time. The Series A Preferred Units shall be deemed to have
been converted at the same date and time as the corresponding shares of Series A
Preferred Stock are converted into Common Stock, and the holder entitled to
receive the Common Units issuable upon such conversion shall be deemed for all
purposes as record holder of such Common Units as of the close of business on
such date (hereinafter, the "Conversion Date").
The holder of Series A Preferred Units at the close of business on a
Distribution Record Date shall be entitled to receive the distribution payable
on such Series A Preferred Units on the corresponding Distribution Payment Date
notwithstanding the conversion thereof following such Distribution Record Date
and prior to such Distribution Payment Date. Except as provided above, the
Partnership shall make no payment or allowances for unpaid distributions,
whether or not in arrears, on converted Series A Preferred Units or for
distributions on the Common Units issued upon such conversion.
5
<PAGE>
4.3 No Fractional Units.
-------------------
No fractional Common Units shall be issued upon conversion of the Series A
Preferred Units into Common Units, and, in lieu thereof, the Partnership shall
pay a cash adjustment in an amount equal to the same fraction of the last sale
price (or bid price if there were no sales) per share of Common Stock on the New
York Stock Exchange on the business day which immediately precedes the
Conversion Date or, if such Common Stock is not then listed on the New York
Stock Exchange, of the market price per share (as determined in a manner
prescribed by the General Partner) at the close of business on the business day
which immediately precedes the Conversion Date.
4.4 Adjustments; Change in Control Transactions.
-------------------------------------------
(a) In the event the General Partner shall at any time (i) pay a
dividend or make a distribution to holders of Common Stock in shares of Common
Stock, (ii) subdivide its outstanding shares of Common Stock into a larger
number of shares, or (iii) combine its outstanding shares of Common Stock into a
smaller number of shares, the Conversion Price shall be adjusted by multiplying
the Conversion Price by a fraction, the denominator of which shall be the number
of shares of Common Stock outstanding immediately after such dividend,
distribution, subdivision or combination and the numerator of which shall be the
number of shares of Common Stock outstanding immediately prior to such dividend,
distribution, subdivision or combination. An adjustment made pursuant to this
subparagraph (a) shall become effective immediately upon the opening of business
on the day next following the record date in the case of a dividend or
distribution (except as provided in paragraph (h) of this Section 4.4 below) and
shall become effective immediately upon the opening of business on the day next
following the effective date in the case of a subdivision, combination or
reclassification.
(b) In the event the General Partner shall at any time distribute to
all holders of its Common Stock (i) any rights or warrants to subscribe for or
purchase any security of the General Partner (excluding those rights and
warrants issued to all holders of Common Stock entitling them for a period
expiring within 45 days after the record date referred to in subparagraph (c)
below to subscribe for or purchase Common Stock, which rights and warrants are
referred to in and treated under subparagraph (c) below), or any evidence of
indebtedness or other securities of the General Partner (other than Common
Stock) or (ii) cash or other assets (excluding cash dividends or distributions
in an amount not in excess of the greater of either (x) with respect to all cash
dividends or distributions paid on Common Stock after December 31, 1997, the
cumulative amount of funds from operations reported for the General Partner
after December 31, 1997, or (y) with respect to cash dividends or distributions
paid on Common Stock for any fiscal year, the taxable income as reflected on the
General Partner's federal income tax return on Form 1120 REIT (or successor
form) for such fiscal year), then in each such case the Conversion Price shall
be adjusted so that the same shall equal the price determined by multiplying the
Conversion Price in effect immediately prior to the close of business on the
record date for the determination of the Stockholders entitled to
6
<PAGE>
receive such distribution by a fraction, the denominator of which shall be the
Fair Market Value (as defined in Section 4.4(g)) of the Common Stock and the
numerator of which shall be the Fair Market Value of the Common Stock less the
then fair market value (as determined in good faith by the Board of Directors of
the General Partner or a duly authorized committee thereof, which determination
shall be conclusive) of the portion of the rights, warrants, evidence of
indebtedness or other securities, cash or other assets so distributed applicable
to one share of Common Stock. Such adjustment shall become effective immediately
upon the opening of business on the day next following the record date for the
determination of stockholders entitled to receive such distribution.
(c) In the event the General Partner shall at any time issue rights,
options or warrants to all holders of Common Stock entitling them (for a period
expiring within 45 days after the record date mentioned below) to subscribe for
or purchase Common Stock at a price per share less than the Fair Market Value of
Common Stock on the record date for the determination of stockholders entitled
to receive such rights, options or warrants, then the Conversion Price shall be
adjusted so that the same shall equal the price determined by multiplying the
Conversion Price in effect immediately prior to the close of business on such
record date by a fraction, the numerator of which shall be the sum of (i) the
number of shares of Common Stock outstanding on the close of business on such
record date and (ii) the number of shares of Common Stock that the aggregate
proceeds to the General Partner from the exercise of such rights, options or
warrants for shares of Common Stock would purchase at the Fair Market Value and
the denominator of which will be the sum of number of shares of Common Stock
outstanding on the close of business on such record date and the number of
additional shares of Common Stock offered for subscription or purchase pursuant
to such rights, options or warrants. Such adjustment shall become effective
immediately upon the opening of business on the day next following the record
date for the determination of stockholders entitled to receive such rights,
options or warrants.
(d) Whenever the Conversion Price shall be adjusted as herein
provided, the Partnership shall cause to be filed with the records of the
Partnership a notation that the Conversion Price has been adjusted and setting
forth the adjusted Conversion Price, together with an explanation of the
calculation of the same.
(e) No adjustment in the Conversion Price shall be required unless
such adjustment would require a cumulative increase or decrease of at least 1%
in such price; provided, however, that any adjustment that by reason of this
-------- -------
subparagraph (e) is not required to be made shall be carried forward and taken
into account in any subsequent adjustment until made; and provided, further,
-------- -------
that any adjustment shall be required and made in accordance with the provisions
of this Section 4.4 (other than this subparagraph (e)) not later than such time
as may be required in order to preserve the tax-free nature of a distribution to
the holders of Common Units. Notwithstanding any other provisions of this
Section 4.4, the Partnership shall not be required to make any adjustment of the
Conversion Price for the issuance of any Common Stock in connection with the
issuance of Common Stock pursuant to any plan providing for the reinvestment of
dividends or interest payable on securities of the General
7
<PAGE>
Partner and the investment of additional optional amounts in shares of Common
Stock under such plan. All calculations under this Section 4.4 shall be made to
the nearest cent with $.005 being rounded upward or to the nearest one-tenth of
a share (with .05 of a share being rounded upward), as the case may be. Anything
in this Section 4.4 to the contrary notwithstanding, the General Partner shall
be entitled, to the extent permitted by law, to make such reductions in the
Conversion Price, in addition to those required by this Section 4.4, as in its
discretion, it shall determine to be advisable in order that any stock
dividends, subdivision of shares, reclassification or combination of shares,
distribution of rights, options or warrants to purchase stock or securities, or
a distribution of other assets (other than cash dividends) hereafter made by the
General Partner to its stockholders shall not be taxable.
(f) If the General Partner shall be party to, or shall have entered
into an agreement for, any transaction (including, without limitation, a merger,
consolidation, statutory share exchange or sale of all or substantially all of
its assets), in each case as a result of which shares of Common Stock generally
shall be converted into the right to receive stock, securities or other property
(including cash or any combination thereof) (a "Transaction"), the Series A
Preferred Units shall, in connection with such Transaction, convert into the
number of Common Units issuable upon conversion of such Series A Preferred Unit
immediately prior to the consummation of such Transaction.
(g) For the purposes of this Section 4.4, "Fair Market Value" shall
mean the average of the last reported sale price (or bid price if there were no
sales) per share of Common Stock as reported on the New York Stock Exchange (or
such other national securities exchange or NASDAQ National Market on which the
Common Stock is traded at the time of such computation) during 5 consecutive
trading days selected by the General Partner commencing not more than 20 trading
days before, and ending not later than the day immediately prior to the "ex"
date with respect to the issuance or distribution requiring such computation.
The term "'ex' date," when used with respect to any issuance or distribution,
means the first day on which the Common Stock trades regular way, without the
right to receive such issuance or distribution, on the exchange or in the
market, as the case may be, used to determine the Fair Market Value. In the
event that, at any time, the Common Stock is not then traded on a national
securities exchange or the NASDAQ National Market then "Fair Market Value" shall
be determined in good faith by the Board of Directors of the General Partner.
(h) In any case in which this Section 4.4 provides that an adjustment
shall become effective on the date next following the record date for an event,
the General Partner may defer until the occurrence of such event (A) issuing to
the holder of Series A Preferred Units converted after such record date and
before the occurrence of such event the additional Common Units issuable upon
such conversion by reason of the adjustment required by such event over and
above the Common Units issuable upon such conversion before giving effect to
such adjustment and (B) fractionalizing any Series A Preferred Units and/or
paying to such holder any amount of cash in lieu of any fraction pursuant to
Section 4.3. Any adjustment of the Conversion Price in accordance with either
paragraph (b) or (c) of this Section 4.4 shall be
8
<PAGE>
disregarded if, as, and when the rights to acquire Common Units upon exercise or
conversion of the rights, warrants or options which give rise to such adjustment
expire or are canceled without having been exercised, so that the Conversion
Price effective immediately upon such cancellation or expiration shall be equal
to the Conversion Price in effect immediately prior to the time of the issuance
of the expired or cancelled rights, warrants or options, with such additional
adjustments as would have been made to the Conversion Price had the expired or
cancelled rights, warrants or options never been issued.
(i) There shall be no adjustment of the Conversion Price in case of
the issuance of any shares of Common Stock in a reorganization, acquisition or
other similar transaction except as specifically set forth in this Section 4.4.
If any action or transaction would require adjustment of the Conversion Price
pursuant to more than one paragraph of this Section 4.4, only one adjustment
shall be made, and such adjustment shall be the amount of adjustment that has
the highest absolute value. Notwithstanding anything in this Section 4.4 to the
contrary, no adjustment shall be made to the Conversion Price as a result of the
issuance of rights by the General Partner in connection with the establishment
of a shareholder rights plan (or other comparable plan) so long as the terms of
such plan provide that such rights will attach to the shares of Common Stock
into which the Series A Preferred Stock may be converted at the time of such
conversion.
5. Redemption.
----------
(a) At such time or times as the General Partner exercises its right,
in its sole and absolute discretion, to redeem the outstanding shares of Series
A Preferred Stock and such shares are in fact redeemed, the General Partner
shall cause the Partnership to redeem all of the outstanding Series A Preferred
Units. This redemption shall become effective, without any further action by
the General Partner or the Partnership, on the date and at the time that the
redemption of the Series A Preferred Stock by the General Partner becomes
effective (such date being referred to as the "Series A Preferred Redemption
Date").
(b) On a Series A Redemption Date, each Series A Preferred Unit so
redeemed shall be redeemed in cash or immediately available funds at a price per
Series A Preferred Unit equal to $25.00, plus all accrued but unpaid
distributions (such amount being referred to as the "Series A Preferred
Redemption Amount").
(c) In the event that the funds of the Partnership legally available
for redemption of the Series A Preferred Units on any Series A Preferred
Redemption Date are insufficient to redeem the number of Series A Preferred
Units to be so redeemed on such date, the Partnership shall in good faith use
reasonable efforts as expeditiously as possible to eliminate, or obtain an
exception, waiver or exemption from, any and all restrictions under applicable
law that prevented the Partnership from redeeming all of the Series A Preferred
Units to be redeemed hereunder. At any time thereafter when additional funds of
the Partnership are legally available for the redemption of Series A Preferred
Units, such funds will be used to redeem the balance of such Series A Preferred
Units, or such portion thereof
9
<PAGE>
for which funds are available. If any Series A Preferred Units are not redeemed
for the foregoing reason or because the Partnership otherwise failed to pay or
tender to pay the aggregate Series A Preferred Redemption Amount on the Series A
Preferred Units required to be redeemed, all Series A Preferred Units which have
not been redeemed shall remain outstanding and entitled to all the rights and
preferences provided herein.
(d) Upon receipt of payment of the Series A Preferred Redemption
Amount, the holder of the Series A Preferred Units to be redeemed shall
surrender the certificate or certificates representing such Series A Preferred
Units to the Partnership for notation or cancellation consistent with the
provision of Section 4.2(e) hereof.
(e) Notwithstanding anything in this Section 5 to the contrary, no
Series A Preferred Units may be redeemed except from proceeds from the sale of
equity securities of the General Partner (other than the Series A Preferred
Stock), including, but not limited to, shares of Common Stock, shares of
preferred stock, depositary shares, interests, participation or other ownership
interests (however designated) and any rights (other than debt securities
convertible into or exchangeable for equity securities) or options to purchase
any of the foregoing, and which proceeds are contributed as a Capital
Contribution to the Partnership by the General Partner in accordance with the
terms of the Partnership Agreement.
6. Voting and Consent Rights; Amendment of Terms.
---------------------------------------------
(a) The holder of Series A Preferred Units shall have the right, with
the holders of Common Units and any other Units authorized, to vote upon or
consent to each matter on which the holders of Common Units are entitled to vote
or consent, on the basis of one vote or consent for each Common Unit into which
the Series A Preferred Units held by such holder are then convertible (rounded
to the nearest whole number of Units). The holders of Series A Preferred Units
and Common Units shall vote together as one class except as otherwise set forth
herein.
(b) Notwithstanding Section 17.1 of the Partnership Agreement, so long
as any Series A Preferred Units remain outstanding, the General Partner may not
amend the terms of the Series A Preferred Units to affect materially and
adversely the rights, preferences, privileges or voting power of the Series A
Preferred Units unless the terms of the Series A Preferred Stock of the General
Partner are similarly amended and an amendment to these terms of the Series A
Preferred Units is necessary so that the economic interests of the Series A
Preferred Stock and the Series A Preferred Units remain substantially similar.
For purposes of the foregoing and without limitation of the foregoing, (i) the
increase or decrease in the amount of authorized Units of any class or series
including the Series A Preferred Units, (ii) the creation of a new class or
series of Units having rights, preferences, privileges or voting power senior
to, on a parity with or junior to the rights, preferences or privileges of the
Series A Preferred Units in the distribution of assets on any liquidation,
dissolution or winding up of the Partnership and/or in the payment of dividends
and (iii) the entering into of any agreement providing for the actions in (i) or
(ii) above and the taking of any actions in connection with
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the consummation of any such agreement shall not be deemed to materially and
adversely affect the rights, preferences, privileges or voting power of the
Series A Preferred Units, and the General Partner may amend the terms of the
Series A Preferred Units as it deems advisable, in its sole and absolute
discretion, to reflect such actions. Notwithstanding anything in the terms of
the Series A Preferred Units to the contrary, the holder of Series A Preferred
Units is not entitled to vote or consent as a single class on (i) any
Transaction (as defined in Section 4.4(f), (ii) any transaction (including,
without limitation, a merger, consolidation, statutory share exchange or sale of
all or substantially all of its assets) in which the General Partner or the
Partnership would be the surviving entity (an "Acquisition Transaction"), or
(iii) on any other matter except as specifically provided in this Section 6,
irrespective of the effect such Transaction, Acquisition Transaction, or other
matter may have on the rights, preferences, privileges or voting power of the
Series A Preferred Units
7. No Preemptive or Other Rights.
-----------------------------
The holder of Series A Preferred Units shall have no preemptive rights,
including preemptive rights with respect to any Units or other Partnership
Interest of the Partnership convertible into or carrying rights or options to
purchase any such Series A Preferred Units.
8. Exhibit A to Partnership Agreement.
----------------------------------
In order to duly reflect the issuance of the Series A Preferred Units
provided for herein, the Partnership Agreement is hereby further amended
pursuant to Section 12.3 thereof by deleting Exhibit A thereto and replacing
---------
Exhibit A attached hereto therefor.
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11
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IN WITNESS WHEREOF, this Amendment has been executed as of the date first
above written.
BRADLEY REAL ESTATE, INC.
By: /s/ Thomas P. D'Arcy
------------------------------------------
Thomas P. D'Arcy
Chairman, President and Chief Executive Officer
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EXHIBIT 99.1
NEWS
BULLETIN BRADLEY REAL ESTATE, INC.
40 SKOKIE BLVD., SUITE 600
FROM: NORTHBROOK, IL 60062-1626
NYSE: BTR
FRB
- --------------------------------------------------------------------------------
The Financial Relations Board, Inc.
FOR FURTHER INFORMATION:
AT THE COMPANY: AT THE FINANCIAL RELATIONS BOARD:
THOMAS P. D'ARCY DENNIS WAITE
CHAIRMAN AND CEO SENIOR COUNSELOR
(847) 272-9800 (312) 640-6674
FOR IMMEDIATE RELEASE
THURSDAY, AUGUST 6, 1998
BRADLEY REAL ESTATE COMPLETES ACQUISITION OF
MID-AMERICA REALTY INVESTMENTS, INC.
NORTHBROOK, ILL., AUGUST 6, 1998--BRADLEY REAL ESTATE, INC. (NYSE:BTR) today
announced that it has completed the acquisition of Mid-America Realty
Investments, Inc. The merger was approved by share owners of Mid-America Realty
Investments, Inc. on August 5, 1998. A vote by Bradley share owners was not
required. As provided in the merger agreement, each share of Mid-America Realty
Investments common stock was exchanged for 0.42 shares 8.4% Series A Convertible
Preferred Stock of Bradley Real Estate, Inc. with a liquidation preference of
$25.00 per share. The 8.4 percent Series A Convertible Preferred Stock will be
traded on the NYSE commencing at the opening on August 7, 1998, under the symbol
"BTRPrA" and is convertible into Bradley common stock at any time at a price of
$24.49.
Thomas P. D'Arcy, chairman and chief executive officer of Bradley, commented,
"We are pleased to have completed this transaction on schedule and believe it to
be a very positive event for both share owner groups. As we have previously
stated, this acquisition represents an excellent strategic fit and a further
step in Bradley's continued consolidation of grocery-anchored shopping centers
in the Midwest. This acquisition, comprising 25 shopping centers totaling 3.2
million square feet, when coupled with our recently completed sale of our
<PAGE>
One North State Street building, improves the quality and diversity of our
earnings stream and further enhances our platform for continued growth."
The preceding information contains forward-looking statements of the company's
plans, objectives and expectations, which are dependent upon a number of factors
including a stable retailing climate in the Midwestern United States, the
financial viability of the company's tenants and the continuing availability of
retail center acquisitions and development opportunities in the Midwest on
favorable terms. Reference is made to the discussions under the captions "Risk
Factors" in the company's 1997 Form 10-K report which includes a discussion of
certain other factors which could cause actual results to differ materially from
those in forward-looking statements.
Bradley Real Estate, Inc. is the nation's oldest real estate investment trust
(REIT) and a leading owner and operator of neighborhood and community shopping
centers located in the Midwest region of the United States. The company has
paid 148 consecutive quarterly distributions to its share owners, one of the
longest records of distributions among publicly traded REITs. With this
acquisition, the company now owns 90 properties located in 15 states aggregating
14.4 million square feet of rentable space.
TO RECEIVE ADDITIONAL INFORMATION ON BRADLEY REAL ESTATE FREE OF CHARGE VIA FAX,
DIAL 1-800-PRO-INFO AND ENTER "BTR."
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