-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, DUNc/TDgrCGMQQ+1cNR9QXcjF342ss/8t2uBJSdH/CK01poiogx2DafQvniWdwDZ S9YmHMh2rhMiFHEOYLiWLA== 0000950123-01-002529.txt : 20010323 0000950123-01-002529.hdr.sgml : 20010323 ACCESSION NUMBER: 0000950123-01-002529 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 6 CONFORMED PERIOD OF REPORT: 20010322 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 20010322 FILER: COMPANY DATA: COMPANY CONFORMED NAME: FIRST UNION REAL ESTATE EQUITY & MORTGAGE INVESTMENTS CENTRAL INDEX KEY: 0000037008 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE INVESTMENT TRUSTS [6798] IRS NUMBER: 346513657 STATE OF INCORPORATION: OH FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 001-06249 FILM NUMBER: 1576065 BUSINESS ADDRESS: STREET 1: 551 FIFTH AVE STREET 2: STE 1416 CITY: NEW YORK STATE: NY ZIP: 10176 BUSINESS PHONE: 2129051104 MAIL ADDRESS: STREET 1: 551 FIFTH AVE STREET 2: SUITE 1416 CITY: NEW YORK STATE: NY ZIP: 10176 FORMER COMPANY: FORMER CONFORMED NAME: FIRST UNION REALTY DATE OF NAME CHANGE: 19691012 8-K 1 y46866e8-k.txt FORM 8-K 1 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 March 22, 2001 First Union Real Estate Equity and Mortgage Investments - -------------------------------------------------------------------------------- (Exact name of Registrant as Specified in Its Charter) Ohio 1-6249 34-6513657 - ---------------------------- ---------------- ------------------ (State or Other Jurisdiction (Commission File (I.R.S. Employer of Incorporation) Number) Identification No.) 125 Park Avenue, 14th Floor New York, NY 10017 - ---------------------------------------- ------------------ (Address of Principal Executive Offices) (Zip Code) Registrant's Telephone Number, Including Area Code: (212) 949-1373 - -------------------------------------------------------------------------------- Former Name or Former Address, if Changed Since Last Report. Total number of pages in report: 4 2 ITEM 2. DISPOSITION OF ASSETS On March 7, 2001, the Registrant and certain of its subsidiaries completed the sale of two shopping center properties, four office properties, five parking garages, one parking lot, a $1.5 million note receivable secured by a mortgage on a non-owned apartment property and certain assets used in the operation of the properties being sold (the "Asset Sale") under sales agreements with Radiant Investors LLC ("Purchaser"). Daniel P. Friedman, Anne N. Zahner and David Schonberger (the "Executives") are principals of Purchaser and were executive officers of the Registrant. Other than Mr. Friedman, who was a trustee of the Registrant from November 1998 through September 2000, no member of the Board of Trustees of the Registrant was affiliated with, or had an interest in, or a relationship with, Purchaser or any of its affiliates. Purchaser assigned its interest in the transaction to Radiant Ventures I, LLC. The principal equity investors in Radiant Ventures I, LLC are Purchaser, which is the managing member, and Landmark Equity Trust VII, which is the principal non-managing member (owning 89% of the total ownership interests in Radiant Ventures I, LLC). As a part of the Asset Sale, Purchaser received a purchase price adjustment for the net operating income from the properties sold from June 1, 2000 less (a) debt service on the properties, (b) capital expenditures committed subsequent to May 9, 2000 and paid prior to closing and (c) 66.6% of the asset management fees paid from June 1, 2000 until the closing of the transaction to the management firm controlled by the Executives that managed the assets of the Registrant. The Asset Sale was submitted to shareholders for approval and was approved by the shareholders at a meeting held on March 6, 2001. The Asset Sale is described in the previously filed definitive proxy materials relating to the March 6, 2001 shareholders meeting. The aggregate purchase price for the Asset Sale was $205 million. As part of the Asset Sale, Purchaser assumed $121.4 million of existing mortgage debt on the purchased properties and the Registrant granted to Purchaser a six-month bridge loan of $7 million secured by two of the properties sold. The balance of the purchase price for the Asset Sale was paid in cash. The book value as of September 30, 2000 of the properties sold was approximately $166 million. The acquisition price for the Asset Sale was determined as a result of negotiations between the Registrant and Purchaser and was determined based on a number of factors, primarily the highest price the Registrant could obtain for the properties. The representatives of the Registrant in these negotiations were the Chairman of the Registrant, William Ackman, and the Vice-Chairman of the Registrant, William Scully, both of whom have extensive experience in the real estate industry and neither of whom are affiliated with, or have an interest in, or a relationship with, Purchaser or any of its affiliates. ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS a. Financial Statements of Businesses Acquired Not applicable. b. Pro Forma Financial Information Pro Forma Combined Balance Sheet as of September 30, 2000. Pro Forma Combined Statement of Operations for the Nine Months Ended September 30, 2000. 3 Pro Forma Combined Statement of Operations for the Year Ended December 31, 1999. Notes to Pro Forma Combined Financial Statements. The Pro Forma Combined Balance Sheet of the Registrant as of September 30, 2000, reflects three adjustment columns: the Asset Sale to Purchaser, the sale of the Huntington Garage property to Northeastern Security Development Corporation in December 2000 and the North Valley financing. The Pro Forma Combined Statement of Operations for the nine months ended September 30, 2000, reflects five adjustment columns: the spinoff of Imperial Parking Corporation ("Imperial") in March 2000, the sale of the Crossroads Center property to General Growth Properties, Inc. in April 2000, the sale of Temple Mall in August 2000, the Asset Sale to Purchaser and the sale of the Huntington Garage property to Northeastern Security Development Corporation in December 2000. The Pro Forma Combined Statement of Operations for the year ended December 31, 1999, reflects six adjustment columns: the properties sold by the Registrant prior to December 31, 1999, the sale of the Crossroads Center property to General Growth Properties, Inc. in April 2000, the spinoff of Imperial in March 2000, the sale of Temple Mall in August 2000, the Asset Sale to Purchaser and the sale of the Huntington Garage property to Northeastern Security Development Corporation in December 2000. The Pro Forma Combined Balance Sheet of the Registrant assumes that the Asset Sale to Radiant and the sale of the Huntington Garage property occurred on September 30, 2000, and the Pro Forma Combined Statements of Operations assume that all transactions occurred at the beginning of the periods presented. The Pro Forma Combined Statement of Operations for the year ended December 31, 1999 and for the nine months ended September 30, 2000 are not necessarily indicative of the actual results that would have occurred had the pro forma transactions been consummated on the first day of the respective periods or of future operations of the Registrant. The Pro Forma financial statements do not take into consideration the increase in the Registrant's liquidity or possible uses of those funds. The Pro Forma Combined Balance Sheet and Pro Forma Combined Statements of Operations should be read in conjunction with the Notes to Pro Forma Combined Financial Statements. c. Exhibits 99.1 Press release dated March 8, 2001, regarding the sale of certain real estate properties to Radiant Investors, LLC. 99.2 Pro Forma Combined Balance Sheet as of September 30, 2000. 99.3 Pro Forma Combined Statement of Operations for the Nine Months Ended September 30, 2000. 99.4 Pro Forma Combined Statement of Operations for the Year Ended December 31, 1999. 99.5 Notes to Pro Forma Combined Financial Statements. 4 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. First Union Real Estate Equity and Mortgage Investments -------------------------------- (Registrant) Date: March 22, 2001 By: /S/ Neil H. Koenig -------------- ---------------- Neil H. Koenig Interim Chief Financial Officer EX-99.1 2 y46866ex99-1.txt PRESS RELEASE 1 Exhibit 99.1 PRESS RELEASE FIRST UNION REAL ESTATE EQUITY AND MORTGAGE INVESTMENTS ANNOUNCES CLOSING OF ASSET SALE TO RADIANT, SHAREHOLDER APPROVAL OF CHARTER AMENDMENTS NEW YORK - (Business Wire) - March 8, 2001. First Union Real Estate Equity and Mortgage Investments (NYSE: FUR) today announced that the agreement (the "Sale Contract") of the Company to sell certain of its real estate properties for approximately $205 million to Radiant Investors, LLC ("Radiant"), was approved by the requisite majority of shares at a special meeting held on March 6, 2001. Of the shares voted with respect to the proposal to approve the Sale Contract, approximately 98% were voted in favor of the proposal. Shareholders at the meeting also approved the Board's other proposals set forth in the proxy statement, including the reelection of two trustees and amendments to the Company's Declaration of Trust. The closing of the transactions under the Sale Contract occurred on March 7, 2001. As part of the Sale Contract transactions, Radiant assumed $121.4 million of existing mortgage debt on the purchased properties and the Company granted to Radiant a six-month bridge loan of $7.0 million secured by cross-collateralized first mortgages on the West Third Street Lot in Cleveland, Ohio and the Fifth and Marshall Garage in Richmond, Virginia. The balance of the purchase price under the Sale Contract was paid in cash. Following the sale, the Company has cash and cash equivalents of approximately $121.0 million. As described in the proxy statement relating to the meeting, the Company is evaluating appropriate uses for the net cash proceeds received from the sale and other cash on hand, including, without limitation: making new investments, including investments in real estate or non-real estate assets or businesses; increasing or continuing common or preferred share repurchase or similar programs; and distributing cash to the shareholders. The Company is in the process of retaining an investment banking firm to assist the Board in evaluating these alternatives. The Company also announced that the Board of Trustees has declared a quarterly dividend with respect to its Series A Preferred Shares of $0.525 per share, payable on April 30, 2001 to shareholders of record on March 31, 2001. Certain statements contained in this news release that are forward-looking are based on current expectations that are subject to a number of uncertainties and risks, and actual results may differ materially. The uncertainties and risks include, but are not limited to, changes in market activity, changes in local real estate conditions and markets, actions by competitors, interest rate movements and general economic conditions. Further information about these matters can be found in the information included in the definitive proxy materials of the Company with respect to the special meeting and the Annual Report filed by the Company with the SEC on Form 10-K. First Union Real Estate Equity and Mortgage Investments is a NYSE-listed stapled-stock real estate investment trust (REIT) headquartered in New York, New York. Contact: First Union Real Estate Equity and Mortgage Investments Neil Koenig, Interim Chief Financial Officer (212) 949-1373 EX-99.2 3 y46866ex99-2.txt PRO FORMA COMBINED BALANCE SHEET 1 Exhibit 99.2 FIRST UNION REAL ESTATE EQUITY AND MORTGAGE INVESTMENTS PRO FORMA COMBINED BALANCE SHEET SEPTEMBER 30, 2000 (IN THOUSANDS)
Pro Forma Adjustments ---------------------------------------------- Sale of Sale of North Valley Huntington Properties Historical Financing (5) Garage (1) to Radiant (2) Pro Forma ---------- ------------- ---------- -------------- --------- ASSETS Investments in real estate Land $ 47,292 $ $ (1,600) $ (39,607) $ 6,085 Buildings and improvements 249,583 (6,602) (179,383) 63,598 --------- ------- --------- --------- --------- 296,875 (8,202) (218,990) 69,683 Less - Accumulated depreciation (69,172) 3,457 57,997 (7,718) --------- ------- --------- --------- --------- Total investments in real estate 227,703 (4,745) (160,993) 61,965(3) Mortgage loans and notes receivable 1,483 5,517 7,000(2) Other assets Cash and cash equivalents - unrestricted 21,441 5,439 12,684 44,768 84,332 - restricted 4,512 789 (2,943) 2,358(4) Accounts receivable and prepayments, net of allowances 3,550 (20) (23) 3,507 Investments 209,914 209,914 Inventory 5,438 5,438 Unamortized debt issue costs 1,844 272 (94) (1,601) 421 Other 1,006 (641) 365 --------- ------- --------- --------- --------- Total assets $ 476,891 $ 6,500 $ 7,825 $(115,916) $ 375,300 ========= ======= ========= ========= ========= LIABILITIES AND SHAREHOLDERS' EQUITY Liabilities Mortgage loans $ 166,764 $ 6,500 $ (7,692) $(123,169) $ 42,403 Notes payable 150,113 150,113 Senior notes 12,538 12,538 Accounts payable and accrued liabilities 13,243 (300) 12,943 Deferred items 3,040 (3,040) -- --------- ------- --------- --------- --------- Total liabilities 345,698 6,500 (7,692) (126,509) 217,997 --------- ------- --------- --------- --------- Shareholders' equity Preferred shares of beneficial interest 23,171 23,171 Shares of beneficial interest 41,046 41,046 Additional paid in capital 216,269 216,269 Undistributed loss from operations (149,293) 15,517 10,593 (123,183) --------- ------- --------- --------- --------- Total shareholders' equity 131,193 15,517 10,593 157,303 --------- ------- --------- --------- --------- Total liabilities and shareholders' equity $ 476,891 $ 6,500 $ 7,825 $(115,916) $ 375,300 ========= ======= ========= ========= =========
1) Received approximately $12.7 million from the sale, after assumption of debt of approximately $7.6 million and expenses related to the sale. 2) Received approximately $44.8 million in cash from the sale, after assumption and repayment of debt of approximately $123 million and expenses and adjustments related to the sale. In addition, First Union provided $7 million in short term financing to the purchaser. Approximately $3.3 million of additional capital expenditures required to be paid by First Union after September 30, 2000 have been reflected as paid. 3) The balance consists primarily of investments in real estate at Circle Tower of approximately $2.2 million and Park Plaza of approximately $59.8 million. 4) The balance of restricted cash consists of a severance escrow of approximately $1.2 million and Park Plaza escrow balances of approximately $1.2 million. 5) In February 2001, in accordance with the Radiant sales agreement, First Union amended the mortgage loan on the North Valley Tech Center property to provide for an additional $6.5 million of financing. EX-99.3 4 y46866ex99-3.txt PRO FORMA COMBINED STATEMENT OF OPERATIONS 1 Exhibit 99.3 FIRST UNION REAL ESTATE EQUITY AND MORTGAGE INVESTMENTS PRO FORMA COMBINED STATEMENT OF OPERATIONS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2000 (IN THOUSANDS, EXCEPT PER SHARE DATA)
Pro Forma Adjustments ---------------------------------------------------------- Sale of Spinoff of Sale of Sale of Sale of Properties Imperial Cross- Temple Huntington to Historical (1) roads (2) Mall (3) Garage (4) Radiant (5) Pro Forma ---------- --- --------- -------- ---------- ----------- --------- Revenues Rents $ 37,195 $(3,170) $ (1,785) $(22,677) $ 9,563 Sales 6,642 6,642 Interest - Mortgage loans 193 $ (42) (114) 37 - Short-term investments 7,654 $ (490) (4) (156) 7,004 Dividends 450 450 Equity in loss from joint venture (148) 148 Other income 179 (6) 173 -------- ------- ------- ------- -------- -------- -------- 52,165 (490) (3,180) 106 (1,785) (22,947) 23,869 -------- ------- ------- ------- -------- -------- -------- Expenses Property operating 10,306 (655) (27) (6,389) 3,235 Cost of goods sold 6,410 6,410 Real estate taxes 4,324 (707) (267) (2,711) 639 Depreciation and amortization 9,170 (730) (201) (6,687) 1,552 Interest - Mortgage loans 13,330 (2,571) (501) (8,602) 1,656 - Notes payable 4,922 (47) (1) 4,874 - Senior notes 835 835 General and administrative 10,059 10,059 -------- ------- ------- ------- -------- -------- -------- 59,356 (4,663) (1,043) (24,390) 29,260 -------- ------- ------- ------- -------- -------- -------- Loss before capital gains, extraordinary loss and preferred dividend $ (7,191) $ (490) $ 1,483 $ 106 $ (742) $ 1,443 $ (5,391) ======== ======= ======= ======= ======== ======== ======== Per share data Basic weighted average shares 42,229 42,229 ======== ======== Diluted weighed average shares 48,258 48,258 ======== ======== Loss before capital gains, extraordinary loss and preferred dividend, basic and diluted $ (0.17) $ (0.13) ======== ========
1) Spinoff of Imperial was in March 2000. 2) Crossroads was sold in April 2000. 3) Temple Mall was sold in August 2000. 4) Huntington Garage was sold in December 2000. 5) The sale of properties to Radiant was in March 2001. EX-99.4 5 y46866ex99-4.txt PRO FORMA COMBINED STATEMENT OF OPERATIONS 1 Exhibit 99.4 FIRST UNION REAL ESTATE EQUITY AND MORTGAGE INVESTMENTS PRO FORMA COMBINED STATEMENT OF OPERATIONS For the Year Ended December 31, 1999 (In thousands, except per share data)
Pro Forma Adjustments ----------------------------------------------------- Properties sold prior to Sale of Spinoff of Historical December 31, 1999 Crossroads (1) Imperial (2) ---------- ----------------- -------------- ------------ Revenues Rents $ 109,839 $(53,647) $(11,378) Sales 6,643 Interest - Mortgage loans 463 - Short-term investments 2,649 (567) (7) (1,950) Equity in income from joint venture 64 Management fees 332 Other income 784 --------- -------- -------- ------- 120,774 (54,214) (11,385) (1,950) --------- -------- -------- ------- Expenses Property operating 36,224 (21,342) (1,844) Cost of goods sold 8,670 Real estate taxes 9,937 (3,709) (1,987) Depreciation and amortization 25,331 (11,283) (1,691) Interest - Mortgage loans 28,264 (11,221) (4,327) - Notes payable 4,232 (4,193) - Senior notes 1,113 - Bank loans and other 4,833 (3,253) General and administrative 14,664 Unrealized loss on carrying value of assets identified for disposition and impaired assets 9,800 --------- -------- -------- ------- 143,068 (55,001) (9,849) -- --------- -------- -------- ------- Loss before capital gain, extraordinary loss, discontinued operations and preferred dividend $ (22,294) $ 787 $ (1,536) $(1,950) ========= ======== ======== ======= Per share data Basic weighted average shares 38,827 ========= Diluted weighted average shares 38,836 ========= Loss before capital gain, extraordinary loss, discontinued operations and preferred dividend, basic and diluted $ (0.57) =========
Pro Forma Adjustments ---------------------------------------------------- Sale of Sale of Sale of Properties Temple Mall (3) Huntington (4) to Radiant (5) Pro Forma ---------------- -------------- -------------- --------- Revenues Rents $ (2,231) $(29,812) $ 12,771 Sales 6,643 Interest - Mortgage loans 463 - Short-term investments (87) 38 Equity in income from joint venture (64) -- Management fees 332 Other income 784 ------- -------- -------- -------- (64) (2,231) (29,899) 21,031 ------- -------- -------- -------- Expenses Property operating (78) (8,574) 4,386 Cost of goods sold 8,670 Real estate taxes (356) (3,068) 817 Depreciation and amortization (242) (7,742) 4,373 Interest - Mortgage loans (690) (9,074) 2,952 - Notes payable 39 - Senior notes 1,113 - Bank loans and other 1,580 General and administrative 14,664 Unrealized loss on carrying value of assets identified for disposition and impaired assets 9,800 ------- -------- -------- -------- -- (1,366) (28,458) 48,394 ------- -------- -------- -------- Loss before capital gain, extraordinary loss, discontinued operations and preferred dividend $ (64) $ (865) $ (1,441) $(27,363) ======= ======== ======== ======== Per share data Basic weighted average shares 38,827 ======== Diluted weighted average shares 38,836 ======== Loss before capital gain, extraordinary loss, discontinued operations and preferred dividend, basic and diluted $ (0.70) ========
1) Crossroads was sold in April 2000. 2) Spinoff of Imperial was in March 2000. 3) Temple Mall was sold in August 2000. 4) Huntington Garage was sold in December 2000. 5) The sale of properties to Radiant was in March 2001. EX-99.5 6 y46866ex99-5.txt NOTES TO PRO FORMA COMBINED FINANCIAL RESULTS 1 Exhibit 99.5 Notes to Pro Forma Combined Financial Statements Distribution of Imperial In March 2000, the Registrant distributed all common stock of Imperial to its shareholders. One share of Imperial common stock was distributed for every 20 of the Registrant's common shares of beneficial interest held on March 20, 2000. Approximately 2.1 million shares of Imperial common stock were distributed. As part of the spin-off, the Registrant repaid Imperial Parking Limited's bank credit facility of approximately $24.2 million, contributed approximately $7.5 million of cash, contributed its 14 Canadian parking properties and $6.7 million for a parking development located in San Francisco, California. Sale of Crossroads Shopping Center In April 2000, the Registrant sold Crossroads Shopping Center for $80.1 million, of which approximately $78.1 million was applied against a loan payable to the purchaser, the assumption of the first mortgage debt on the property and other liabilities. The Registrant recognized a gain on the sale of approximately $58.7 million, less an extraordinary loss on extinguishment of debt of approximately $2.4 million. Sale of Temple Mall In August 2000, the Registrant received approximately $2.4 million representing its 50% non-controlling ownership interest in the net proceeds from the sale of Temple Mall. The Registrant accounted for its interest in Temple Mall as an investment in a joint venture using the equity method of accounting. The Registrant recognized a gain from the investment in the joint venture of approximately $1.2 million. Temple Mall was sold for approximately $25.7 million, of which approximately $19.5 million was applied against the first mortgage debt on the mall. In addition, the joint venture repaid its $1.2 million note payable to the Registrant from cash reserves. Sale of the Huntington Garage In December 2000, the Registrant sold the Huntington Garage for $21.3 million, of which approximately $7.6 million was applied against the first mortgage debt on the garage. The Registrant recognized a gain on the sale of approximately $16.1 million, less an extraordinary loss on early extinguishment on debt of approximately $.6 million. Sale of Properties In March 2001, the Registrant sold a significant portion of its remaining real estate assets (the "Purchased Assets") to the Purchaser for an aggregate sale price, before costs and adjustments, of $205 million. At the closing of this transaction, the sale price of $205 million was reduced by $20.6 million, which was the net sales price realized by the Registrant from the sale of the Huntington Garage which was sold in December 2000 to another party and which was part of the aggregate sales price of $205 million. The Huntington Garage property was among those that Purchaser agreed to acquire from the Registrant. The Purchaser and the Registrant had agreed that the Registrant was permitted to sell the Huntington Garage property to a third party and that Purchaser would receive a credit towards the $205 million purchase price equal to the net sales price realized by the Registrant from the sale of the Huntington Garage. 2 The assets purchased by Purchaser consisted of the following: - 55 Public Square and CEI Office Buildings - Cleveland, Ohio - 55 Public Square Garage - Cleveland, Ohio - West Third Street Parking Lot - Cleveland, Ohio - North Valley Tech Center - Thornton, Colorado - Two Rivers Business Center - Clarksville, Tennessee - Westgate Shopping Center - Abilene, Texas - Pecanland Mall - Monroe, Louisiana - Long Street Garage - Columbus, Ohio - Madison and Wells Garage - Chicago, Illinois - Printers Alley Garage - Nashville, Tennessee - 5th and Marshall Garage - Richmond, Virginia - Club Associates' note receivable, face amount of approximately $1.5 million. - Ancillary assets including furniture, fixtures and equipment, and reserve and escrow accounts related to the Purchased Assets - Net operating income from all of the Purchased Assets from June 1, 2000 less (a) debt service on the purchased assets, (b) capital expenditures committed subsequent to May 9, 2000 and (c) 66.6% of asset management fees paid to Radiant Partners, LLC from June 1, 2000 until the closing of the transaction The Registrant retained ownership of the following assets: - Unrestricted cash and Treasury bills - Convertible preferred investment in HQ Global Workplaces - Severance and prior trustees escrow account - Park Plaza Mall - Little Rock, Arkansas - Circle Tower - Indianapolis, Indiana - Peachtree Mall legal claim In addition, the Registrant retained ownership of Ventek. The Registrant remains liable for the following obligations: - 8.4% convertible preferred shares; $24,620,000 approximate face amount - 8.875% Publicly-traded senior notes; $12,500,000 approximate face amount - Dallas management office lease (the Registrant has sub-leased this space) - Certain liabilities relating to the Purchased Assets arising prior to June 1, 2000, except for certain potential liabilities of the Westgate Shopping Center - Corporate expenses and liabilities not related to the Purchased Assets (including the Ventek guarantee) - Property level mortgage debt on retained assets - Other ordinary course liabilities Radiant Partners, LLC will continue to manage the Registrant's remaining assets for $250,000 per year for two years. 3 In connection with the sale, the Registrant granted to the Purchaser a four-month bridge loan, which may be extended for an additional two months. The loan in the amount of $7.0 million bears interest at 11% per annum secured by cross-collateralized first mortgages on two properties. Payments of interest only are payable in monthly installments commencing April 1, 2001 through and including July 1, 2001. The loan may be extended by the purchaser through September 1, 2001 at an interest rate of 15% per annum, at which time all principal and accrued interest shall be payable. Prepayment of the loan is permitted without penalty only by payment of the entire principal balance and accrued interest at time of prepayment. -----END PRIVACY-ENHANCED MESSAGE-----