-----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, QBisWAQNGe6Pr+1ZIzZdgKZR9Zxw/SsOuS3M9CA33NnqdEL5y/htK2oNfJOJXZwD v+y3tL6TYLAB//2bdHUkFA== 0001193805-03-001132.txt : 20031201 0001193805-03-001132.hdr.sgml : 20031201 20031201111240 ACCESSION NUMBER: 0001193805-03-001132 CONFORMED SUBMISSION TYPE: SC TO-T PUBLIC DOCUMENT COUNT: 8 FILED AS OF DATE: 20031201 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: FUR INVESTORS LLC CENTRAL INDEX KEY: 0001271267 IRS NUMBER: 200418083 STATE OF INCORPORATION: DE FILING VALUES: FORM TYPE: SC TO-T BUSINESS ADDRESS: STREET 1: 100 JERICHO CITY: JERICHO STATE: NY ZIP: 11753 SUBJECT COMPANY: 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: SC TO-T SEC ACT: 1934 Act SEC FILE NUMBER: 005-19676 FILM NUMBER: 031029139 BUSINESS ADDRESS: STREET 1: 125 PARK AVENUE STREET 2: N/A CITY: NEW YORK STATE: NY ZIP: 10017 BUSINESS PHONE: 2129051104 MAIL ADDRESS: STREET 1: 125 PARK AVENUE STREET 2: N/A CITY: NEW YORK STATE: NY ZIP: 10017 FORMER COMPANY: FORMER CONFORMED NAME: FIRST UNION REALTY DATE OF NAME CHANGE: 19691012 SC TO-T 1 e300797_sctot-fur.txt TENDER OFFER STATEMENT SECURITIES AND EXCHANGE COMMISSION, WASHINGTON, D.C. 20549 SCHEDULE TO TENDER OFFER STATEMENT UNDER SECTION 14(d) (1) OR 13(e) (1) OF THE SECURITIES EXCHANGE ACT OF 1934 -------------------------------------------------- FIRST UNION REAL ESTATE EQUITY AND MORTGAGE INVESTMENTS (Name of Subject Company (Issuer)) -------------------------------------------------- FUR INVESTORS, LLC (Names of Filing Persons-Offeror) -------------------------------------------------- Common Shares of Beneficial Interest, par value $1.00 per share (Title of Class of Securities) -------------------------------------------------- 337400105 (CUSIP Number of Class of Securities) -------------------------------------------------- Mr. Michael L. Ashner FUR Investors, LLC 100 Jericho Quadrangle Suite 214 Jericho, New York 11753 (516) 422-0023 (Name, Address and Telephone Numbers of Person Authorized to Receive Notices and Communications on Behalf of Filing Persons) With a copy to: Mark I. Fisher, Esq. Katten Muchin Zavis Rosenman 575 Madison Avenue New York, New York 10022 (212) 940-8877 CALCULATION OF FILING FEE - -------------------------------------------------------------------------------- Transaction Valuation* $11,500,000 Amount of Filing Fee $2,300 - -------------------------------------------------------------------------------- * For the purposes of calculating amount of filing fee only. This amount assumes the purchase of 5,000,000 common shares of beneficial interest of First Union Real Estate Equity and Mortgage Investments at a purchase price of $2.30 per share. |_| Check the box if any part of the fee is offset as provided by Rule 0- 11 (a) (2) and identify the filing with which the offsetting fee was previously paid. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. Amount Previously Paid: None Filing Party: Not Applicable Form or Registration No.: Not Applicable Date Filed: Not Applicable |_| Check the box if the filing relates solely to preliminary communications made before the commencement of a tender offer. Check the appropriate boxes below to designate any transactions to which the statement relates: |X| third-party tender offer subject to Rule 14d-1. |_| issuer tender offer subject to Rule 13e-4. |_| going-private transaction subject to Rule 13e-3. |_| amendment to Schedule 13D under Rule 13d-2. Check the following box if the filing is a final amendment reporting the results of the tender offer: |_| This Tender Offer Statement on Schedule TO is filed by FUR Investors, LLC, a Delaware limited liability company (the "Purchaser"). This Schedule TO relates to the offer by the Purchaser to purchase up to 5,000,000 common shares of beneficial interest, par value $1.00 per share (the "Shares"), of First Union Real Estate Equity and Mortgage Investments, an Ohio business trust (the "Company") at $2.30 per Share, net to the seller, in cash (subject to applicable withholding of United States federal, state and local taxes), less the per share amount of distributions, if any, declared and payable by the Company to holders of Shares between the date hereof and the expiration date of the Offer, without interest thereon, upon the terms and subject to the conditions set forth in the Offer to Purchase, dated December 1, 2003 (the "Offer to Purchase"), and in the related Letter of Transmittal, copies of which are attached hereto as Exhibits (a)(1) and (a)(2), respectively (which, together with any amendments or supplements thereto, collectively constitute the "Offer"). The information set forth in the Offer to Purchase and the related Letter of Transmittal is incorporated herein by reference with respect to Items 1 through 11 of this Schedule TO. Item 12. Exhibits. (a)(1) Offer to Purchase, dated December 1, 2003. (a)(2) Form of Letter of Transmittal. (a)(3) Form of Notice of Guaranteed Delivery. (a)(4) Form of Letter to Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees. (a)(5) Form of Letter to Clients for use by Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees. (a)(6) Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9. (a)(7) Form of summary advertisement published on December 1, 2003. (a)(8) Text of joint press release issued by the Company and the Purchaser, dated November 26, 2003 (incorporated herein by reference to the Purchaser's Statement on Schedule TO-C filed on November 26, 2003). (d)(1) Stock Purchase Agreement between the Company and the Purchaser, dated as of November 26, 2003 ("Stock Purchase Agreement") (incorporated herein by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K dated December 1, 2003 (the "Form 8-K")). (d)(2) Guaranty of Michael L. Ashner, Guarantor, dated November 26, 2003, in favor of the Company (incorporated herein by reference to Exhibit 10.2 to the Company's Form 8-K). (d)(3) Form of Advisory Agreement between the Company and FUR Advisors LLC (incorporated herein by reference to Exhibit 10.3 to the Company's Form 8-K). (d)(4) Form of Exclusivity Services Agreement between the Company and Michael L. Ashner (incorporated herein by reference to Exhibit 10.4 to the Company's Form 8-K). (d)(5) Form of Covenant Agreement between the Company and the Purchaser (incorporated herein by reference to Exhibit 10.5 to the Company's Form 8-K). (d)(6) Form of Escrow Agreement by and among the Company, the Purchaser and an Escrow Agent to be designated (incorporated herein by reference to Exhibit 10.6 to the Company's Form 8-K). (g) None. (h) Not applicable. 2 SIGNATURE After due inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. FUR Investors, LLC By: /s/ Michael L. Ashner --------------------------- Name: Michael L. Ashner Title: Manager December 1, 2003 ---------------- Date 3 EXHIBIT INDEX (a)(1) Offer to Purchase, dated December 1, 2003. (a)(2) Form of Letter of Transmittal. (a)(3) Form of Notice of Guaranteed Delivery. (a)(4) Form of Letter to Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees. (a)(5) Form of Letter to Clients for use by Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees. (a)(6) Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9. (a)(7) Form of summary advertisement published on December 1, 2003. (a)(8) Text of joint press release issued by the Company and the Purchaser, dated November 26, 2003 (incorporated herein by reference to the Purchaser's Statement on Schedule TO-C filed on November 26, 2003). (d)(1) Stock Purchase Agreement between the Company and the Purchaser, dated as of November 26, 2003 ("Stock Purchase Agreement") (incorporated herein by reference to Exhibit 10.1 to the Company's Form 8-K dated December 1, 2003 (the "Form 8-K")). (d)(2) Guaranty of Michael L. Ashner, Guarantor, dated November 26, 2003, in favor of the Company (incorporated herein by reference to Exhibit 10.2 to the Company's Form 8-K). (d)(3) Form of Advisory Agreement between the Company and FUR Advisors LLC (incorporated herein by reference to Exhibit 10.3 to the Company's Form 8-K). (d)(4) Form of Exclusivity Services Agreement between the Company and Michael L. Ashner (incorporated herein by reference to Exhibit 10.4 to the Company's Form 8-K). (d)(5) Form of Covenant Agreement between the Company and the Purchaser (incorporated herein by reference to Exhibit 10.5 to the Company's Form 8-K). (d)(6) Form of Escrow Agreement by and among the Company, the Purchaser and an Escrow Agent to be designated (incorporated herein by reference to Exhibit 10.6 to the Company's Form 8-K). (g) None. (h) Not applicable. 4 EX-99.(A)(1) 3 e300797_ex99-a1.txt OFFER TO PURCHASE, DATED DECEMBER 1, 2003. Offer to Purchase for Cash Up to 5,000,000 Common Shares of Beneficial Interest of First Union Real Estate Equity and Mortgage Investments at $2.30 Net Per Share by FUR Investors, LLC THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON MONDAY, DECEMBER 29, 2003 UNLESS THE OFFER IS EXTENDED. THIS OFFER IS BEING MADE UNDER A STOCK PURCHASE AGREEMENT DATED AS OF NOVEMBER 26, 2003 (THE "STOCK PURCHASE AGREEMENT") BETWEEN FIRST UNION REAL ESTATE EQUITY AND MORTGAGE INVESTMENTS, AN OHIO BUSINESS TRUST (THE "COMPANY"), AND FUR INVESTORS, LLC, A DELAWARE LIMITED LIABILITY COMPANY (THE "PURCHASER"). THE SHARES SOUGHT HEREUNDER REPRESENT APPROXIMATELY 19.2% OF THE SHARES CURRENTLY OUTSTANDING. PURSUANT TO THE STOCK PURCHASE AGREEMENT, FOLLOWING THE EXPIRATION OF THIS OFFER WE WILL PURCHASE FROM THE COMPANY, AT A PURCHASE PRICE OF $2.60 PER SHARE, BETWEEN 5,000,0000 AND 5,185,724 NEWLY ISSUED SHARES OF THE COMPANY, DEPENDING UPON THE NUMBER OF SHARES PURCHASED IN THE OFFER. IF THIS OFFER IS FULLY SUBSCRIBED, FOLLOWING THIS OFFER AND OUR PURCHASE OF SHARES FROM THE COMPANY, WE WILL OWN 10,000,000 SHARES, REPRESENTING 32.2% OF THE OUTSTANDING COMMON SHARES OF THE COMPANY. FOLLOWING THIS OFFER AND OUR PURCHASE OF SHARES FROM THE COMPANY, OUR AFFILIATE WILL BE RETAINED BY THE COMPANY TO MANAGE THE DAY TO DAY OPERATIONS OF THE COMPANY. THE OFFER IS SUBJECT TO THE TERMS AND CONDITIONS CONTAINED IN THIS OFFER TO PURCHASE. SEE SECTION 13 OF THIS OFFER TO PURCHASE. THE OFFER IS NOT CONDITIONED UPON THE RECEIPT OF FINANCING OR ANY MINIMUM NUMBER OF SHARES BEING TENDERED. ------------- THE BOARD OF TRUSTEES OF THE COMPANY HAS APPROVED THE STOCK PURCHASE AGREEMENT BUT IS REMAINING NEUTRAL AND TAKING NO POSITION AS TO WHETHER SHAREHOLDERS SHOULD TENDER THEIR SHARES IN THE OFFER. ------------- IMPORTANT Any shareholder desiring to tender all or any portion of that shareholder's shares should either (1) complete and sign the letter of transmittal, or a facsimile thereof, in accordance with the instructions to the letter of transmittal, have that shareholder's signature thereon guaranteed if so required, mail or deliver the letter of transmittal, or facsimile, or, in the case of a book-entry transfer, an agent's message (as defined therein), and any other required documents to the depositary and either deliver the certificates for those shares to the depositary along with the letter of transmittal, or facsimile, or deliver those shares in accordance with the procedure for book-entry transfer or (2) request that shareholder's broker, dealer, bank, trust company or other shareholder nominee effect the transaction for that shareholder. A shareholder having shares registered in the name of a broker, dealer, bank, trust company or other nominee must contact that person if that shareholder desires to tender those shares. If a shareholder desires to tender shares and that shareholder's certificates for shares are not immediately available or the procedure for book-entry transfer cannot be completed on a timely basis, or time will not permit all required documents to reach the depositary prior to the expiration date (as defined herein), that shareholder's tender may be effected by following the procedure for guaranteed delivery set forth in this Offer to Purchase. Questions and requests for assistance or for additional copies of this Offer to Purchase, the letter of transmittal and the notice of guaranteed delivery may be directed to MacKenzie Partners, Inc., information agent, at the address and telephone number set forth on the back cover of this Offer to Purchase. December 1, 2003 IMPORTANT Any shareholder desiring to tender any or all of such shareholder's shares should, prior to December 29, 2003, either (i) mail, deliver or telecopy to National City Bank (the "depositary") at the address or facsimile number set forth below (a) a properly completed and duly executed Letter of Transmittal (a copy of which is enclosed with this Offer to Purchase, printed on cream paper), including any required signature guarantees, (b) the stock certificates representing the shares tendered and (c) any other documents required by the Letter of Transmittal, (ii) cause such shareholder's broker, dealer, commercial bank, trust company or custodian to tender applicable shares pursuant to the procedures for book-entry transfer or (iii) comply with the guaranteed delivery procedures. Via U.S. Mail: National City Bank Corporate Actions Processing Center P.O. Box 859208 161 Bay State Drive Braintree, MA 02185-9208 Via Overnight Courier: National City Bank Corporate Actions Processing Center 161 Bay State Drive Braintree, MA 02184 Via Hand: c/o The Depository Trust Company Transfer Agent Drop Service 55 Water Street Jeanette Park Entrance New York, NY 10041 or National City Bank Corporate Trust Operations 3rd Floor--North Annex 4100 West 150th Street Cleveland, OH 44135 Via Facsimile: 1-216-257-8508 Questions or requests for assistance or additional copies of this Offer to Purchase or the Letter of Transmittal may be directed to MacKenzie Partners, Inc., the information agent, at the address or facsimile number set forth below. [LOGO] MACKENZIE PARTNERS, INC. 105 Madison Ave. New York, New York 10016 proxy@mackenziepartners.com (212) 929-5500 (call collect) or Toll-Free (800) 322-2885 TABLE OF CONTENTS
Page ---- INTRODUCTION...............................................................................4 THE TENDER OFFER...........................................................................5 Section 1 Terms of the Offer; Proration..............................................5 Section 2. Procedure for Tendering Shares.............................................6 Section 3. Withdrawal Rights..........................................................9 Section 4. Acceptance for Payment and Payment.........................................9 Section 5. Certain U.S. Federal Income Tax Consequences..............................10 Section 6. Price Range of the Shares.................................................11 Section 7. Effect of the Offer on the Market for the Shares..........................12 Section 8. Information Concerning First Union........................................12 Section 9. Information Concerning the Purchaser and Its Affiliates...................12 Section 10. Source and Amount of Funds................................................13 Section 11. Contacts and Transactions With First Union; Background of the Offer.......13 Section 12. Purpose of the Offer; Plans For First Union...............................20 Section 13. Conditions to the Offer...................................................20 Section 14. Legal Matters.............................................................21 Section 15. Fees and Expenses.........................................................21 Section 16. Miscellaneous.............................................................22 SCHEDULE I INFORMATION REGARDING THE PURCHASER'S SOLE MANAGER SCHEDULE II FINANCIAL STATEMENT
SUMMARY TERM SHEET FUR Investors, LLC, referred to in this Offer to Purchase as the "Purchaser," "FUR Investors," "we" or "us," is offering to purchase up to 5,000,000 common shares of First Union Real Estate Equity and Mortgage Investments, referred to in this Offer to Purchase as "First Union," or the "Company", for $2.30 per share in cash. The following are some questions you, as a shareholder of First Union, may have and answers to those questions. We urge you to read the remainder of this Offer to Purchase and the accompanying letter of transmittal carefully, because the information in this summary is not complete and the remainder of this Offer to Purchase and the letter of transmittal contain additional important information. Who Is Offering To Buy My Shares? FUR Investors is offering to purchase your shares . FUR Investors is a Delaware limited liability company that is not affiliated with First Union. See Section 9 of this Offer to Purchase for additional information about us. We are offering to purchase your shares in accordance with a Stock Purchase Agreement that we entered into with First Union pursuant to which we are making a significant investment in First Union. Following this offer and our purchase of shares from the Company, our affiliate will be retained by the Company to manage the day to day operations of the Company and our manager, Michael L. Ashner, will become President and Chief Executive Officer of First Union. See Section 11 of this Offer to Purchase for more information regarding the terms of the Stock Purchase Agreement. What Shares Are You Seeking in This Offer? We are offering to purchase up to 5,000,000 common shares of First Union. See Section 1 of this Offer to Purchase for the specific terms of our offer. What Happens if Shareholders Tender More than You are Willing to Buy? If shareholders tender more than 5,000,000 shares, we will accept 5,000,000 shares for payment on a pro-rata basis (with adjustments to avoid purchases of fractional shares) based upon the number of shares validly tendered and not withdrawn by the expiration date by each shareholder. If we prorate, the shares which are not accepted for purchase will be returned to you. For more information regarding proration, see Section 1 of this Offer to Purchase. If You Prorate, When Will I Know How Many Shares Will Actually Be Accepted For Tender and Payment? If proration of tendered shares is required, because of the difficulty of determining the precise number of shares to be purchased from each tendering shareholder, we do not expect to announce the final results of proration or pay for any shares until at least five New York Stock Exchange trading days after the expiration date. Preliminary results of proration will be announced by press release as promptly as practicable. You may obtain such preliminary information from the information agent at its telephone number set forth on the back cover of this Offer to Purchase. How Much Are You Offering To Pay, What Is the Form of Payment and Will I Have To Pay Any Fees or Commissions? We are offering to pay $2.30 per share, net to you, in cash (subject to applicable withholding of United States federal, state and local taxes), less the per share amount of distributions, if any, declared and payable by First Union to common shareholders from and after the date of this offer until the expiration of the offer. If you are the record owner of your shares and you tender your shares to us in the offer, you will not have to pay brokerage fees or similar expenses. If you own your shares through a broker or other nominee and that person tenders your shares on your behalf, that person may charge you a fee for doing so. You should consult your broker or other nominee to determine whether any charges will apply. Do You Have the Financial Resources To Make Payment? If 5,000,000 shares are purchased, our capital commitment will be $11,500,000 to purchase the shares purchased in the offer and an additional $13,000,000 to purchase newly issued shares from the Company following the offer. We have adequate funds available to us to pay tendering shareholders for shares tendered and to pay for the newly issued shares, and neither the offer nor the newly issued share purchase is conditioned on our obtaining any financing. However, we may choose to finance the purchase of the shares tendered. Our most recent financial statement is attached as Schedule II. Why Are You Making This Offer? We are making the offer and acquiring additional shares from the Company in order to acquire a significant stake in the Company. Following the conclusion of the offer and our purchase of shares from the Company, our affiliate will be retained by the Company to manage the day to day operations of the Company. See Section 11 of this Offer to Purchase for a description of the background of the offer and the advisory agreement under which our affiliate will be retained. How Long Do I Have To Decide Whether To Tender in the Offer? You will have at least until 12:00 midnight, New York City time on December 29, 2003 to decide whether to tender your shares in the offer. If you cannot deliver everything that we require in order to make a valid tender by that time, you may be able to use a guaranteed delivery procedure, which we discuss in Sections 1 and 2 of this Offer to Purchase. Can the Offer Be Extended and Under What Circumstances? Yes. We may extend the offer, in our discretion. If we extend the offer, we will inform National City Bank, which is the depositary for the offer, of that fact and will make a public announcement of the extension, by not later than 9:00 a.m., New York City time, on the business day after the day on which the offer was scheduled to expire. See Section 1 of this Offer to Purchase for information relating to an extension of the offer. What Are the Most Important Conditions to the Offer? There are no conditions to the offer based on minimum shares tendered, the availability of financing or otherwise determined by the success of the offer. However, we may not be obligated to purchase any shares in the event certain conditions occur, such as legal or government actions which would prohibit the purchase. Furthermore, we are not obligated to purchase any shares which are validly tendered if, among other things, the board of trustees withdraws its approval of the Stock Purchase Agreement or recommends that shareholders not tender their shares in the offer. See Section 13 of this Offer to Purchase for more information pertaining to conditions to the offer. How Do I Tender My Shares? To tender shares, you must deliver the certificates representing your shares, together with a completed letter of transmittal, or facsimile thereof, and any other documents required, to National City Bank, the depositary for the offer, not later than the time the offer expires. If your shares are held in street name, the shares can be tendered only by your nominee through The Depository Trust Company. If you cannot deliver something that is required by the expiration of the offer, you may still participate in the offer by having a broker, bank or other fiduciary that is a member of the Securities Transfer Agents Medallion Program or another eligible institution guarantee that the depositary will receive the missing items within a period of three trading days. The depositary must receive the missing items within that period for the tender to be valid. See Section 2 of this Offer to Purchase for more information pertaining to the procedure for tendering shares. Until What Time Can I Withdraw Previously Tendered Shares? You can withdraw shares at any time until the offer has expired and, under certain limited circumstances, after expiration of the offer. See Section 3 of this Offer to Purchase for more information on your withdrawal rights. How Do I Withdraw Previously Tendered Shares? To withdraw shares, you must deliver a written notice of withdrawal, or a facsimile of one, with the required information to the depositary while you still have the right to withdraw the shares. If you have tendered your shares by giving instructions to a broker or nominee, you must instruct that person to arrange for the withdrawal of your shares. See Section 3 of this Offer to Purchase for more information on your withdrawal rights. If I Decide Not to Tender, How Will the Offer Affect My Shares? If you decide not to tender your shares, you will still own the same number of common shares of First Union, which will still be a public company listed on the New York Stock Exchange. However, our purchase of shares under the offer may reduce the number of holders of shares and the number of shares that might otherwise trade publicly and could adversely affect the liquidity and 2 market value of the remaining shares the public holds. In addition, our purchase of additional shares from the Company following expiration of the offer in accordance with the terms of the Stock Purchase Agreement, although at a price that is higher than the offer price hereunder, will decrease your percentage ownership of common shares. In this regard, if we acquire all of the shares sought in the offer, we would own approximately 32.2% of the outstanding shares. Do I Have Appraisal or Dissenter's Rights? There are no appraisal or dissenters' rights available in connection with the offer. What Does First Union's Board of Directors Think of This Offer? First Union's board of trustees unanimously authorized the Stock Purchase Agreement and determined that the Stock Purchase Agreement and the transactions contemplated thereby are in the best interests of the Company's shareholders. However, the board of trustees has determined to remain neutral and is taking no position as to whether shareholders should tender their shares in the offer. First Union will be preparing a Solicitation and Recommendation Statement containing additional information regarding the board of trustees' determination and recommendation. The Solicitation and Recommendation Statement will be sent to shareholders no later than five days after the date of this offer. What Is the Market Value of My Shares as of a Recent Date? On November 26, 2003, the last trading day before First Union announced that it had entered into the Stock Purchase Agreement, the last sale price of the shares reported by the New York Stock Exchange was $1.87 per share. You should obtain a recent price for shares in deciding whether to tender your shares. See Section 6 of this Offer to Purchase for information on the market price of your shares since January 2001. What Are the Tax Consequences Of Tendering Shares in the Offer? If your shares are accepted for payment pursuant to the offer, you generally will recognize gain or loss measured by the difference between the cash you receive and your adjusted tax basis in the shares that you tender. See Section 5 of this Offer to Purchase for further information. We recommend that you consult with your tax advisor. Who Can I Talk to if I Have Questions About the Tender Offer? You may call MacKenzie Partners, Inc., which is acting as the information agent for our offer, toll free at (800) 322-2885. 3 INTRODUCTION We are offering to purchase up to 5,000,000 common shares of beneficial interest, par value $1.00 per share, of First Union at a purchase price of $2.30 per share, net to the seller in cash (subject to applicable withholding of United States federal, state and local taxes), less the per share amount of distributions, if any, declared and payable by First Union between the date hereof and the expiration date of the offer, without interest thereon, on the terms and subject to the conditions set forth in this Offer to Purchase and in the related letter of transmittal (which, together with any amendments or supplements hereto or thereto, collectively constitute the "offer"). In this Offer to Purchase, references to sections are to sections hereof unless otherwise indicated. Tendering shareholders whose shares are registered in their own names and who tender directly to National City Bank, the depositary for the offer, will not be obligated to pay brokerage fees or commissions or, except as set forth in Instruction 6 to the letter of transmittal, stock transfer taxes on the purchase of shares by us under the offer. We will pay all fees and expenses of National City Bank and MacKenzie Partners, Inc., which is acting as the information agent, that are attributable to the offer. We are making the offer under the terms of a Stock Purchase Agreement between us and First Union dated as of November 26, 2003. Pursuant to the Stock Purchase Agreement, following the expiration of this offer we will purchase from the Company, at a purchase price of $2.60 per share, between 5,000,0000 and 5,185,724 newly issued shares of the Company, depending upon the number of shares purchased in the offer. If this offer is fully subscribed, following this offer and our purchase of shares from the Company, we will own 10,000,000 shares, representing 32.2% of the outstanding common shares of the Company. Following this offer and our purchase of shares from the Company, our affiliate will be retained by the Company to manage the day to day operations of the Company and our manager, Michael L. Ashner, will become President and Chief Executive Officer of the Company. The offer is not conditioned upon the receipt of financing or any minimum number of shares being tendered. Our obligation to accept, and pay for, shares validly tendered pursuant to the offer is conditioned upon satisfaction of the conditions set forth in Section 13 of this Offer to Purchase. First Union's board has approved the Stock Purchase Agreement but is remaining neutral and taking no position as to whether shareholders should tender their shares in the offer. The Company will be filing a Solicitation/Recommendation Statement on Schedule 14D-9 with the Securities and Exchange Commission and mailing the 14D-9 to First Union's shareholders as promptly as reasonably practicable after the date of this offer but in no event later than five business days thereafter. We urge you to read the Schedule 14D-9. First Union has informed us that, as of November 26, 2003, 26,058,913 common shares were issued and outstanding. Section 5 of this Offer to Purchase describes certain United States federal income tax consequences of a sale of shares under the offer. This Offer to Purchase and the related letter of transmittal contain important information that you should read carefully before you make any decision regarding the offer. 4 THE TENDER OFFER Section 1. Terms of the Offer; Proration On the terms of and subject to the conditions to the offer, we will accept for payment and pay for up to 5,000,000 shares validly tendered prior to the expiration date and not theretofore properly withdrawn in accordance with section 3 of this Offer to Purchase. The term "expiration date" means 12:00 midnight, New York City time, on December 29, 2003, unless and until we, in our sole discretion, shall have extended the period of time during which the offer is open, in which event the term "expiration date" will mean the latest time and date on which the offer, as so extended by us, will expire. For purposes of this offer, the term "business day" means any day other than Saturday, Sunday or any U.S. federal holiday consisting of the time period from 12:01 a.m. through 12:00 midnight, New York City time. If more than 5,000,000 shares are validly tendered prior to the expiration date, and not withdrawn, we will, upon the terms and subject to the conditions of the offer, purchase 5,000,000 shares on a pro rata basis (with adjustments to avoid purchases of fractional shares) based upon the number of shares validly tendered by the expiration date and not withdrawn. If proration of tendered shares is required, because of the difficulty of determining the precise number of shares properly tendered and not withdrawn, we do not expect to announce the final results of proration or pay for any shares until at least five New York Stock Exchange trading days after the expiration date and proration period. Preliminary results of proration will be announced by press release as promptly as practicable. Holders of shares may obtain such preliminary information from the information agent. All shares not accepted for payment due to an oversubscription will be returned to the shareholder or, in the case of tendered shares delivered by book-entry transfer, credited to the account at the book-entry transfer facility from which the transfer had previously been made, in each case, in accordance with the procedure described in Section 4 of this Offer to Purchase. Pursuant to the Stock Purchase Agreement, without the consent of First Union, we will not: o reduce the maximum number of shares sought under the offer; o reduce the price per share payable under the offer or change the form of consideration payable under the offer; o impose any other condition to the offer other than those described in section 13 of this Offer to Purchase; or o amend, add to or waive any other term of the offer in any manner that would be, in any significant respect, adverse to the Company or the shareholders. Subject to applicable rules and regulations of the Securities and Exchange Commission, we expressly reserve the right, in our sole discretion, at any time or from time to time, to extend the expiration date. Under no circumstances will we pay interest on the purchase price for tendered shares, whether or not we exercise our right to extend the offer. There can be no assurance that we will exercise our right to extend the offer. Any extension, delay, termination, waiver or amendment will be followed as promptly as practicable by public announcement. In the case of an extension of the offer, oral or written notice thereof will be given to the depositary and the announcement will be made no later than 9:00 a.m., New York City time, on the next business day after the previously scheduled expiration date. Any public announcement made pursuant to the offer will be disseminated promptly to the shareholders in a manner reasonably designed to inform the shareholders of such change. Without limiting the manner in which we may choose to make any public announcement, except as provided by applicable law, including Rules 13e-4(d)(2) and 13e-4(e)(3) under the Securities Exchange Act of 1934 (the "Exchange Act"), we shall have no obligations to publish, advertise or otherwise communicate any such public announcement other than by issuing a press release to the Dow Jones News Service. If we extend the offer, or we are delayed in our acceptance for payment of or payment, whether before or after our acceptance for payment, for shares or are unable to pay for shares under the offer for any reason, then, without prejudice to our rights under the offer, the depositary may retain tendered shares on our behalf, and those shares may not be withdrawn except to the extent tendering shareholders are entitled to withdrawal rights as set forth in Section 3 of this Offer to Purchase. Exchange Act Rule 14e-1(c), however, will limit our ability to delay our payment for shares we have accepted for payment. That rule requires that a bidder pay the consideration offered or return the securities deposited by or on behalf of holders of securities promptly after the termination or withdrawal of that bidder's offer. 5 If we make a material change in the offer, or if we waive a material condition to the offer, we will extend the offer to the extent required by Rules 13e-4(d)(2) and 13e-4(e)(3) under the Exchange Act. The minimum period during which an offer must remain open following material changes in its terms or the information concerning it, other than a change in price or the percentage of securities sought, will depend on the facts and circumstances then existing, including the relative materiality of the changed terms or information. In the view of the Securities and Exchange Commission, an offer should remain open for a minimum of five business days from the date the material change is first published, sent or given to shareholders, and, if material changes are made with respect to information that approaches the significance of price and the percentage of securities sought, a minimum of 10 business days may be required to allow for adequate dissemination and investor response. With respect to a change in price, a minimum period of 10 business days from the date of the change is generally required to allow for adequate dissemination to shareholders. First Union has provided us with its shareholder lists and security position listing for the purpose of disseminating the offer to holders of shares. We will mail this offer to purchase, the related letter of transmittal and other relevant materials to record holders of shares, and we will furnish those materials to brokers, dealers, commercial banks, trust companies and similar persons whose names, or the names of whose nominees, appear on First Union's shareholder lists or, if applicable, who are listed as participants in a clearing agency's security position listing, for subsequent transmittal to beneficial owners of shares. Section 2. Procedure for Tendering Shares Valid Tender. For a shareholder to validly to tender shares under the offer: o the depositary must receive, at one of the addresses set forth on the back cover of this Offer to Purchase and prior to the expiration date: o a letter of transmittal, or a facsimile thereof, properly completed and duly executed, together with any required signature guarantees, or, in the case of a book-entry transfer, an agent's message (see "-- Book-Entry Transfer" below), and any other required documents; and o either certificates representing the tendered shares or, in the case of tendered shares delivered in accordance with the procedures for book-entry transfer we describe below, a book-entry confirmation of that delivery (see "-- Book-Entry Transfer" below); or o the tendering shareholder must comply with the guaranteed delivery procedures we describe below. The valid tender of shares by you by one of the procedures described in this Section 2 will constitute a binding agreement between you and us on the terms of and subject to the conditions to the offer. Book-Entry Transfer. For purposes of the offer the depositary will establish accounts for the shares at The Depository Trust Company (the "book-entry transfer facility") within two business days after the date of this Offer to Purchase. Any financial institution that is a participant in the book-entry transfer facility's system may make book-entry delivery of shares by causing the book-entry transfer facility to transfer those shares into the depositary's account in accordance with the book-entry transfer facility's procedures for that transfer. Although delivery of shares may be effected through book-entry transfer into the depositary's account at the book-entry transfer facility, the letter of transmittal, or a facsimile thereof, properly completed and duly executed, with any required signature guarantees, or an agent's message, and any other required documents, must, in any case, be transmitted to, and received by, the depositary at one of the addresses set forth on the back cover of this Offer to Purchase prior to the expiration date, or the tendering shareholder must comply with the guaranteed delivery procedures we describe below. The confirmation of a book-entry transfer of shares into the depositary's account at the book-entry transfer facility as we describe above is a "book-entry confirmation." Delivery of documents to the book-entry transfer facility in accordance with the book-entry transfer facility's procedures will not constitute delivery to the depositary. The term "agent's message" means a message transmitted by the book-entry transfer facility to, and received by, the depositary and forming a part of a book-entry confirmation, stating that the book-entry transfer facility has received an express acknowledgment from the participant in the book-entry transfer facility tendering the shares that the participant has received and agrees to be bound by the terms of the letter of transmittal and that we may enforce that agreement against that participant. 6 The method of delivery of shares, the letter of transmittal and all other required documents, including delivery through the book-entry transfer facility, is at the election and risk of the tendering shareholder. Shares will be deemed delivered only when actually received by the depositary (including, in the case of a book-entry transfer, by book-entry confirmation). If you plan to make delivery by mail, we recommend that you deliver by registered mail with return receipt requested and obtain proper insurance. In all cases, sufficient time should be allowed to ensure timely delivery. Signature Guarantees. No signature guarantee will be required on a letter of transmittal for shares tendered thereby if: o the "registered holder(s)" of those shares signs that letter of transmittal and has not completed either the box entitled "Special Delivery Instructions" or the box entitled "Special Payment Instructions" on that letter of transmittal; and o those shares are tendered for the account of an "eligible institution." For purposes hereof, a "registered holder" of tendered shares will include any participant in the book-entry transfer facility's system whose name appears on a security position listing as the owner of those shares, and an "eligible institution" is a "financial institution," which term includes most commercial banks, savings and loan associations and brokerage houses, that is a participant in any of the following: o the Security Transfer Agents Medallion Program; o the New York Stock Exchange, Inc. Medallion Signature Guarantee Program; or o the Stock Exchanges Medallion Program. Except as we describe above, all signatures on any letter of transmittal for shares tendered thereby must be guaranteed by an eligible institution. See instructions 1 and 5 to the letter of transmittal. If the certificates for shares are registered in the name of a person other than the signer of the letter of transmittal, or if payment is to be made or certificates for shares not tendered or not accepted for payment are to be returned to a person other than the registered holder of the certificates surrendered, the tendered certificates must be endorsed or accompanied by appropriate stock powers, in either case signed exactly as the name or names of the registered holders or owners appear on the certificates, with the signatures on the certificates or stock powers guaranteed as aforesaid. See Instructions 1 and 5 to the letter of transmittal. Guaranteed Delivery. If you wish to tender shares in the offer and your certificates for shares are not immediately available or the procedures for book-entry transfer cannot be completed on a timely basis or time will not permit all required documents to reach the depositary prior to the expiration date, your tender may be effected if all the following conditions are met: o your tender is made by or through an eligible institution; o you ensure that a properly completed and duly executed notice of guaranteed delivery, substantially in the form we provide, is received by the depositary, as provided below, prior to the expiration date; and o you ensure that the depositary receives, at one of the addresses set forth on the back cover of this Offer to Purchase and within the period of three trading days after the date of execution of that notice of guaranteed delivery, either: o the certificates representing the shares being tendered together with (1) a letter of transmittal, or a facsimile thereof, relating thereto which has been properly completed and duly executed and includes all signature guarantees required thereon and (2) all other required documents; or o in the case of any book-entry transfer of the shares being tendered which is effected in accordance with the book-entry transfer procedures we describe above under "-- Book-Entry Transfer" within the same period (1) either a letter of transmittal, or a facsimile thereof, relating thereto which has been properly completed and duly executed and includes all signature guarantees required thereon or an agent's message, (2) a book-entry confirmation relating to that transfer and (3) all other required documents. 7 For these purposes, a "trading day" is any day on which the New York Stock Exchange is open for business. A notice of guaranteed delivery may be delivered by hand to the depositary or transmitted by facsimile transmission or mail to the depositary and must include a guarantee by an eligible institution in the form that notice of guaranteed delivery sets forth. Other Requirements. Notwithstanding any other provision hereof, payment for shares accepted for payment under the offer will in all cases be made only after timely receipt by the depositary of: o certificates representing, or a timely book-entry confirmation respecting, those shares; o a letter of transmittal, or a facsimile thereof, properly completed and duly executed, with any required signature guarantees thereon, or, in the case of a book-entry transfer, an agent's message in lieu of a letter of transmittal; and o any other documents the letter of transmittal requires. Accordingly, tendering shareholders may be paid at different times depending on when certificates representing, or book-entry confirmations respecting, their shares are actually received by the depositary. Under no circumstances will we pay interest on the purchase price of the shares we purchase under the offer, regardless of any extension of the offer or any delay in making that payment. Appointment. By executing a letter of transmittal, or a facsimile thereof, or, in the case of a book-entry transfer, by delivery of an agent's message in lieu of a letter of transmittal, you will irrevocably appoint our designees as your attorneys-in-fact and proxies in the manner the letter of transmittal sets forth, each with full power of substitution, to the full extent of your rights with respect to the shares tendered by you and accepted for payment by us and with respect to any and all other shares and other securities or rights issued or issuable in respect of such shares on or after the date of this Offer to Purchase. All these proxies will be considered coupled with an interest in the tendered shares and additional securities attributable thereto. This appointment will be effective when, and only to the extent that, we accept for payment shares tendered by you as provided herein. On that appointment, all prior powers of attorney, proxies and consents you have given with respect to the shares tendered by you and accepted for payment by us and all additional securities attributable thereto will, without further action, be revoked and no subsequent powers of attorney, proxies, consents or revocations may be given by you or on your behalf (and, if given, will not be effective). Our designees will thereby be empowered to exercise all your voting and other rights with respect to those shares and additional securities in respect of any annual, special or adjourned meeting of First Union's shareholders, actions by written consent without any such meeting or otherwise, as our designees in their sole discretion deem proper. We reserve the right to require that, in order for shares to be deemed validly tendered, we must be able, immediately on our acceptance for payment of those shares, to exercise full voting, consent and other rights with respect to those shares and the additional securities attributable thereto, including voting at any meeting of shareholders or acting by written consent without such a meeting. Determination of Validity. We will decide, in our sole discretion, all questions as to the validity, form, eligibility, including time of receipt, and acceptance of any tender of shares, and each such decision will be final and binding. We reserve the absolute right to reject any or all tenders we determine not to be in proper form or the acceptance for payment of or payment for which may, in the opinion of our counsel, be unlawful. We also reserve the absolute right to waive any defect or irregularity in the tender of any shares of any particular shareholder whether or not we waive similar defects or irregularities in the case of other shareholders. No tender of shares will be deemed to have been validly made until all defects or irregularities relating thereto have been cured or waived. None of the Purchaser, the depositary, the information agent or any other person will be under any duty to give notification of any defects or irregularities in tenders or incur any liability for failure to give any such notification. Our interpretation of the terms of and conditions to the offer, including the letter of transmittal and the instructions thereto, will be final and binding. By tendering shares to us you agree to accept all decisions we make concerning these matters and waive any right you might otherwise have to challenge those decisions. Backup U.S. Federal Income Tax Withholding. Under the U.S. federal income tax laws, payments in connection with the transaction may be subject to "backup withholding" at a rate of 28% unless a shareholder that holds shares: o provides a correct taxpayer identification number (which, for an individual shareholder, is the shareholder's social security number) and any other required information; or 8 o is a corporation or comes within other exempt categories and, when required, demonstrates this fact and otherwise complies with applicable requirements of the backup withholding rules. A shareholder that does not provide a correct taxpayer identification number may be subject to penalties imposed by the Internal Revenue Service. To prevent backup U.S. federal income tax withholding on cash payable under the offer, each shareholder should provide the depositary with his or her correct taxpayer identification number and certify that he or she is not subject to backup U.S. federal income tax withholding by completing the Substitute Internal Revenue Service Form W-9 included in the letter of transmittal. (See instruction 9 to the letter of transmittal.) Backup withholding is not an additional tax. Amounts so withheld can be refunded or credited against the federal income tax liability of the stockholder, provided appropriate information is forwarded to the IRS. FIRPTA Withholding. To prevent the withholding of federal income tax in an amount equal to 10% of the purchase price for each share tendered, tendering shareholders must complete the FIRPTA Affidavit included in the letter of transmittal certifying such shareholder's taxpayer identification number and address and that the shareholder is not a foreign person. (See instruction 9 to the letter of transmittal.) Section 3. Withdrawal Rights Except as this Section 3 otherwise provides, tenders of shares are irrevocable. You may withdraw shares that you have previously tendered under the offer according to the procedures we describe below at any time prior to the expiration date and, unless theretofore accepted for payment and paid for by us under the offer, you may also withdraw your previously tendered shares at any time after January 30, 2004. For a withdrawal to be effective, a written notice of withdrawal must: o be received in a timely manner by the depositary at one of its addresses listed on the back cover of this Offer to Purchase; and o specify the name of the person who tendered the shares to be withdrawn, the number of shares to be withdrawn and the name of the registered holder of the shares to be withdrawn, if different from the name of the person who tendered the shares. If certificates for shares have been delivered or otherwise identified to the depositary, then, prior to the physical release of those certificates, the serial numbers shown on those certificates must be submitted to the depositary and, unless an eligible institution has tendered those shares, an eligible institution must guarantee the signatures on the notice of withdrawal. If shares have been delivered in accordance with the procedures for book-entry transfer set forth in Section 2 of this Offer to Purchase, any notice of withdrawal must also specify the name and number of the account at the book-entry transfer facility to be credited with the withdrawn shares and otherwise comply with the book-entry transfer facility's procedures. Withdrawals of tenders of shares may not be rescinded, and any shares properly withdrawn will thereafter be deemed not validly tendered for purposes of the offer. Withdrawn shares may be retendered at any time prior to the expiration date by again following one of the procedures described in Section 2. We will decide, in our sole discretion, all questions as to the form and validity, including time of receipt, of notices of withdrawal, and each such decision will be final and binding. We also reserve the absolute right to waive any defect or irregularity in the withdrawal of shares by any shareholder, whether or not we waive similar defects or irregularities in the case of any other shareholder. None of the Purchaser, the depositary, the information agent or any other person will be under any duty to give notification of any defects or irregularities in any notice of withdrawal or incur any liability for failure to give any such notification. Section 4. Acceptance for Payment and Payment On the terms of and subject to the conditions to the offer, including, if we extend or amend the offer, the terms and conditions of any such extension or amendment, we will accept for payment and will pay promptly after the expiration date for all shares validly tendered prior to the expiration date and not properly withdrawn in accordance with section 3 of this Offer to Purchase, up to a maximum of 5,000,000 shares. We will decide, in our sole discretion, all questions as to the satisfaction of those terms and conditions, and each such 9 decision will be final and binding. See Sections 1 and 13 of this Offer to Purchase. We expressly reserve the right, in our sole discretion, to delay acceptance for payment of or payment for shares in order to comply in whole or in part with any applicable law. We will effect any such delays in compliance with Exchange Act Rule 14e-1(c), which relates to the obligation of a bidder to pay for or return tendered securities promptly after the termination or withdrawal of its offer. In all cases, we will pay for shares we have accepted for payment under the offer only after timely receipt by the depositary of: o certificates representing, or a timely book-entry confirmation respecting, those shares; o a letter of transmittal, or a facsimile thereof, properly completed and executed with any required signatures thereon or, in the case of a book-entry transfer, an agent's message; and o any other documents the letter of transmittal requires. Accordingly, tendering shareholders may be paid at different times depending on when certificates for shares or book-entry confirmations respecting shares are actually received by the depositary. The per share consideration we will pay to any shareholder under the offer will be the highest per share consideration we will pay to any other shareholder under the offer. For purposes of the offer, we will be deemed to have accepted for payment, and thereby purchased, shares properly tendered to us and not withdrawn as, if and when we give oral or written notice to the depositary of our acceptance for payment of those shares. On the terms of and subject to the conditions to the offer, we will pay for shares we have accepted for payment under the offer by depositing the purchase price therefor with the depositary. The depositary will act as agent for tendering shareholders for the purpose of receiving payment from us and transmitting payment to tendering shareholders whose shares we have accepted for payment. Upon the deposit of funds with the depositary for the purpose of making payment to validly tendering shareholders, our obligation to make such payment shall be satisfied and such tendering shareholders must thereafter look solely to the depositary for payment of the amounts owed to them by reason of acceptance for payment of shares pursuant to the offer. Under no circumstances will we pay interest on the purchase price for tendered shares, regardless of any extension of or amendment to the offer or any delay in paying for those shares. If we are delayed in our acceptance for payment of or payment for shares or are unable to accept for payment or pay for shares under the offer for any reason, then, without prejudice to our rights under the offer, but subject to our compliance with Exchange Act Rule 14e-1(c), the depositary nevertheless may retain tendered shares on our behalf and those shares may not be withdrawn except to the extent tendering shareholders are entitled to exercise, and duly exercise, the withdrawal rights described in Section 3 of this Offer to Purchase. If we do not purchase any tendered shares under the offer for any reason, then, as promptly as practicable following the expiration or termination of the offer and at no expense to tendering shareholders: o the depositary will return certificates it has received respecting tendered shares to the person who delivered those certificates to the depositary; and o in the case of tendered shares delivered by book-entry transfer into the depositary's account at the book-entry transfer facility in accordance with the procedures described in Section 2 of this Offer to Purchase, those shares will be credited to the account at the book-entry transfer facility from which that transfer had been previously made. Section 5. Certain U.S. Federal Income Tax Consequences Shareholders are urged to consult their own tax advisors as to the particular tax consequences to them of the offer, including the effect of state and local tax laws or foreign tax laws. This summary assumes that each shareholder is, for United States federal income tax purposes: (1) a citizen or resident of the United States; (2) a corporation or other entity taxable as a corporation created or organized in the United States or under the laws of the United States or of any political subdivision of the United States; or (3) an estate or trust, the income of which is includible in gross income for federal income tax purposes regardless of its source. 10 Your receipt of cash for shares accepted for payment in the offer will be a taxable transaction for U.S. federal income tax purposes under the Internal Revenue Code of 1986, as amended (the "Code"), and also may be a taxable transaction under applicable state, local or foreign income or other tax laws. Generally, for U.S. federal income tax purposes, you will recognize gain or loss equal to the difference between the amount of cash you receive and your adjusted tax basis in the shares purchased. Gain or loss will be calculated separately for each block of shares tendered and purchased under the offer. If you hold shares as capital assets, the gain or loss you recognize will be capital gain or loss, which will be long-term capital gain or loss if your holding period for the shares exceeds one year. If you are a non-corporate shareholder, long-term capital gains will be eligible for a maximum federal income tax rate of 15%. (Long-term capital gain of corporations is taxed to them at the same rate as ordinary income.) Under present law the ability to use capital losses to offset ordinary income is limited. You should consult your tax advisor in this regard. The foregoing discussion may not be applicable with respect to (1) shares received on the exercise of employee stock options or otherwise as compensation or (2) shareholders who are subject to special tax treatment under the Code, such as non-U.S. persons, life insurance companies, tax-exempt organizations and financial institutions. In addition, the foregoing discussion may not apply to a shareholder in light of individual circumstances, such as holding shares as a hedge or as part of a straddle or a hedging, constructive sale, integrated or other risk-reduction transaction. We base this discussion on present law, which is subject to change, possibly with retroactive effect. Shareholders may be subject to backup withholding at a 28% rate or FIRPTA withholding at a 10% rate on cash payments they receive in the offer unless certain information is provided to the depositary or an exemption applies. See Section 2 of this Offer to Purchase. Section 6. Price Range of the Shares The shares are traded on the New York Stock Exchange under the symbol "FUR." The following table sets forth, for each of the periods indicated, the high and low sales prices per share as reported by the New York Stock Exchange based on the Company's Annual Report on Form 10-K with respect to 2002 and 2001 and based on published financial sources with respect to all periods subsequent thereto. High Low ---- --- 2003 Quarter Ended October 1 - November 26, 2003 $1.87 $1.76 September 30 1.89 1.72 June 30 1.89 1.65 March 31 1.78 1.47 2002 Quarter Ended December 31 $2.30 $1.60 September 30 2.30 2.14 June 30 2.43 2.21 March 31 2.40 2.32 2001 Quarter Ended December 31 $2.56 $2.20 September 30 2.75 2.23 June 30 2.62 2.16 March 31 2.85 2.30 11 On November 26, 2003, the last trading day before First Union announced that it had entered into the Stock Purchase Agreement, the last sale price of First Union's shares reported by the New York Stock Exchange was $1.87. We urge shareholders to obtain a current market price for the shares. Section 7. Effect of the Offer on the Market for the Shares Following completion of this offer and our subsequent purchase of newly issued shares from the Company, we will own a minimum of approximately 17% of the outstanding shares (assuming no shares are tendered in the offer) and a maximum of approximately 32.2% of the outstanding shares (assuming the maximum number of shares are tendered). Accordingly, our votes could significantly influence the outcome of any matter requiring the vote of shareholders. However, in connection with the Stock Purchase Agreement, we will agree, except in certain circumstances, to vote our shares in proportion to the votes cast by all other voting shareholders. See Section 11 of this Offer to Purchase for more details on the covenant agreement. Our purchase of shares under the offer may also reduce the number of holders of shares and the number of shares that might otherwise trade publicly and could adversely affect the liquidity and market value of the remaining shares the public holds. In addition, our purchase of shares from the Company following expiration of the offer in accordance with the terms of the Stock Purchase Agreement, although at a purchase price higher than the purchase price in the offer, will decrease each remaining shareholder's percentage ownership of outstanding shares of the Company. Section 8. Information Concerning First Union General. First Union is an unincorporated association in the form of a business trust organized in Ohio under a Declaration of Trust dated August 1, 1961, as amended from time to time through March 2001, which has as its stated principal business activity the ownership and management of real estate investments. First Union operates as a real estate investment trust under Sections 856 through 860 of the Internal Revenue Code. Its executive offices are at 125 Park Avenue, 14th floor, New York, New York 10017, and its telephone number at that address is (212) 949-1373. Available Information. First Union is subject to the informational requirements of the Exchange Act and, in accordance therewith, is required to file reports relating to its business, financial condition and other matters. First Union must disclose in its proxy statements distributed to First Union's shareholders and filed with the Securities and Exchange Commission information as of particular dates concerning its directors and officers, their remuneration, stock options and other matters, the principal holders of its securities and any material interest of those persons in transactions with First Union. That information is available for inspection at the public reference facilities of the Securities and Exchange Commission at 450 Fifth Street, N.W., Washington, DC 20549. You can obtain copies of that information by mail, upon payment of the Securities and Exchange Commission's customary charges, by writing to the Securities and Exchange Commission's principal office at 450 Fifth Street, N.W., Washington, DC 20549. The Securities and Exchange Commission also maintains a web site that contains reports, proxy statements and other information regarding registrants that file electronically with it. You can find those reports, proxy statements and other information on the Securities and Exchange Commission's web site, http://www.sec.gov. Except as otherwise stated herein, the information concerning First Union contained herein has been taken from or based on publicly available documents on file with the Securities and Exchange Commission and other publicly available information. Although we do not have any knowledge that any such information is untrue, we do not take any responsibility for the accuracy or completeness of that information or for any failure by First Union to disclose events that may have occurred and may affect the significance or accuracy of any such information but that are unknown to us. Section 9. Information Concerning the Purchaser and Its Affiliates General. We are a Delaware limited liability company organized for the purpose of entering into the Stock Purchase Agreement and consummating the transactions contemplated thereby, including the offer. Our manager is Michael L. Ashner. The principal office of the Purchaser and Mr. Ashner is located at 100 Jericho Quadrangle, Suite 214, Jericho, New York 11753, and their telephone number is (516) 822-0022. 12 For certain information concerning Mr. Ashner, see Schedule I to this Offer to Purchase. Mr. Ashner owns 100,000 common shares and he intends to sell those shares prior to the expiration of the offer. Our most recent financial statement is attached as Schedule II. Except as otherwise set forth herein, (i) neither the Purchaser nor, to the best knowledge of the Purchaser, Mr. Ashner nor any affiliate, associate or majority-owned subsidiary of such persons beneficially owns or has a right to acquire any shares, (ii) neither the Purchaser nor, to the best knowledge of the Purchaser, Mr. Ashner nor any affiliate of the Purchaser, or any director, executive officer or subsidiary of any of the foregoing has effected any transaction in the shares within the past 60 days, (iii) neither the Purchaser nor, to the best knowledge of the Purchaser, Mr. Ashner nor any affiliate of the Purchaser has any contract, arrangement, understanding or relationship with any other person with respect to any securities of the Company, including but not limited to, contracts, arrangements, understandings or relationships concerning the transfer or voting thereof, joint ventures, loan or option arrangements, puts or calls, guarantees of loans, guarantees against loss or the giving or withholding of proxies, consents or authorizations, (iv) there have been no transactions or business relationships which would be required to be disclosed under the rules and regulations of the Securities and Exchange Commission between the Purchaser or, to the best knowledge of the Purchaser, Mr. Ashner, or any affiliate of the Purchaser on the one hand, and the Company or its officers, directors or affiliates, on the other hand, (v) there have been no contracts, negotiations or transactions between the Purchaser, or to the best knowledge of the Purchaser any affiliate of the Purchaser on the one hand, Mr. Ashner, and the Company or its affiliates, on the other hand, concerning a merger, consolidation or acquisition, tender offer or other acquisition of securities, an election of directors or a sale or other transfer of a material amount of assets, (vi) Mr. Ashner has not been convicted in a criminal proceeding during the past five years (excluding traffic violations or similar misdemeanors), and (vii) Mr. Ashner has not been a party to any judicial or administrative proceeding during the past five years (except for matters dismissed without sanction or settlement) that resulted in a judgment, decree, or final order enjoining him from future violations of, or prohibiting activities subject to, federal or state securities laws, or a finding of any violation of federal or state securities laws. Section 10. Source and Amount of Funds The offer is not conditioned on any financing arrangements. We will require funds totaling $11,500,000 in order to purchase the 5,000,000 shares we are seeking in the offer and an additional $13,000,000 to purchase the newly issued shares following the offer (assuming the maximum number of shares sought hereunder are tendered). We anticipate that an additional amount of approximately $300,000 may be required to pay related fees and expenses. We expect to pay shareholders for shares tendered out of funds available to us. Accordingly, no financing will be required, although we may choose to finance the purchase of the shares tendered. Section 11. Contacts and Transactions With First Union; Background of the Offer Background of the Offer. On July 7, 2003, we sent a letter to Neil Koenig, Interim Chief Executive Officer of the Company, proposing to make a substantial investment in the Company and have an affiliate of ours enter into a management advisory agreement with the Company to assume responsibility for the long term growth of the Company. More specifically, we proposed to purchase 9,656,000 common shares at a price of $2.00 per share resulting in our owning approximately 25% of the outstanding common shares and have the Company issue to us 10 year warrants entitling us to acquire 25% of any additional common shares issued by the Company at an exercise price of $2.00 per share. We also proposed that the Company grant us an exception from the limitations on share ownership contained in the Company's organizational documents. The letter included a number of corporate governance proposals and provided for Michael Ashner to assume the positions of Chairman and Chief Executive Officer of the Company. In July and August 2003, Michael Ashner had a number of discussions with representatives of the Company, and on September 3, 2003, we sent a letter to Neil Koenig containing a revised proposal. In the letter we proposed to purchase 9,335,000 common shares at a price of $2.57 per shares resulting in our owning approximately 43% of the outstanding common shares. The provisions of our July 7th letter providing for the issuance of warrants were deleted while the provisions of the prior letter on corporate governance, the advisory agreement and the waiver of share ownership limitations remained unchanged. 13 On September 7, 2003, we sent a letter was sent to Neil Koenig supplementing the proposal contained in our September 3rd letter. In the letter we proposed that, in lieu of purchasing 9,335,000 common shares from the Company, we would acquire 5,000,000 shares from the Company, subject to increase as described below, for $2.60 per share and make a public tender offer to acquire 5,000,000 shares at $2.30 per share. To the extent that the tender offer was not fully subscribed, the number of shares to be issued by the Company to us would be increased by the amount of the deficiency. The other terms of the September 3rd letter remained unchanged. During September and October, Michael Ashner had a number of discussions with members of the board of trustees of the Company. Following these discussions, we sent a letter on October 22, 2003 to Neil Koenig. The letter addressed various concerns raised by the board of trustees relating to the Company's property in Little Rock, Arkansas. On November 5 and 6, 2003, our legal advisors sent the Company a draft Stock Purchase Agreement and related agreements embodying the proposals contained in our September 7th letter. On November 12, 2003, Mr. Ashner, Mr. Koenig and Talton R. Embry, a trustee of the Company met, together with their respective legal advisors, to negotiate specific terms of the transaction and discuss the draft documents that had been circulated. On November 13, 2003 our legal advisors distributed revised draft documents reflecting issues discussed at the November 12th meeting. On November 20, 2003, Messrs. Ashner, Koenig and Embry and their respective legal advisors met again to discuss further issues relating to the transaction documents and on November 21 and 22, 2003, our legal advisors distributed revised transaction documents. On November 14, 2003 we executed a confidentiality agreement with the Company. On November 24, 2003 representatives of the Company notified us that the First Union board had met to evaluate the Stock Purchase Agreement and related agreements, and that, subject to further discussions with respect to certain matters, the board was prepared to approve the agreements. On November 25, 2003, after further discussion between Mr. Ashner and Mr. Embry, the First Union board met and approved the Stock Purchase Agreement and related agreements and on November 26, 2003 we and First Union signed the Stock Purchase Agreement. Transaction Documents. Stock Purchase Agreement. The following is a summary of the material provisions of the Stock Purchase Agreement entered into between us and the Company. For more complete information, please refer to the full text of the Stock Purchase Agreement, a copy of which is attached to the Company's current report on Form 8-K filed with the Securities and Exchange Commission on December 1, 2003. We encourage you to read the Stock Purchase Agreement in its entirety because it, and not this summary, is the legal document that governs the rights and obligations of the parties under the Stock Purchase Agreement. The Offer. Pursuant to the terms of the Stock Purchase Agreement, we agreed to commence this offer no later than December 5, 2003 on the terms set forth in this Offer to Purchase. The Company agreed to file with the Securities and Exchange Commission a Solicitation/Recommendation Statement on Schedule 14D-9, within five days after commencement of the offer, stating that the board has authorized the Stock Purchase Agreement and all the transactions contemplated thereby, and has determined that the Stock Purchase Agreement and such transactions are in the best interests of the shareholders but that the board is remaining neutral and is not taking a position as to whether the shareholders should tender their shares in the offer. We are entitled to include the board recommendation in our Offer to Purchase. Newly Issued Share Purchase. On the second business day following the expiration date of the offer, the Company will issue to us an additional amount of shares equal to 5,000,000 plus the difference between (x) 5,000,000 and (y) the number of shares purchased by us pursuant to the offer. However, the number of shares to be issued will not exceed the number that represents 19.9% of the total outstanding shares immediately prior to the purchase of such shares. The purchase price of the newly issued shares is $2.60 per share. Representations and Warranties. The Stock Purchase Agreement contains certain customary representations by the Company and us. In addition, the Company has represented that prior to the expiration of the offer, the Company's Bylaws will be amended to exempt us from the 9.8% ownership limit contained in the Bylaws so long as our ownership does not exceed 33% of the outstanding shares and subject to certain other restrictions designed to ensure the Company's continued eligibility to maintain its status as a real estate investment trust. 14 Board Composition. Concurrently with the purchase and sale of the newly issued shares, one individual designated by us will be appointed to the board of the Company by the existing board in the class of trustees to be determined by us. In addition, the existing board will appoint two trustees, proposed by us and acceptable to the board, that meet the independence requirements of Section 303A.03 of the New York Stock Exchange's Listed Company Manual, as amended November 3, 2003. Immediately following the appointments, two members of the existing board will resign. Concurrently with the closing of the newly issued share issuance, the existing board will appoint Michael L. Ashner as President and Chief Executive Officer of the Company and the current President and Chief Executive Officer of the Company will resign as such. During the period that either Mr. Ashner is serving as Chairman or Chief Executive Officer of the Company or Mr. Ashner and his affiliates are the beneficial owners of at least 10% of the outstanding shares, we will have the continuing non-exclusive right to nominate individuals to fill vacancies on the board created by the resignation, death or removal of trustees that would qualify as independent trustees and the exclusive right to designate individuals to fill vacancies created by the resignation, death or removal of non-independent trustees. Concurrently with the closing of the newly issued share issuance, an audit committee, a compensation committee and a nomination committee of the board will be established. The audit committee will consist solely of three independent trustees, one of whom will be an "audit committee financial expert", as defined by the rules promulgated under the Exchange Act. The compensation committee will consist solely of two independent trustees and the nominating committee will consist solely of four independent trustees. The nominating committee will be given the power and authority to approve nominations for vacancies in the board created by the death, removal or resignation of an independent trustee, upon proposal of such nominee by the members of the board that are not on the nominating committee or by us. At the closing of the newly issued share issuance, the newly reconstituted board will amend the Bylaws of the Company to remove any restrictions to the granting of such authority to the nominating committee. Bylaw Amendment. At the closing of the newly issued share issuance, the Bylaws of the Company will be amended to provide that all investments made by the Company in excess of $1,500,000 (other than investments in government insured securities) and all dispositions in excess of $2,000,000 will require prior majority board approval. Agreements to be Executed at or Before Closing. At the closing of the newly issued share issuance, (i) the Company and an affiliate of ours will enter into an advisory agreement (as described below) (ii) the Company and Mr. Ashner will enter into an exclusivity services agreement (as described below) and (iii) and we and the Company will enter into a post-closing covenant agreement (as described below). In addition, prior to the expiration of the offer, we and the Company will enter into an escrow agreement (as described below). Finally, concurrently with execution of the Stock Purchase Agreement, Mr. Ashner executed a guaranty in favor of the Company guaranteeing our payment of the aggregate offer price under the offer and aggregate purchase price for the maximum number of newly issued shares to be issued to us following consummation of the offer. Listing of Newly Issued Shares. As soon as practicable following commencement of the offer, the Company will file with the New York Stock Exchange an application to list the maximum number of newly issued shares issuable pursuant to the Stock Purchase Agreement, in accordance with the New York Stock Exchange's listing standards. Termination. The Stock Purchase Agreement may be terminated at any time prior to the closing as follows: o by mutual consent of us and the Company; o by either us or the Company if any governmental authority shall have issued any order which has the effect of making consummation of the offer or the newly issued share purchase illegal; o by us if, prior to the closing, (i) the board or any committee of the board shall have withdrawn or modified in a manner adverse to us its approval of the Stock Purchase Agreement, the newly issued share purchase or the board recommendation, or (ii) the board approves or recommends an acquisition proposal by a third party that the board determines to be superior to the transactions under the Stock Purchase Agreement, provided, that if we have not yet terminated the Stock Purchase Agreement we will no longer have the right to terminate as provided in clause (ii) above once the Company has notified us that the board has withdrawn its recommendation and approval of the acquisition proposal and has reinstated its approval of the Stock Purchase Agreement and board recommendation. 15 o by the Company, upon approval of the board, if (i) we shall have terminated the offer without having accepted any shares for payment or failed to pay for shares pursuant to the offer by March 15, 2004, unless such action or inaction was caused by or resulted from the failure of certain conditions of the offer that pertain to obligations of or representations by the Company or (ii) prior to the purchase of shares pursuant to the offer, the board determines, upon consultation with outside counsel, that it is required to do so by its fiduciary duties under applicable law. o by either us or the Company following the date which is 90 days after the entering by any governmental authority of a temporary restraining order or preliminary injunction, which has not been vacated or dismissed, that prohibits the consummation, in whole or in part, of the offer or the newly issued share issuance. Escrow Agreement. The following is a summary of the material provisions of the Escrow Agreement to be entered into between us, the Company and a designated escrow agent. For more complete information, please refer to the full text of the Escrow Agreement, a copy of which is attached to the Company's Current Report on Form 8-K filed with the Securities and Exchange Commission on December 1, 2003. We encourage you to read the Escrow Agreement in its entirety because it, and not this summary, is the legal document that governs the rights and obligations of the parties under the escrow agreement. Pursuant to the Stock Purchase Agreement, prior to the expiration of the offer, we and the Company will enter into an escrow agreement with a designated escrow agent. Concurrently with the execution of the escrow agreement, the Company will deliver to the escrow agent: o stock certificates representing the maximum 5,185,724 shares that can be purchased by us in the newly issued share purchase. The certificates will be designated in denominations of 5,000,000 shares (1 certificate); 20,000 shares (9 certificates) and 5,724 shares (1 certificate); o copies, executed by the Company, of the advisory agreement, the exclusivity services agreement and the purchaser post-closing covenant agreement; o fully executed resolutions of the board electing the trustees to serve on the board in accordance with the Stock Purchase Agreement (see "Stock Purchase Agreement - Board Composition" above); and o resignation of two existing members of the board in accordance with the Stock Purchase Agreement (see "Stock Purchase Agreement - Board Composition" above). Concurrently with the execution of the escrow agreement, we will deliver to the escrow agent: o $13,482,882 representing the aggregate purchase price for the maximum 5,185,724 shares that can be purchased by us in the newly issued share purchase; o copies, executed by us (or Michael L. Ashner, individually, as applicable) of the advisory agreement, the exclusivity services agreement and the post-closing covenant agreement; and o resolutions of the newly constituted board (i) establishing committees in accordance with the Stock Purchase Agreement and (ii) amending the Bylaws to provide for approval of the board prior to certain investments and dispositions by the Company (see "Stock Purchase Agreement - Bylaw Amendment" above) In addition, two business days before the expiration date of the offer we will deliver to the escrow agent $11,500,000 representing the aggregate purchase price for the maximum 5,000,000 shares sought by us under the offer. On the first business day immediately following the date that we accept shares for payment under the offer, we will deliver written notice to the escrow agent (with a copy to the Company) stating the number of shares so accepted and the number of additional shares to be issued to us following the offer. 16 Two business days after we accept shares for payment under the offer, the escrow agent will (i) distribute to each of us and the Company two original copies of each of the documents held in escrow, (ii) distribute to the Company the aggregate payment for the newly issued shares, (iii) distribute to the depositary for the offer payment for the shares accepted for payment in the offer; and (iv) distribute to us certificates representing the newly issued shares or less than but as close to such number of shares as possible given the denomination of certificates delivered to the escrow agent by the Company. If less than the total number of newly issued shares is so delivered to us, the Company will issue the certificates representing such shortfall to us within three business days. After such disbursements, the escrow agent shall return to us and the Company, respectively, all remaining funds and shares. We and the Company will each indemnify the escrow agent for one half of liabilities incurred by the escrow agent arising out of the escrow agent's duties under the escrow agreement, other than liabilities arising out of the gross negligence or willful misconduct of the escrow agent. Advisory Agreement. The following is a summary of the material provisions of the advisory agreement to be entered into between the Company and an affiliate of ours. For more complete information, please refer to the full text of the advisory agreement, a copy of which is attached to the Company's current report on Form 8-K filed with the Securities and Exchange Commission on December 1, 2003. We encourage you to read the advisory agreement in its entirety because it, and not this summary, is the legal document that governs the rights and obligations of the parties under the advisory agreement. Advisory Services. Pursuant to the Stock Purchase Agreement, the Company will enter into an advisory agreement with our affiliate. The advisory agreement will provide that the advisor will serve as investment and financial advisor to, and manage the day-to-day operations of, the Company. The Company will generally indemnify the advisor and its affiliates against liabilities arising from the advisory agreement (other than liabilities arising from the advisor's bad faith, gross negligence, willful misconduct or material breach of the advisory agreement). The advisor will generally indemnify the Company and its affiliates from liabilities arising from third party actions to the extent caused by the advisor's bad faith, gross negligence, willful misconduct or material breach by the advisor or its affiliates of the advisory agreement. Fees. Asset Management Fee. The advisor will be entitled to receive an annual asset management fee of 1% of the gross asset value of the Company up to $100 million, .75% of the gross asset value of the Company between $100 million and $250 million, .625% of the gross asset value of the Company between $250 million and $500 million and .50% of the gross asset value of the Company in excess of $500 million. The "gross asset value" of the Company will be determined, in the case of assets that are not readily ascertainable, by the most recent appraisal of such assets by an independent appraiser. Property and Construction Management Fees. The Company may, from time to time, enter into separate property management agreements and/or construction management agreements with third parties, the advisor or an affiliate of the advisor, pursuant to which the advisor or its affiliate will be entitled to a fee that does not exceed commercially reasonable rates and is approved by a majority of the independent trustees. Loan Servicing Fee. The advisor will receive loan servicing fees (not exceeding commercially reasonable rates approved by a majority of the independent trustees) for providing administrative and clerical services with respect to loans made by the Company to third parties. Incentive Fee. The advisor will be paid an incentive fee equal to 20% of all distributions to shareholders after the date of the advisory agreement in excess of the "Hurdle". The Hurdle is defined as (x) $71.3 million, increased by the net issuance price of all shares issued after the date of the advisory agreement, and decreased by the redemption price of all shares redeemed after the date of the advisory agreement, plus (y) a return on the amount, as adjusted, set forth in (x) equal to 7% per annum compounded annually. The incentive fee will be paid if and when such distributions are made, to the extent the incentive fee at such time exceeds the incentive fee already paid to advisor. Expenses. The advisor will pay all employment expenses of employees of the advisor, office expenses of the Company and the advisor, and certain administrative expenses relating to performance by the advisor of its duties under the advisory agreement. The Company will pay certain third party costs including professional fees and other expenses of the Company. 17 Term and Termination. The advisory agreement will continue for one year and will be automatically renewed for successive one-year periods unless terminated by either party. The Company may terminate the advisory agreement with or without cause upon 60 days notice to the advisor and the advisor may terminate the advisory agreement with or without cause upon 120 days notice to the Company. In addition, the Company may terminate the advisory agreement for cause. The advisor will have the right to terminate the advisory agreement at any time after the exclusivity services agreement or post-closing covenant agreement (each as described below) is, without our consent, terminated by the Company or voided, in each case, in whole or material part. Termination Fee. Upon termination of the advisory agreement, the Company will be obligated to pay the advisor a termination fee equal to 20% of the difference between (x) the Deemed Excess Share Distributions (defined as the difference between (A) the aggregate of all distributions to shareholders plus the net asset value of the Company as of the date of termination, and (B) the Hurdle, as of the date of termination) less (y) the amount of incentive fees paid up to such date to the advisor as described above, under "Incentive Fee". Post-Closing Covenant Agreement. The following is a summary of the material provisions of the post-closing covenant agreement entered into between us and the Company. For more complete information, please refer to the full text of the post-closing covenant agreement, a copy of which is attached to the Company's current report on Form 8-K filed with the Securities and Exchange Commission on December 1, 2003. We encourage you to read the covenant agreement in its entirety because it, and not this summary, is the legal document that governs the rights and obligations of the parties under the post-closing covenant agreement. Restrictions on Sales. We will agree that for a one year period following the date of the post-closing covenant agreement we will not sell, transfer or assign any shares owned by us other than to transferees agreed to in writing by the Company. Governing Instruments. The Company will include in its next annual proxy statement proposals to amend the Company's Declaration of Trust as necessary so that the terms of the Declaration of Trust will not conflict with any provisions of the post-closing covenant agreement, the Stock Purchase Agreement, or any other agreement contemplated thereby. These proposals will include, but not be limited to (i) a proposal to amend Section 8.1 of the Declaration of Trust to eliminate the classification of the Board into three classes and (ii) a proposal to amend the limitations set forth in Section 8.10 which restricts directors, officers or affiliates of a real estate company that competes for investments with the Company from serving as a trustee. The form and substance of each amendment proposed to shareholders will be determined by the board and reasonably acceptable to us. At the shareholders' meeting relating to the above-described proposals, we will vote all shares owned by us in favor of such proposals. In addition, the board will effect amendments to the by-laws of the Company as may be necessary to make the by-laws conform to the terms of the Covenant Agreement, the Stock Purchase Agreement and agreements which are annexed to the Stock Purchase Agreement. Each amendment adopted by the board will be in the form and substance proposed by the board, after our approval and the approval by a majority of the independent trustees. Corporate Governance Covenants. We will covenant with the Company that during the period from the date of the post-closing covenant agreement through the later of such time as (i) Michael L. Ashner is no longer serving as either Chairman or Chief Executive Officer of the Company and (ii) Mr. Ashner, the Purchaser or other affiliates of Mr. Ashner (the "Ashner affiliates") are no longer beneficial owners of at least 10% of the outstanding shares: o We will not propose, and will vote all of our shares against, any action which would impair the Company's status as a real estate investment trust unless a majority of independent trustees then in office determine that it would be in the Company's best interest to do so; o We will not take any affirmative action which would cause the shares to cease to be subject to the reporting requirements of the Exchange Act, except as approved by a majority of the independent trustees; o We will not take any action which would cause the shares to cease to be listed for trading on a major stock exchange, except as approved by a majority of the independent trustees; 18 o So long as the Company has 300 or more shareholders, we will not take any affirmative action which would cause the Company to fail to comply with the corporate governance provisions applicable to a listed company including, in all cases, Section 303A of the New York Stock Exchange Listing Standards (whether or not such rule would otherwise apply to the Company) except as otherwise approved by a majority of independent trustees. o To the extent compliance with the previous two described corporate governance covenants would require an amendment to the Company's Declaration of Trust, the board will call and hold a meeting to approve the amendment and the Purchaser and all Ashner affiliates will vote all their shares in favor of such amendment. o We will not take any action to amend the provisions of Section 11.13 of the Company's Declaration of Trust, which requires all transactions between the Company and the Company's officers, trustees or advisor (or their affiliates) to be approved by a majority of the board, including a majority of the independent trustees; o The Purchaser, Mr. Ashner and all Ashner affiliates will vote all their shares in proportion to the votes cast by other shareholders at any meeting of shareholders with respect to any proposal by such persons or any trustee of the Company affiliated with such persons relating to a transaction in which the Purchaser, Mr. Ashner or any Ashner affiliate have an economic interest. This restriction will not apply, however, to (i) the proposals described under "Proxy Statement" above, (ii) the election to the board of up to two nominees designated by the Purchaser, (iii) any election of qualified independent directors and (iv) any transaction approved and recommended by a majority of the independent trustees, if a majority of the independent trustees has determined that the Purchaser, Mr. Ashner and any Ashner affiliate may vote their shares in such manner as the Purchaser, Mr. Ashner and any Ashner affiliate determines. Termination. We will have the right to terminate the post-closing covenant agreement at any time after the advisory agreement (described above) or the exclusivity services agreement (described below) is terminated or voided in whole or in material part without our prior consent. Exclusivity Services Agreement. The following is a summary of the material provisions of the exclusivity services agreement to be entered into between us and the Company. For more complete information, please refer to the full text of the exclusivity services agreement, a copy of which is attached to the Company's Current Report on Form 8-K filed with the Securities and Exchange Commission on December 1, 2003. We encourage you to read the exclusivity services agreement in its entirety because it, and not this summary, is the legal document that governs the rights and obligations of the parties under the exclusivity services agreement. Pursuant to the exclusivity services agreement, Mr. Ashner will agree that any business opportunity related to real estate investments (other than as described below) offered to him during the time that he is serving either as an executive officer of the Company or as a member of the board will be offered to the Company. Neither Mr. Ashner nor his affiliates will be permitted to invest in a business opportunity that has been offered to the Company. None of the following are considered to be business opportunities for purposes of the exclusivity services agreement and Mr. Ashner is therefore permitted to participate in such transactions without regard to the terms of the exclusivity services agreement: o investments in equity securities of publicly traded real estate entities in an amount not to exceed 2% of the outstanding equity securities of such entity other than Atlantic Realty Trust in which Mr. Ashner will be permitted to own up to a 2.8% equity interest; o passive investments in real estate entities where the investment does not represent the greater of a 10% equity interest in the entity or $1,500,000; and o investments which relate to assets that are currently held by certain entities associated with Mr. Ashner that are set forth on a schedule to the exclusivity services agreement or investments in assets owned or controlled by such entities. 19 Termination. Mr. Ashner will have the right to terminate the exclusivity services agreement from and after the date that the advisory agreement or the post-closing covenant agreement is terminated by the Company or voided, in whole or material part. Section 12. Purpose of the Offer; Plans For First Union We are seeking to acquire shares in the offer, and in the newly issued share purchase, for investment purposes. We anticipate owning as much as approximately 32.2% of the outstanding shares of the Company as a result of the offer and the newly issued share purchase. Following the offer and newly issued share purchase, our affiliate will be retained by the Company to provide management and advisory services to the Company and to manage the day to day operations of the Company and our manager, Michael L. Ashner, will become President and Chief Executive Officer of the Company. As the external advisor to the Company, our affiliate will manage the Company's operations in a manner intended to maximize the value of the common shares, including by seeking attractive investment opportunities for the Company. Other than limitations pertaining to maintenance by the Company of its status as a real estate investment trust, the Company is not limited to any particular type of investment. Instead, our affiliate, as external advisor to the Company, will seek investments that offer the opportunity for positive returns to the Company and that are appropriate for the Company given its then existing investment portfolio, availability of capital and other relevant criteria. Except as this Offer to Purchase sets forth, we have no present plans or proposals that would relate to or result in any extraordinary corporate transaction involving First Union (such as a merger, reorganization or liquidation), any purchase, sale or transfer of a material amount of assets of First Union, any change in the board of trustees or management of First Union, any material change in First Union's indebtedness, capitalization or dividend policy, any other material change in First Union's corporate structure or business, a class of securities of First Union being delisted from a national securities exchange or ceasing to be authorized to be quoted in an automated quotations system operated by a national securities association or a class of equity securities of First Union becoming eligible for termination of registration under Section 12(g) of the Exchange Act. Section 13. Conditions to the Offer Notwithstanding any other term of the offer, we shall not be required to accept for payment or to pay for any shares tendered unless all authorizations or approvals of, or expirations of waiting periods imposed by, any court, administrative agency or other governmental authority necessary for the consummation of the transactions contemplated by the offer shall have been obtained or occurred on or before the expiration date. We shall not be required to accept for payment any shares tendered and may, subject to the terms of the Stock Purchase Agreement, terminate or amend the offer if at any time on or after the date of the offer and prior to the expiration date, any of the following conditions exists: (a) there shall have been instituted and remain pending any litigation, suit, claim, action or proceeding brought by any Governmental Authority (as defined in the Stock Purchase Agreement) of competent jurisdiction over the Company (i) challenging or seeking to make illegal or otherwise directly or indirectly restrain or prohibit the offer or the newly issued share purchase, (ii) seeking to impose material limitations on our ability to exercise effectively full rights of ownership of any shares, including, without limitation, the right to vote any shares acquired or owned by us on all matters properly presented to the shareholders of the Company, or (iii) seeking to require divestiture by us of any shares; (b) there shall have been any judgment, order or injunction entered or issued by any Governmental Authority of competent jurisdiction that results in any of the consequences referred to in clauses (i), (ii) and (iii) of paragraph (a) above; (c) the board, or any committee thereof, shall have withdrawn or modified, in a manner adverse to us, its approval of the Stock Purchase Agreement, the newly issued share purchase or the Board Recommendation (as defined in the Stock Purchase Agreement), shall have recommended that shareholders not tender their shares in the offer, shall have approved or recommended any Acquisition Proposal (as defined in the Stock Purchase Agreement) or any other material acquisition of shares other than the offer or the newly issued share purchase or (ii) the board, or any committee thereof, shall have resolved to do any of the foregoing; (d) any representation or warranty of the Company in the Stock Purchase Agreement shall not be true and correct as if such representation or warranty was made as of such time on or after the date of the Stock Purchase Agreement, except as would not have a Material Adverse Effect (as defined in the Stock Purchase Agreement) or prevent or materially delay consummation of the Transactions (as defined in the Stock Purchase Agreement), or otherwise prevent the Company from performing its obligations under the Stock Purchase Agreement; 20 (e) the Company shall have failed to perform any material obligation or to comply with any material agreement or covenant of the Company to be performed or complied with by it under the Stock Purchase Agreement; (f) the Stock Purchase Agreement shall have been terminated in accordance with its terms; (g) there shall have occurred a Material Adverse Effect; (h) we and the Company shall have agreed that we shall terminate the offer; (i) there shall have occurred any act of terrorism against the United States of America that shall have resulted in (i) the simultaneous closing of three or more domestic international airports for a period of at least 24 consecutive hours or (ii) the simultaneous closing of the three largest stock exchanges in the United States for a period of at least 6.5 consecutive trading hours; or (j) the application for the listing of the newly issued shares, as provided under the Stock Purchase Agreement, shall not have been approved, subject to notice of issuance of the newly issued shares. Section 14. Legal Matters General. Except as set forth in this Section 14, we are not aware of any filings, approvals or other actions by any domestic of foreign governmental or administrative agency that would be required prior to the acquisition of shares by us pursuant to the offer. Should any such approval other action be required, it is our present intention that such additional approval or action would be sought. While there is no present intent to delay the purchase of shares tendered pursuant to the offer pending receipt of any such additional approval or the taking of any such action, there can be no assurance that any such additional approval or action, if needed, would be obtained without substantial conditions or that adverse consequences might not result to the Company's business, or that certain parts of the Company's business might not have to be disposed of or held separate or other substantial conditions complied with in order to obtain such approval or action, any of which could cause us to elect to terminate the offer without purchasing shares thereunder. Our obligation to purchase and pay for shares is subject to certain conditions, including conditions related to the legal matters discussed in this Section 14. Antitrust. We do not believe that the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, is applicable to the acquisition of shares pursuant to the offer. Margin Requirements. The shares are "margin securities" under the regulations of the Board of Governors of the Federal Reserve System and, accordingly, such regulations are applicable to the offer. State Takeover Laws. A number of states have adopted anti-takeover laws which purport, to varying degrees, to be applicable to attempts to acquire securities of corporations which are incorporated in such states or which have substantial assets, security holders, principal executive offices or principal places of business therein. These laws are directed at the acquisition of corporations and not trusts. Accordingly, we do not believe that any anti-takeover laws apply to the transactions contemplated by the offer. Although we have not attempted to comply with any state anti-takeover statutes in connection with the offer, we reserve the right to challenge the validity or applicability of any state law allegedly applicable to the offer and nothing in this offer nor any action taken in connection herewith is intended as a waiver of such right. If any state anti-takeover statute is applicable to the offer, we might be unable to accept for payment or purchase shares tendered pursuant to the offer or be delayed in continuing or consummating the offer. In such case, we may not be obligated to accept for purchase or pay for any shares tendered. Section 15. Fees and Expenses We have retained National City Bank to act as depositary and MacKenzie Partners, Inc. to act as information agent in connection with the offer. We will pay the depositary and the information agent reasonably and customary compensation for their services in connection with the offer, plus reimbursement for out-of-pocket expenses, and will indemnify the depositary and the information agent against certain liabilities and expenses in connection therewith, including any liabilities under the federal securities laws. We will pay all costs and expenses of printing, publication and mailing of the offer. 21 Section 16. Miscellaneous The offer is not being made to, nor will tenders be accepted from or on behalf of, holders of shares in any jurisdiction in which the making of the offer or the acceptance thereof would not comply with the laws of that jurisdiction. In any jurisdiction the securities, blue sky or other laws of which require the offer to be made by a licensed broker or dealer, the offer is being made on our behalf by one or more registered brokers or dealers licensed under the laws of that jurisdiction. No person has been authorized to give any information or to make any representation on our behalf not contained herein or in the letter of transmittal and, if given or made, that information or representation must not be relied on as having been authorized. We have filed with the Securities and Exchange Commission a tender offer statement on Schedule TO, together with exhibits, furnishing additional information with respect to the offer, and may file amendments thereto. That schedule and any amendments thereto, including exhibits, should be available for inspection and copies should be obtainable in the manner described in Section 8 of this Offer to Purchase, except that this material will not be available at the regional offices of the Securities and Exchange Commission. FUR INVESTORS, LLC December 1, 2003 22 SCHEDULE I CERTAIN INFORMATION REGARDING THE PURCHASER'S SOLE MANAGER Mr. Ashner, age 51, serves as the Chief Executive Officer of Winthrop Financial Associates and its affiliates, a position he has held since January 15, 1996. Since August 2002, Mr. Ashner has also served as the Chief Executive Officer and a Director of Shelbourne Properties I, II and III, three separate publicly traded real estate investment trusts, each of which is currently being liquidated under a plan of liquidation. Since January 1, 2002, Mr. Ashner has also served as the Chief Executive Officer of the general partner of The Newkirk Master Limited Partnership, a Delaware limited partnership that owns various properties and other real-estate related assets. Since 1981, Mr. Ashner has been Chairman of Exeter Capital Corporation, a firm that has organized and administered real estate limited partnerships. Since August 2001, Mr. Ashner has also served as Chief Executive Officer of AP-Fairfield GP, LLC, the general partner of Fairfield Inn By Marriott Limited Partnership, an entity that owns and operates 50 Fairfield Inns. He has also served since February 2001 as Chief Executive Officer of GFB-AS Manager Corp., the general partner of various entities that own and operate 21 senior assisted-living facilities. Mr. Ashner also currently serves on the Boards of Directors of the following publicly traded companies: Greate Bay Hotel and Casino Inc., a hotel and casino operator, and NBTY Inc., a manufacturer, marketer and retailer of nutritional supplements. Mr. Ashner is a United States citizen. 23 SCHEDULE II INDEPENDENT AUDITORS' REPORT To the Member of FUR Investors, LLC We have audited the accompanying balance sheet of FUR Investors, LLC (a development stage company) as of November 25, 2003. This financial statement is the responsibility of the Company's management. Our responsibility is to express an opinion on this financial statement based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the balance sheet is free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the balance sheet. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall balance sheet presentation. We believe that our audit of the balance sheet provides a reasonable basis for our opinion. In our opinion, the balance sheet referred to above presents fairly, in all material respects, the financial position of FUR Investors, LLC as of November 25, 2003, in conformity with accounting principles generally accepted in the United States of America. November 25, 2003 TAUBER & BALSER, P.C. FUR INVESTORS, LLC (A DEVELOPMENT STAGE COMPANY) BALANCE SHEET NOVEMBER 25, 2003 ASSETS Cash $ 25,000 ============ LIABILITIES AND MEMBER'S EQUITY Accounts payable $ 7,350 ------------ Member's capital 25,000,000 Deficit accumulated during the development stage (7,350) Subscription receivable (24,975,000) ------------ 17,650 ------------ TOTAL LIABILITIES AND MEMBER'S EQUITY $ 25,000 ============ See independent auditors' report and accompanying notes to the financial statement. 2 FUR INVESTORS, LLC (A DEVELOPMENT STAGE COMPANY) NOTES TO FINANCIAL STATEMENT NOVEMBER 25, 2003 NOTE A - ORGANIZATION FUR Investors, LLC (the "Company"), a limited liability company, was organized on July 7, 2003 under the laws of the State of Delaware to acquire a common stock investment in First Union Real Estate Equity and Mortgage Investments, a publicly-traded entity. As of November 25, 2003 the Company is still in the development stage as principal operations have not yet commenced. NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Financial Statements The Company prepares its balance sheet on an accrual basis in accordance with generally accepted accounting principles. Income Taxes/Limited Liability Company The Company is taxed as a partnership for federal income tax purposes and, thus, no liability for income taxes is reflected in the accompanying balance sheet since income taxes are assessed at the individual member level. As a limited liability company, each member's liability is limited to amounts reflected in their respective member accounts. Use of Estimates The timely preparation of the balance sheet requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Actual results could differ from those estimates. NOTE C - SUBSCRIPTION RECEIVABLE The subscription receivable from the sole member of the Company is due on demand, accrues interest at the rate for demand loans as set forth in Internal Revenue Code Section 7872, and is unsecured. NOTE D - ALLOCATION OF PROFITS AND LOSSES Profits and losses of the Company are allocated 100% to its sole member. 3 IMPORTANT Any shareholder desiring to tender any or all of such shareholder's shares should, prior to December 29, 2003, either (i) mail, deliver or telecopy to National City Bank (the "depositary") at the address or facsimile number set forth below (a) a properly completed and duly executed Letter of Transmittal (a copy of which is enclosed with this Offer to Purchase, printed on cream paper), including any required signature guarantees, (b) the stock certificates representing the shares tendered and (c) any other documents required by the Letter of Transmittal, (ii) cause such shareholder's broker, dealer, commercial bank, trust company or custodian to tender applicable shares pursuant to the procedures for book-entry transfer or (iii) comply with the guaranteed delivery procedures. Via U.S. Mail: National City Bank Corporate Actions Processing Center P.O. Box 859208 161 Bay State Drive Braintree, MA 02185-9208 Via Overnight Courier: National City Bank Corporate Actions Processing Center 161 Bay State Drive Braintree, MA 02184 Via Hand: c/o The Depository Trust Company Transfer Agent Drop Service 55 Water Street Jeanette Park Entrance New York, NY 10041 or National City Bank Corporate Trust Operations 3rd Floor--North Annex 4100 West 150th Street Cleveland, OH 44135 Via Facsimile: 1-216-257-8508 Questions or requests for assistance or additional copies of this Offer to Purchase or the Letter of Transmittal may be directed to MacKenzie Partners, Inc. (the "Information Agent"), at the address or facsimile number set forth below. [LOGO] MACKENZIE PARTNERS, INC. 105 Madison Ave. New York, New York 10016 proxy@mackenziepartners.com (212) 929-5500 (call collect) or Toll-Free (800) 322-2885 EX-99.(A)(2) 4 e300797_ex99-a2.txt FORM OF LETTER OF TRANSMITTAL. Letter of Transmittal To Tender Common Shares of Beneficial Interest of First Union Real Estate Equity and Mortgage Investments Pursuant to the Offer to Purchase Dated December 1, 2003 by FUR Investors, LLC - -------------------------------------------------------------------------------- THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, EASTERN TIME, ON MONDAY, DECEMBER 29, 2003, UNLESS THE OFFER IS EXTENDED. - -------------------------------------------------------------------------------- The Depositary for the Offer is: NATIONAL CITY BANK By Registered Mail: By Hand: By Overnight Courier: National City Bank c/o The Depository Trust Company National City Bank Corporate Actions Processing Center Transfer Agent Drop Service Corporate Actions Processing Center P.O. Box 859208 55 Water Street 161 Bay State Drive 161 Bay State Drive Jeanette Park Entrance Braintree, MA 02184 Braintree, MA 02185-9208 New York, NY 10041
By Facsimile Transmission: (For Eligible Institutions Only) (216) 257-8508 Confirm Facsimile by Telephone Only: (For Eligible Institutions Only) (800) 622-6757 DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE, OR TRANSMISSIONS OF INSTRUCTIONS VIA A FACSIMILE NUMBER OTHER THAN AS SET FORTH ABOVE, WILL NOT CONSTITUTE A VALID DELIVERY. THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL SHOULD BE READ CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED.
- --------------------------------------------------------------------------------------------------------------------------- DESCRIPTION OF SHARES TENDERED - --------------------------------------------------------------------------------------------------------------------------- Name(s) and Address(es) of Registered Holder(s) (Please Fill In, if Blank, Exactly as Name(s) Share Certificate(s) and Shares Tendered Appear(s) on Certificates (Attach Additional Signed List if Necessary) * - --------------------------------------------------------------------------------------------------------------------------- Shares Total Number of Number of Certificate Shares Represented Shares Number(s) by Certificate(s) Tendered ** ---------------------------------------------------------- ---------------------------------------------------------- ---------------------------------------------------------- ---------------------------------------------------------- ---------------------------------------------------------- ---------------------------------------------------------- Total Shares - --------------------------------------------------------------------------------------------------------------------------- * Need not be completed if transfer is made by book-entry transfer. ** Unless otherwise indicated, it will be assumed that all shares described above are being tendered. See Instruction 4. - ---------------------------------------------------------------------------------------------------------------------------
This letter of transmittal is to be used either if certificates for shares (as defined below) are to be forwarded herewith or, unless an agent's message (as defined in Section 2 of the Offer to Purchase (as defined below)) is utilized, if delivery of shares is to be made by book-entry transfer to an account maintained by the depositary (as defined below) at the book-entry transfer facility (as defined in Section 2 of the Offer to Purchase) pursuant to the procedures set forth in Section 2 of the Offer to Purchase. Tendering shareholders whose certificates for shares are not immediately available or who cannot deliver either the certificates for, or a book-entry confirmation (as defined in Section 2 of the Offer to Purchase) with respect to, their shares and all other documents required hereby to the depositary prior to the expiration date (as defined in Section 1 of the Offer to Purchase) must tender their shares in accordance with the guaranteed delivery procedures set forth in Section 2 of the Offer to Purchase. See Instruction 2. Delivery of documents to the book-entry transfer facility does not constitute delivery to the depositary. NOTE: SIGNATURES MUST BE PROVIDED BELOW PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY |_| CHECK HERE IF SHARES ARE BEING TENDERED BY BOOK-ENTRY TRANSFER MADE TO AN ACCOUNT MAINTAINED BY THE DEPOSITARY WITH THE BOOK-ENTRY TRANSFER FACILITY AND COMPLETE THE FOLLOWING (ONLY PARTICIPANTS IN THE BOOK-ENTRY TRANSFER FACILITY MAY DELIVER SHARES BY BOOK-ENTRY TRANSFER): Name of Tendering Institution: ___________________________________________ Account Number: __________________________________________________________ Transaction Code Number: _________________________________________________ |_| CHECK HERE IF SHARES ARE BEING TENDERED PURSUANT TO A NOTICE OF GUARANTEED DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY, ENCLOSE A PHOTOCOPY OF SUCH NOTICE OF GUARANTEED DELIVERY AND COMPLETE THE FOLLOWING: Name(s) of Registered Owner(s): __________________________________________ Window Ticket Number (if any): ___________________________________________ Date of Execution of Notice of Guaranteed Delivery: ______________________ Name of Institution that Guaranteed Delivery: ____________________________ Account Number: __________________________________________________________ Transaction Code Number: _________________________________________________ Ladies and Gentlemen: The undersigned hereby tenders to FUR Investors, LLC., a Delaware limited liability company ("Purchaser"), the above-described common shares of beneficial interest, par value $1.00 per share (the "shares"), of First Union Real Estate Equity and Mortgage Investments, an Ohio business trust (the "Company"), upon the terms and subject to the conditions set forth in the Offer to Purchase, dated December 1, 2003 (the "Offer to Purchase"), and in this letter of transmittal (which, as amended or supplemented from time to time, together constitute the "offer"). The undersigned understands that Purchaser reserves the right to transfer or assign, in whole or from time to time in part, to one or more of its affiliates the right to purchase all or any portion of the shares tendered pursuant to the offer. Subject to, and effective upon, acceptance for payment of the shares tendered herewith in accordance with the terms of the offer, including, without limitation, Section 13 of the Offer to Purchase, the undersigned hereby sells, assigns and transfers to, or upon the order of, Purchaser all right, title and interest in and to all of the shares that are being tendered hereby (and any and all other shares or other securities issued, paid or distributed or issuable, payable or distributable in respect of such shares on or after December 1, 2003) and irrevocably constitutes and appoints National City Bank (the "depositary") the true and lawful agent, attorney-in-fact and proxy of the undersigned with respect to such shares (and any such other shares or securities), with full power of substitution (such power of attorney being deemed to be an irrevocable power coupled with an interest) to (a) deliver such certificates for such shares (and any such other shares or securities) or transfer ownership of such shares (and any such other shares or securities) on the account books maintained by the book- entry transfer facility, together, in either case, with appropriate evidences of transfer, to the depositary for the account of the Purchaser, (b) present such shares (and any such other shares or securities) for transfer on the books of the Company and, (c) receive all benefits and otherwise exercise all rights of beneficial ownership of such shares (and any such other shares or securities), all in accordance with the terms and subject to the conditions of the offer. The undersigned irrevocably appoints Michael L. Ashner and any other designees of Purchaser as such undersigned's agents, attorneys-in-fact and proxies, with full power of substitution, to the full extent of such shareholder's rights with respect to the shares tendered by such shareholder and accepted for payment by Purchaser. All such powers of attorney and proxies shall be considered irrevocable and coupled with an interest. Such appointment will be effective when, and only to the extent that, Purchaser accepts such shares for payment. Upon such acceptance for payment, all prior attorneys, proxies and consents given by such shareholder with respect to such shares will be revoked without further action, and no subsequent powers of attorney and proxies may be given nor any subsequent written consents executed (and, if given or executed, will not be deemed effective). The designees of Purchaser will, with respect to the shares for which such appointment is effective, be empowered to exercise all voting and other rights of such shareholder as they in their sole discretion may deem proper at any annual or special meeting of the Company's shareholders or any adjournment or postponement thereof, by written consent in lieu of any such meeting or otherwise. Purchaser reserves the right to require that, in order for the shares to be deemed validly tendered, immediately upon Purchaser's payment for such shares, Purchaser must be able to exercise full voting rights with respect to such shares (and any such other shares or securities), including, without limitation, voting at any meeting of shareholders. The undersigned hereby represents and warrants that (a) the undersigned has full power and authority to tender, sell, assign and transfer the undersigned's shares (and any and all other shares or other securities issued or issuable in respect thereof on or after December 1, 2003 ) tendered hereby, and (b) when the shares are accepted for payment by Purchaser, Purchaser will acquire good, marketable and unencumbered title to the shares (and any such other shares or securities), free and clear of all liens, restrictions, charges and encumbrances, and the same will not be subject to any adverse claim or right and will not have been transferred to Purchaser in violation of any contractual or other restriction on the transfer thereof. The undersigned, upon request, will execute and deliver any additional documents deemed by the depositary or Purchaser to be necessary or desirable to complete the sale, assignment and transfer of the shares tendered hereby (and any such other shares or securities). Except as stated in the Offer to Purchase this tender is irrevocable. All authority herein conferred or agreed to be conferred shall not be affected by and shall survive the death or incapacity of the undersigned and any obligation of the undersigned hereunder shall be binding upon the heirs, executors, administrators, personal representatives, successors and assigns of the undersigned. Tenders of shares made pursuant to the offer are irrevocable, except that shares tendered pursuant to the offer may be withdrawn at any time prior to the expiration date (as defined in the Offer to Purchase), and, unless theretofore accepted for payment by Purchaser pursuant to the offer, may also be withdrawn at any time after January 30, 2004. See Section 3 of the Offer to Purchase. The undersigned understands that tenders of shares pursuant to any of the procedures described in Section 2 of the Offer to Purchase and in the instructions hereto will constitute a binding agreement between the undersigned and Purchaser upon the terms and subject to the conditions set forth in the offer, including the undersigned's representation that the undersigned owns the shares being tendered. The undersigned understands that if more than 5,000,000 shares are validly tendered prior to the expiration of the offer and not validly withdrawn in accordance with Section 3 of the Offer to Purchase, shares so tendered and not validly withdrawn shall be accepted for payment on a pro rata basis according to the number of shares validly tendered and not withdrawn by the expiration date (with appropriate adjustments to avoid the purchase of fractional shares). Unless otherwise indicated herein under "Special Payment Instructions," please issue the check for the purchase price and/or issue or return any certificate(s) for shares not tendered or not accepted for payment in the name(s) of the registered holder(s) appearing under "Description of Shares Tendered." Similarly, unless otherwise indicated herein under "Special Delivery Instructions," please mail the check for the purchase price and/or any share certificate(s) not tendered or not accepted for payment (and accompanying documents, as appropriate) to the address(es) of the registered holder(s) appearing under "Description of shares Tendered." In the event that both the "Special Delivery Instructions" and the "Special Payment Instructions" are completed, please issue the check for the purchase price and/or any share certificate(s) not tendered or accepted for payment in the name of, and deliver such check and/or such share certificates to, the person or persons so indicated. Unless otherwise indicated herein under "Special Payment Instructions," please credit any shares tendered herewith by book-entry transfer that are not accepted for payment by crediting the account at the book-entry transfer facility designated above. The undersigned recognizes that Purchaser has no obligation, pursuant to the Special Payment Instructions, to transfer any shares from the name(s) of the registered holder(s) thereof if Purchaser does not accept for payment any of the shares so tendered. |_| CHECK HERE IF ANY SHARE CERTIFICATES REPRESENTING SHARES THAT YOU OWN HAVE BEEN LOST, STOLEN OR DESTROYED AND SEE INSTRUCTION 11. Number of Shares represented by lost, stolen or destroyed Share Certificates: __________________________________________________________________________ - ------------------------------------------------------------ ---------------------------------------------------- SPECIAL PAYMENT INSTRUCTIONS SPECIAL DELIVERY INSTRUCTIONS (See Instructions 1, 5, 6 and 7) (See Instructions 1, 5, 6 and 7) To be completed ONLY if certificate(s) for shares not To be completed ONLY if certificate(s) for tendered or accepted for payment and/or the check for the shares not tendered or accepted for payment and/or purchase price of shares accepted for payment are to be the check for the purchase price of shares issued in the name of someone other than the undersigned accepted for payment are to be sent to someone or if shares tendered by book-entry transfer which are not other than the undersigned or to the undersigned accepted for payment are to be returned by credit to an at an address other than that shown above. account maintained at the book-entry transfer facility other than designated above. Mail: |_| check |_| certificates to: Issue: |_| check |_| certificates to: Name _______________________________________________ (Please print) Name _______________________________________________________ (Please print) Address ____________________________________________ Address ____________________________________________________ ____________________________________________________ (Include zip code) ____________________________________________________________ (Include zip code) ____________________________________________________ (Taxpayer Identification or Social Security No.) ____________________________________________________________ (See Substitute Form W-9) (Taxpayer Identification or Social Security No.) (See Substitute Form W-9) |_| Credit shares tendered by book-entry transfer that are not accepted for payment to DTC to the account set forth above. ____________________________________________________________ (DTC Account No.) ____________________________________________________________ ____________________________________________________________ ____________________________________________________________ - ------------------------------------------------------------ ----------------------------------------------------
-------------------------------------------------------------------- SIGN HERE SIGN (and Complete Substitute Form W-9 and FIRPTA Affidavit) HERE -> ____________________________________________________________________ <- -> ____________________________________________________________________ <- (Signature(s) of Stockholder(s) Dated: _________________________, ____ (Must be signed by the registered holder(s) exactly as name(s) appear(s) on share certificate(s) or on a security position listing or by person(s) authorized to become registered holder(s) by share certificates and documents transmitted herewith. If signature is by trustees, executors, administrators, guardians, attorneys-in-fact, officers of corporations or others acting in a fiduciary or representative capacity, please provide the following information and see Instruction 5.) Name(s) ____________________________________________________________ ____________________________________________________________ (Please print) Capacity (full title) ______________________________________________ Address ____________________________________________________________ ____________________________________________________________________ ____________________________________________________________________ (Include zip code) Area Code and Telephone Number _____________________________________ Taxpayer Identification or Social Security No. _____________________ (See Substitute Form W-9) Guarantee of Signature(s) (See Instruction 1 and 5) Authorized Signature _______________________________________________ Name _______________________________________________________________ (Please print) Name of Firm _______________________________________________________ Address ____________________________________________________________ (Include Zip Code) Area Code and Telephone Number _____________________________________ Dated: _________________________, ____ -------------------------------------------------------------------- INSTRUCTIONS FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER 1. Guarantee of Signatures No signature guarantee is required on this letter of transmittal (a) if this letter of transmittal is signed by the registered holder(s) (which term, for purposes of this Instruction 1, includes any participant in the book-entry transfer facility's system whose name appears on a security position listing as the owner of the shares) of shares tendered herewith, unless such registered holder(s) has completed either the box entitled "Special Payment Instructions" or the box entitled "Special Delivery Instructions" on this letter of transmittal or (b) if such shares are tendered for the account of a firm that is a member in good standing of a recognized Medallion Program approved by the Securities Transfer Association, Inc., including the Security Transfer Agents Medallion Program, the New York Stock Exchange, Inc. Medallion Signature Guarantee Program or the Stock Exchanges Medallion Program, or is otherwise an "eligible guarantor institution," as that term is defined in Rule 17Ad-15 under the Securities Exchange Act of 1934, as amended (each, an "eligible institution"). In all other cases, all signatures on this letter of transmittal must be guaranteed by an eligible institution. See Instruction 5. 2. Requirements of Tender This letter of transmittal is to be completed by shareholders either if certificates are to be forwarded herewith or, unless an agent's message (as defined below) is utilized, if delivery of shares is to be made pursuant to the procedures for book-entry transfer set forth in section 2 of the Offer to Purchase. For a shareholder validly to tender shares pursuant to the offer, either (a) a letter of transmittal (or a facsimile thereof), properly completed and duly executed, together with any required signature guarantees, or, in the case of a book-entry transfer, an agent's message, and any other required documents, must be received by the depositary at one of its addresses set forth herein prior to the expiration date and either certificates for tendered shares must be received by the depositary at one of such addresses or shares must be delivered pursuant to the procedures for book-entry transfer set forth herein (and a book-entry confirmation must be received by the depositary), in each case prior to the expiration date, or (b) the tendering shareholder must comply with the guaranteed delivery procedures set forth below and in section 2 of the Offer to Purchase. Shareholders whose certificates for shares are not immediately available or who cannot deliver their certificates and all other required documents to the depositary or complete the procedures for book-entry transfer prior to the expiration date may tender their shares by properly completing and duly executing the notice of guaranteed delivery pursuant to the guaranteed delivery procedures set forth in section 2 of the Offer to Purchase. Pursuant to such procedures, (a) such tender must be made by or through an eligible institution, (b) a properly completed and duly executed notice of guaranteed delivery, substantially in the form provided by the Purchaser, must be received by the depositary prior to the expiration date and (c) the certificates for all tendered shares in proper form for transfer (or a book-entry confirmation with respect to all such shares), together with a letter of transmittal (or facsimile thereof), properly completed and duly executed, with any required signature guarantees, or, in the case of a book-entry transfer, an agent's message, and any other required documents, must be received by the depositary, in each case within three trading days after the date of execution of such notice of guaranteed delivery as provided in section 2 of the Offer to Purchase. A "trading day" is any day on which the New York Stock Exchange is open for business. The term "agent's message" means a message transmitted by the book-entry transfer facility to, and received by, the depositary and forming a part of a book-entry confirmation, which states that such book-entry transfer facility has received an express acknowledgment from the participant in the book-entry transfer facility tendering the shares that such participant has received and agrees to be bound by the terms of the letter of transmittal and that the Purchaser may enforce such agreement against such participant. THE METHOD OF DELIVERY OF SHARES, THIS LETTER OF TRANSMITTAL AND ALL OTHER REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH THE BOOK-ENTRY TRANSFER FACILITY, IS AT THE SOLE ELECTION AND RISK OF THE TENDERING SHAREHOLDER. SHARES WILL BE DEEMED DELIVERED ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY (INCLUDING, IN THE CASE OF A BOOK-ENTRY TRANSFER, BY BOOK-ENTRY CONFIRMATION). IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS RECOMMENDED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY. No alternative, conditional or contingent tenders will be accepted and no fractional shares will be purchased. All tendering shareholders, by execution of this letter of transmittal (or a facsimile hereof), waive any right to receive any notice of the acceptance of their shares for payment. 3. Inadequate Space If the space provided herein is inadequate, the certificate numbers and/or the number of shares should be listed on a separate schedule attached hereto. 4. Partial Tenders (Not Applicable to Shareholders Who Tender by Book-Entry Transfer) If fewer than all the shares represented by any certificate submitted to the depositary are to be tendered, fill in the number of shares that are to be tendered in the box entitled "Number of Shares Tendered." In any such case, new certificate(s) for the remainder of the shares that were evidenced by the old certificate(s) will be sent to the registered holder(s), unless otherwise provided in the appropriate box on this letter of transmittal, as soon as practicable after the acceptance for payment of, and payment for, the shares tendered herewith. All shares represented by certificates delivered to the depositary will be deemed to have been tendered unless otherwise indicated. 5. Signatures on Letter of Transmittal, Stock Powers and Endorsements If this letter of transmittal is signed by the registered holder(s) of the shares tendered hereby, the signature(s) must correspond with the name(s) as written on the face of the certificate(s) without any change whatsoever. If any of the shares tendered hereby are owned of record by two or more joint owners, all such persons must sign this letter of transmittal. If any shares tendered hereby are registered in different names on several certificates, it will be necessary to complete, sign and submit as many separate letters of transmittal as there are different registrations of certificates. If this letter of transmittal or any certificate or stock power is signed by a trustee, executor, administrator, guardian, attorney-in-fact, officer of a corporation or other person acting in a fiduciary or representative capacity, such person should so indicate when signing, and proper evidence satisfactory to the Purchaser of the authority of such person so to act must be submitted with this letter of transmittal. If this letter of transmittal is signed by the registered owner(s) of the shares tendered hereby, no endorsements of certificates or separate stock powers are required unless payment of the purchase price is to be made, or certificates for shares not tendered or accepted for payment are to be issued, to a person other than the registered owner(s). Signatures on any such certificates or stock powers must be guaranteed by an eligible institution. If this letter of transmittal is signed by a person other than the registered owner(s) of the shares tendered hereby, the certificate(s) representing such shares must be properly endorsed for transfer or accompanied by appropriate stock powers, in either case signed exactly as the name(s) of the registered owner(s) appear(s) on the certificates(s). The signature(s) on any such certificate(s) or stock power(s) must be guaranteed by an eligible institution. 6. Stock Transfer Taxes The Purchaser will pay any stock transfer taxes with respect to the transfer and sale of shares to it pursuant to the offer. If, however, payment of the purchase price is to be made to, or if shares not tendered or accepted for payment are to be registered in the name of, any person(s) other than the registered owner(s), or if shares tendered hereby are registered in the name(s) of any person(s) other than the person(s) signing this letter of transmittal, the amount of any stock transfer taxes (whether imposed on the registered owner(s) or such person(s)) payable on account of the transfer to such person(s) will be deducted from the purchase price unless satisfactory evidence of the payment of such taxes or exemption therefrom is submitted with this letter of transmittal. Except as provided in this Instruction 6, it will not be necessary for transfer tax stamps to be affixed to the certificates listed in this letter of transmittal. 7. Special Payment and Delivery Instructions If a check is to be issued in the name of, and/or certificates for shares not accepted for payment are to be returned to, a person other than the signer of this letter of transmittal or if a check is to be sent and/or such certificates are to be returned to a person other than the signer of this letter of transmittal or to an address other than that shown above, the appropriate boxes on this letter of transmittal should be completed. 8. Waiver of Conditions The Purchaser reserves the right, subject to the terms and conditions contained in the Stock Purchase Agreement dated as of November 26, 2003 among the Purchaser and First Union and to the applicable rules and regulations of the SEC, to waive any of the specified conditions of the offer, in whole or in part, in the case of any shares tendered. 9. Backup Withholding U.S. Persons A shareholder who or which is a United States citizen or resident alien individual, a domestic corporation, a domestic partnership, a domestic trust or a domestic estate (collectively, "United States persons") as those terms are defined in the Internal Revenue Code and Income Tax Regulations, should complete the following: BOX A SUBSTITUTE FORM W-9 In order to avoid backup withholding of U.S. federal income tax on payments of cash pursuant to the offer, a shareholder surrendering shares in the offer must, unless an exemption applies, provide the depositary with such shareholder's correct taxpayer identification number or social security number ("TIN") on Substitute Form W-9 below in this letter of transmittal and certify under penalties of perjury that such TIN is correct and that such shareholder is not subject to backup withholding. If a shareholder does not provide such shareholder's correct TIN or fails to provide the certifications described above, the Internal Revenue Service (the "IRS") may impose a $50 penalty on such shareholder and payment of cash to such shareholder pursuant to the offer may be subject to backup withholding of 28%. Backup withholding is not an additional income tax. Rather, the amount of the backup withholding can be credited against the U.S. federal income tax liability of the person subject to the backup withholding, provided that the required information is given to the IRS. If backup withholding results in an overpayment of tax, a refund may be obtained from the IRS. A tendering shareholder is required to give the depositary the TIN of the record owner of the shares being tendered. If the shares are held in more than one name or are not in the name of the actual owner, consult the enclosed "Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9" for additional guidance on which number to report. The box in part 3 of the Substitute Form W-9 may be checked if the tendering shareholder has not been issued a TIN and has applied for a TIN or intends to apply for a TIN in the near future. If the box in part 3 is checked, the shareholder or other payee must also complete the Certificate of Awaiting Taxpayer Identification Number below in order to avoid backup withholding. Notwithstanding that the box in part 3 is checked and the Certificate of Awaiting Taxpayer Identification Number is completed, the depositary will withhold 28% on all payments made prior to the time a properly certified TIN is provided to the depositary. However, such amounts will be refunded to such shareholder if a TIN is provided to the depositary within 60 days. BOX B FIRPTA Affidavit. To avoid potential withholding of tax pursuant to Section 1445 of the Internal Revenue Code, each shareholder who or which is a United States Person (as defined above) must certify, under penalties of perjury, the shareholder's TIN and address, and that the shareholder is not a foreign person. Tax withheld under Section 1445 of the Internal Revenue Code is not an additional tax. If withholding results in an overpayment of tax, a refund may be obtained from the IRS. Foreign Persons Foreign shareholders (i.e., shareholders that are not "United States persons" as defined in Instruction 9 above) should complete and sign the main signature form and the appropriate Form W-8, Certificate of Foreign Status, a copy of which may be obtained from the depositary, in order to avoid backup withholding. 10. Requests for Assistance or Additional Copies Questions and requests for assistance or additional copies of the Offer to Purchase, this letter of transmittal, the notice of guaranteed delivery and the Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9 may be directed to the information agent at its address set forth on the last page of this letter of transmittal. 11. Lost, Destroyed or Stolen Certificates If any certificate representing shares has been lost, destroyed or stolen, the shareholder should promptly notify the information agent at the phone number this letter of transmittal provides. The shareholder will then be instructed by the information agent as to the steps that must be taken in order to replace the certificate. This letter of transmittal and related documents cannot be processed until the procedures for replacing lost or destroyed certificates have been followed. IMPORTANT: THIS LETTER OF TRANSMITTAL (OR A MANUALLY SIGNED FACSIMILE HEREOF), TOGETHER WITH ANY REQUIRED SIGNATURE GUARANTEES, OR, IN THE CASE OF A BOOK-ENTRY TRANSFER, AN AGENT'S MESSAGE, AND ANY OTHER REQUIRED DOCUMENTS, MUST BE RECEIVED BY THE DEPOSITARY PRIOR TO THE EXPIRATION DATE AND EITHER CERTIFICATES FOR TENDERED SHARES MUST BE RECEIVED BY THE DEPOSITARY OR SHARES MUST BE DELIVERED PURSUANT TO THE PROCEDURES FOR BOOK-ENTRY TRANSFER, IN EACH CASE PRIOR TO THE EXPIRATION DATE, OR THE TENDERING STOCKHOLDER MUST COMPLY WITH THE PROCEDURES FOR GUARANTEED DELIVERY. - -------------------------------------------------------------------------------------------------------------------------- PAYER'S NAME: National City Bank, as Depositary - -------------------------------------------------------------------------------------------------------------------------- Part 1 - Please provide your TIN in the box BOX A at the right and certify by signing and Social Security Number dating below. OR Employer Identification Number SUBSTITUTE ______________________________ Form W-9 ----------------------------------------------------------------------------------- Department of the Treasury Part 2 - Certification - Under penalties of perjury, I Part 3 Internal Revenue Service certify that: (1) The number shown on this form is my correct Awaiting TIN |_| Payer's Request for Taxpayer Taxpayer Identification Number (or I am waiting for a number Identification Number to be issued to me) and ("TIN") ----------------------------------------------------------------------------------- (2) I am not subject to withholding because (a) I am exempt from backup withholding, or (b) I have not been notified by the Internal Revenue Service (the "IRS") that I am subject to backup withholding as a result of a failure to report all interest or dividends, or (c) the IRS has notified me that I am no longer subject to backup withholding. ----------------------------------------------------------------------------------- Certification instructions - You must cross out item (2) in Part 2 above if you have been notified by the IRS that you are subject to backup withholding because of under-reporting interest or dividends on your tax return. However, if after being notified by the IRS that you were subject to backup withholding you received another notification from the IRS stating that you are no longer subject to backup withholding, do not cross out such item (2). - -------------------------------------------------------------------------------------------------------------------------- Signature: _____________________________________________________________________ Date: ___________________________________ - -------------------------------------------------------------------------------------------------------------------------- NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING OF 28% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE OFFER. PLEASE REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS. YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE BOX IN PART 3 OF SUBSTITUTE FORM W-9. - -------------------------------------------------------------------------------------------------------------------------- CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER I certify under penalties of perjury that a taxpayer identification number has not been issued to me, and either (a) I have mailed or delivered an application to receive a taxpayer identification number to the appropriate Internal Revenue Service Center or Social Security Administration Office, or (b) I intend to mail or deliver an application in the near future. I understand that if I do not provide a taxpayer identification number by the time of payment, 28% of all reportable payments made to me will be withheld. Signature: _____________________________________________________________________ Date: ___________________________________ - -------------------------------------------------------------------------------------------------------------------------- - -------------------------------------------------------------------------------------------------------------------------- BOX B FIRPTA AFFIDAVIT (See Instruction 9 - Box B) Under Section 1445(e)(5) of the Internal Revenue Code and Treas. Reg. l.1445-11T(d), a transferee must withhold tax equal to 10% of the amount realized with respect to certain transfers of an interest in a trust if 50% or more of the value of its gross assets consists of U.S. real property interests and 90% or more of the value of its gross assets consists of U.S. real property interests plus cash equivalents, and the holder of the trust interest is a foreign person. To inform the Purchaser that no withholding is required with respect to the shareholder's interest in the trust, the person signing this Letter of Transmittal hereby certifies the following under penalties of perjury; (i) Unless this box [ ] is checked, the shareholder, if an individual, is a U.S. citizen or a resident alien for purposes of U.S. income taxation, and if other than an individual, is not a foreign corporation, foreign trust, foreign estate or foreign trust (as those terms are define in the Internal Revenue Code and Income Tax Regulations); (ii) the shareholder is not a disregarded entity as defined in Income Tax Regulations; (iii) the shareholder's U.S. social security number (for individuals) or employer identification number (for non-individuals) is correctly printed in the signature box on the front of this Letter of Transmittal; and (iv) the shareholder's home address (for individuals), or office address (for non-individuals), is correctly printed (or corrected) on the front of this Letter of Transmittal. If a corporation, the jurisdiction of incorporation is _____________. - --------------------------------------------------------------------------------------------------------------------------
This letter of transmittal, certificates for shares and any other required documents should be sent or delivered by each shareholder of First Union or such shareholder's broker, dealer, commercial bank, trust company or other nominees to the depositary at one of its addresses set forth below. The Depositary for the Offer is: National City Bank By Registered Mail: By Hand: By Overnight Courier: National City Bank c/o The Depository Trust Company National City Bank Corporate Actions Processing Center Transfer Agent Drop Service Corporate Actions Processing Center P.O. Box 859208 55 Water Street 161 Bay State Drive 161 Bay State Drive Jeanette Park Entrance Braintree, MA 02184 Braintree, MA 02185-9208 New York, NY 10041
By Facsimile Transmission: (For Eligible Institutions Only) (216) 257-8508 Confirm Facsimile by Telephone Only: (For Eligible Institutions Only) (800) 622-6757 DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE OR TRANSMISSION OF INSTRUCTIONS VIA FACSIMILE TO A NUMBER OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY TO THE DEPOSITARY. Questions and requests for assistance may be directed to the information agent at the address set forth below. Additional copies of the Offer to Purchase, this letter of transmittal and the notice of guaranteed delivery may be obtained from the information agent. You may also contact your broker, dealer, commercial bank, trust company or other nominee for assistance concerning the offer. The Information Agent for the offer is: [LOGO] MACKENZIE PARTNERS, INC. 105 Madison Ave. New York, New York 10016 proxy@mackenziepartners.com (212) 929-5500 (call collect) or Toll-Free (800) 322-2885 EX-99.(A)(3) 5 e300797_ex99-a3.txt FORM OF NOTICE OF GUARANTEED DELIVERY. Notice of Guaranteed Delivery to Tender Common Shares of Beneficial Interest of First Union Real Estate Equity and Mortgage Investments to FUR Investors, LLC This notice of guaranteed delivery or one substantially equivalent hereto must be used to accept the Offer (as defined below) if certificates for shares (as defined below) are not immediately available or the certificates for Shares and all other required documents cannot be delivered to National City Bank (the "depositary") on or prior to the expiration date (as defined in the Offer to Purchase) or if the procedure for delivery by book-entry transfer cannot be completed on a timely basis. This instrument may be delivered by hand or transmitted by facsimile transmission or mailed to the depositary. See Section 2 of the Offer to Purchase. The Depositary for the Offer is: National City Bank By Registered Mail: By Hand: By Overnight Courier: National City Bank c/o The Depository Trust Company National City Bank Corporate Actions Processing Center Transfer Agent Drop Service Corporate Actions Processing Center P.O. Box 859208 55 Water Street 161 Bay State Drive 161 Bay State Drive Jeanette Park Entrance Braintree, MA 02184 Braintree, MA 02185-9208 New York, NY 10041
By Facsimile Transmission: (For Eligible Institutions Only) (216) 257-8508 Confirm Facsimile by Telephone Only: (For Eligible Institutions Only) (800) 622-6757 Delivery of this notice of guaranteed delivery to an address other than as set forth above or transmission of instructions via facsimile transmission other than as set forth above will not constitute a valid delivery to the depositary. This form is not to be used to guarantee signatures. If a signature on a letter of transmittal is required to be guaranteed by an eligible institution under the instructions thereto, such signature guarantee must appear in the applicable space provided in the signature box in the Letter of transmittal. The guarantee on the reverse side must be completed. Ladies and Gentlemen: The undersigned hereby tender(s) to FUR Investors, LLC, a Delaware limited liability company, upon the terms and subject to the conditions set forth in the Offer to Purchase, dated December 1, 2003 (the "Offer to Purchase"), and in the related letter of transmittal (which, as amended or supplemented from time to time, together constitute the "Offer"), receipt of which is hereby acknowledged, the number of common shares of beneficial interest, par value $1.00 per share (the "shares"), of First Union Real Estate Equity and Mortgage Investments, an Ohio business trust, indicated below pursuant to the guaranteed delivery procedure set forth in Section 2 of the Offer to Purchase. - -------------------------------------------------------------------------------- Number of Tendered Shares: _____________________________________________________ ________________________________________________________________________________ Certificate No.(s) (if available): ________________________________________________________________________________ ________________________________________________________________________________ Check box if shares will be tendered by book-entry transfer: |_| Name of Tendering Institution: _________________________________________________ The Depositary Trust Company Account Number: ___________________________________ Dated: __________________________________________________________________, 200__ Name(s) of Record Holder(s): ________________________________________________________________________________ ________________________________________________________________________________ (Please Print) Address(es): ___________________________________________________________________ ________________________________________________________________________________ (Zip Code) Area Code and Telephone No.(s): ________________________________________________ ________________________________________________________________________________ SIGN HERE Signature(s): __________________________________________________________________ ________________________________________________________________________________ - -------------------------------------------------------------------------------- GUARANTEE (NOT TO BE USED FOR SIGNATURE GUARANTEE) The undersigned, a firm which is a bank, broker, dealer, credit union, savings association or other entity which is a member in good standing of a recognized Medallion Program approved by the Securities Transfer Association Inc., including the Securities Transfer Agents Medallion Program (STAMP), the Stock Exchange Medallion Program (SEMP) and the New York Stock Exchange Medallion Signature Program (MSP) or any other "eligible guarantor institution" (as such term is defined in Rule 17Ad-15 under the Securities Exchange Act of 1934, as amended), guarantees (1) that the above named person(s) "own(s)" the shares tendered hereby within the meaning of Rule 14e-4 under the Exchange Act, (2) that such tender of shares complies with Rule 14e-4 under the Exchange Act and (3) to deliver to the depositary either the certificates evidencing all tendered shares, in proper form for transfer, or a book-entry confirmation (as defined in the Offer to Purchase) with respect to such shares, in either case, together with the letter of transmittal (or a facsimile thereof), properly completed and duly executed, with any required signature guarantees or an agent's message (as defined in the Offer to Purchase) in the case of a book-entry delivery, and any other required documents, all within three business days after the date hereof. The eligible guarantor institution that completes this form must communicate the guarantee to the depositary and must deliver the letter of transmittal and share certificates to the depositary within the time period indicated herein. Failure to do so may result in financial loss to such eligible guarantor institution. - -------------------------------------------------------------------------------- Name of Firm: __________________________________________________________________ ________________________________________________________________________________ (Authorized Signature) Address: _______________________________________________________________________ ________________________________________________________________________________ (Zip Code) Title: _________________________________________________________________________ Name: __________________________________________________________________________ (Please Print or Type) Area Code and Telephone No.: ___________________________________________________ Dated: ________________________________, 200__ - -------------------------------------------------------------------------------- NOTE: DO NOT SEND CERTIFICATES FOR SHARES WITH THIS NOTICE. SHARE CERTIFICATES SHOULD BE SENT WITH YOUR LETTER OF TRANSMITTAL. EX-99.(A)(4) 6 e300797_ex99-a4.txt FORM OF LETTER TO BROKERS. Offer to Purchase for Cash up to 5,000,000 Common Shares of Beneficial Interest of First Union Real Estate Equity and Mortgage Investments at $2.30 Net Per Share by FUR Investors, LLC - -------------------------------------------------------------------------------- THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, EASTERN TIME, ON MONDAY, DECEMBER 29, 2003, UNLESS THE OFFER IS EXTENDED. - -------------------------------------------------------------------------------- December 1, 2003 To Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees: We have been appointed by FUR Investors, LLC, a Delaware limited liability company ("Purchaser"), to act as Information Agent in connection with Purchaser's offer to purchase up to 5,000,000 common shares of beneficial interest, par value $1.00 per share (the "shares"), of First Union Real Estate Equity and Mortgage Investments (the "Company"), at a purchase price of $2.30 per share, net to the seller in cash (subject to applicable withholding of United States federal, sate and local taxes), less the per share amount of distributions, if any, declared and payable by the Company between December 1, 2003 and the expiration date of the offer, without interest thereon, upon the terms and subject to the conditions set forth in the Offer to Purchase, dated December 1, 2003 (the "Offer to Purchase"), and in the related letter of transmittal (which, as amended or supplemented from time to time, together constitute the "Offer") enclosed herewith. Holders of shares whose certificates for such shares are not immediately available or who cannot deliver their share certificates and all other required documents to the depositary (as defined below) on or prior to the expiration date (as defined in the Offer to Purchase), or who cannot complete the procedure for book entry transfer on a timely basis, must tender their shares according to the guaranteed delivery procedures set forth in Section 2 of the Offer to Purchase. Please furnish copies of the enclosed materials to those of your clients for whose accounts you hold shares registered in your name or in the name of your nominee. Enclosed herewith for your information and forwarding to your clients are copies of the following documents: 1. The Offer to Purchase, dated December 1, 2003. 2. The letter of transmittal to tender shares for your use and for the information of your clients. Facsimile copies of the letter of transmittal may be used to tender shares. 3. The Notice of Guaranteed Delivery for shares to be used to accept the Offer if share certificates are not immediately available or if such certificates and all other required documents cannot be delivered to National City Bank (the "depositary") on or prior to the expiration date or if the procedure for book-entry transfer cannot be completed by the expiration date. 4. A printed form of letter which may be sent to your clients for whose accounts you hold shares registered in your name or in the name of your nominee, with space provided for obtaining such clients' instructions with regard to the Offer. 5. Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9. 6. A return envelope addressed to National City Bank, as depositary. Your prompt action is requested. We urge you to contact your clients as promptly as possible. Please note that the Offer and withdrawal rights expire at 12:00 midnight, Eastern time, on December 29, 2003, unless the Offer is extended. CERTAIN CONDITIONS TO THE OFFER ARE DESCRIBED IN SECTION 13 TO THE OFFER TO PURCHASE. WE URGE YOU TO CONTACT YOUR CLIENTS AS PROMPTLY AS POSSIBLE. PLEASE NOTE THAT THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON MONDAY, DECEMBER 29, 2003, UNLESS THE OFFER IS EXTENDED. The Offer is being made pursuant to the terms of a Stock Purchase Agreement dated as of November 26, 2003, between the Purchaser and the Company. In order to take advantage of the Offer, (1) a duly executed and properly completed letter of transmittal (or a facsimile thereof) and any required signature guarantees, or an agent's message (as defined in the Offer to Purchase) in connection with a book-entry delivery of shares, and other required documents should be sent to the depositary, and (2) either share certificates representing the tendered shares should be delivered to the depositary or such shares should be tendered by book-entry transfer and a book-entry confirmation (as defined in the Offer to Purchase) with respect to such shares should be delivered to the depositary, all in accordance with the instructions set forth in the letter of transmittal and the Offer to Purchase. Holders of shares whose share certificates are not immediately available or who cannot deliver their share certificates and all other required documents to the depositary on or prior the expiration date of the Offer, or who cannot complete the procedure for delivery by book-entry transfer on a timely basis, must tender their shares according to the guaranteed delivery procedures set forth in Section 3 of the Offer to Purchase. In all cases, payment for shares accepted for payment pursuant to the offer will be made only after timely receipt by the depositary of (1) the certificates for (or a timely book-entry confirmation (as defined in the Offer to Purchase) with respect to) such shares, (2) a letter of transmittal (or a facsimile thereof), properly completed and duly executed, with any required signature guarantees, or, in the case of a book-entry transfer effected pursuant to the procedures set forth in section 2 of the Offer to Purchase, an agent's message (as defined in the Offer to Purchase), and (3) any other documents required by the letter of transmittal. Accordingly, tendering shareholders may be paid at different times depending on when certificates for shares or book-entry confirmations with respect to shares are actually received by the depositary. UNDER NO CIRCUMSTANCES WILL INTEREST BE PAID ON THE PURCHASE PRICE OF THE SHARES TO BE PAID BY THE PURCHASER, REGARDLESS OF ANY EXTENSION OF OR AMENDMENT TO THE OFFER OR ANY DELAY IN PAYING FOR SUCH SHARES. The Purchaser will not pay any commissions or fees to any broker, dealer or other person (other than the depositary and MacKenzie Partners, Inc. (the "information agent") (as described in the Offer to Purchase)) for soliciting tenders of shares pursuant to the Offer. The Purchaser will, however, upon request, reimburse you for customary clerical and mailing expenses incurred by you in forwarding any of the enclosed materials to your clients. The Purchaser will pay or cause to be paid any stock transfer taxes payable on the transfer of shares to it, except as otherwise provided in Instruction 6 of the Letter of Transmittal. Inquiries you may have with respect to the Offer should be addressed to the information agent or the undersigned, at the respective addresses and telephone numbers set forth on the back cover of the Offer to Purchase. Additional copies of the enclosed materials may be obtained from the information agent. Very truly yours, MACKENZIE PARTNERS, INC. Nothing contained herein or in the enclosed documents shall render you or any other person, the agent of the Purchaser, the depositary or the information agent, or any affiliate of any of them, or authorize you or any other person to make any statement or use any document on behalf of any of them in connection with the Offer other than the enclosed documents and the statements contained therein. EX-99.(A)(5) 7 e300797_ex99-a5.txt FORM OF LETTER TO CLIENTS. Offer to Purchase for Cash Up to 5,000,000 Common Shares of Beneficial Interest of First Union Real Estate Equity and Mortgage Investments at $2.30 Net Per Share by FUR Investors, LLC - -------------------------------------------------------------------------------- THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, EASTERN TIME, ON MONDAY, DECEMBER 29, 2003, UNLESS THE OFFER IS EXTENDED. - -------------------------------------------------------------------------------- December 1, 2003 To Our Clients: Enclosed for your consideration is an Offer to Purchase dated December 1, 2003 (the "Offer to Purchase"), and the related letter of transmittal, relating to an offer by FUR Investors, LLC, a Delaware limited liability company ("the Purchaser"), to purchase up to 5,000,000 common shares of beneficial interest, par value $1.00 per share (the "shares"), of First Union Real Estate Equity and Mortgage Investments, an Ohio business trust ("First Union"), at a purchase price of $2.30 per share, net to the seller, in cash (subject to applicable withholding of United States federal, state and local taxes) less the per share amount of distributions, if any, declared and payable by First Union between the date hereof and the expiration date of the offer, without interest thereon, upon the terms and subject to the conditions set forth in the Offer to Purchase and in the related letter of transmittal (which, as amended or supplemented from time to time, together constitute the "Offer") enclosed herewith. We (or our nominees) are the holder of record of shares held by us for your account. A tender of such shares can be made only by us as the holder of record and pursuant to your instructions. The letter of transmittal is furnished to you for your information only and cannot be used by you to tender shares held by us for your account. We request instructions as to whether you wish to have us tender on your behalf any or all of such shares held by us for your account, pursuant to the terms and subject to the conditions set forth in the Offer to Purchase. Your attention is directed to the following: 1. The offer price is $2.30 per share, net to the seller, in cash (subject to applicable withholding of United States federal, sate and local taxes), less the per share amount of distributions, if any, declared and payable by First Union between the date of the Offer and the expiration date of the Offer, without interest thereon, on the terms and to the conditions set forth in the Offer. 2. The Offer is made for up to 5,000,000 shares. 3. The Offer is being made pursuant to the terms of a Stock Purchase Agreement, dated as of November 26, 2003, between First Union and the Purchaser. 4. Pursuant to the Stock Purchase Agreement, following the expiration date of the Offer, the Purchaser will purchase from First Union, at a purchase price of $2.60 per share, between 5,000,000 and 5,185,724 newly issued shares of First Union, depending upon the number of shares purchased in the Offer. 5. The Board of Trustees of First Union has approved the Stock Purchase Agreement and the transactions contemplated by the Stock Purchase Agreement but has taken no position as to whether shareholders should tender their shares in the Offer. 6. The Offer and withdrawal rights will expire at 12:00 midnight, Eastern time, on December 29, 2003 unless the Offer is extended. 7. Tendering shareholders will not be obligated to pay brokerage fees or commissions or, except as set forth in Instruction 6 of the Letter of Transmittal, stock transfer taxes on the purchase of shares pursuant to the Offer. 8. The Purchaser will pay any stock transfer taxes with respect to the transfer and sale of shares to it or its order pursuant to the Offer, except as otherwise provided in Instruction 6 of the letter of transmittal. 9. The Offer is conditioned upon the conditions to the offer described in Section 13 in the Offer to Purchase. In all cases, payment for shares accepted for payment pursuant to the offer will be made only after timely receipt by National City Bank (the "depositary") of (1) the certificates for (or a timely book-entry confirmation (as defined in the Offer to Purchase) with respect to) such shares, (2) a letter of transmittal (or a facsimile thereof), properly completed and duly executed, with any required signature guarantees, or, in the case of a book-entry transfer effected pursuant to the procedures set forth in section 2 of the Offer to Purchase, an agent's message (as defined in the Offer to Purchase), and (3) any other documents required by the letter of transmittal. Accordingly, tendering shareholders may be paid at different times depending on when certificates for shares or book-entry confirmations with respect to shares are actually received by the depositary. UNDER NO CIRCUMSTANCES WILL INTEREST BE PAID ON THE PURCHASE PRICE OF THE SHARES TO BE PAID BY THE PURCHASER, REGARDLESS OF ANY EXTENSION OF OR AMENDMENT TO THE OFFER OR ANY DELAY IN PAYING FOR SUCH SHARES The Offer is being made solely by the Offer to Purchase and the related letter of transmittal, and is being made to all holders of shares. The Purchaser is not aware of any state where the making of the Offer is prohibited by administrative or judicial action pursuant to any valid state statute. If the Purchaser becomes aware of any valid state statute prohibiting the making of the Offer or the acceptance of shares pursuant thereto, the Purchaser will make a good faith effort to comply with any such state statute. If, after such good faith effort, the Purchaser cannot comply with such state statute, the Offer will not be made to nor will tenders be accepted from or on behalf of the holders of shares in such state. In any jurisdiction where the securities, blue sky or other laws require the Offer to be made by a licensed broker or dealer, the Offer shall be deemed to be made on behalf of the Purchaser by one or more registered brokers or dealers that are licensed under the laws of such jurisdiction. If you wish to have us tender any or all of the shares held by us for your account, please instruct us by completing, executing and returning to us the instruction form contained in this letter. If you authorize a tender of your shares, all such shares will be tendered unless otherwise specified in such instruction form. Your instructions should be forwarded to us in ample time to permit us to submit a tender on your behalf on or prior to the expiration of the offer. Instructions with respect to the Offer to Purchase for Cash Up to 5,000,000 Common Shares of Beneficial Interest of FIRST UNION REAL ESTATE MORTGAGE AND EQUITY INVESTMENTS by FUR INVESTORS, LLC The undersigned acknowledge(s) receipt of your letter enclosing the Offer to Purchase dated December 1, 2003 (the "Offer to Purchase"), and the related letter of transmittal, relating to the offer by FUR Investors, LLC, a Delaware limited liability company, to purchase up to 5,000,000 outstanding common shares of beneficial interest, par value $1.00 per share (the "shares"), of First Union Real Estate Equity and Mortgage Investments, an Ohio business trust. This will instruct you to tender the number of shares indicated below (or, if no number is indicated below, all shares) which are held by you for the account of the undersigned, upon the terms and subject to the conditions set forth in the Offer to Purchase and in the related letter of transmittal furnished to the undersigned. - ---------------------------------------------------------------------------------------------------------------- Number of Shares to be Tendered* SIGN HERE _____________________________________________________ _____________________________________________________ Dated: _______________________________________, 200__ _____________________________________________________ Signature(s) _____________________________________________________ _____________________________________________________ Please print _____________________________________________________ _____________________________________________________ Address _____________________________________________________ Area Code and Tel _____________________________________________________ Tax Identification or Social Security Number - ---------- * Unless otherwise indicated, it will be assumed that all of your shares held by us for your account are to be tendered. - ----------------------------------------------------------------------------------------------------------------
EX-99.(A)(6) 8 e300797_ex99-a6.txt GUIDELINES ON SUBSTITUTE FORM W-9. GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 Guidelines for Determining the Proper Identification Number to Give the Payer. Social Security numbers have nine digits separated by two hyphens: i.e. 000-00-0000. Employer identification numbers have nine digits separated by only one hyphen: i.e. 00-0000000. The table below will help determine the number to give the payer.
========================================================================================================================== FOR THIS TYPE OF ACCOUNT: GIVE THE SOCIAL SECURITY NUMBER OF-- ========================================================================================================================== 1. An individual's account The individual 2. Two or more individuals (joint account) The actual owner of the account or, if combined funds, the first individual on the account (1) 3. Custodian account of a minor (Uniform Gift to The minor (2) Minors Act) 4. a. The usual revocable savings trust The grantor-trustee (1) (grantor is also trustee) b. So called trust account that is not a legal The actual owner (1) or valid trust under state law 5. Sole proprietorship or single-owner LLC The owner (3) 6. A valid trust, estate, or pension trust The legal entity (Do not furnish taxpayer identification number of the personal representative or trustee unless the legal entity itself is not designated in the account title.) (4) 7. Corporate or LLC electing corporate status on The corporation Form 8832 8. Association, club, religious, charitable, The organization educational, or other tax-exempt organization 9. Partnership or multi-member LLC The partnership 10. A broker or registered nominee The broker or registered nominee 11. Account with the Department of Agriculture The public entity in the name of a public entity (such as a state or local government, school district, or prison) that receives agricultural program payments ==========================================================================================================================
(1) List first and circle the name of the person whose number you furnish. If only one person on a joint account has a social security number, that person's number must be furnished. (2) Circle the minor's name and furnish the minor's social security number. (3) You must show your individual name, but you may also enter your business or "doing business as" name. You may use either your social security number or your employer identification number (if you have one). (4) List first and circle the name of the legal trust, estate, or pension trust. NOTE: If no name is circled when there is more than one name, the number will be considered to be that of the first name listed. GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 Obtaining A Number If you do not have a taxpayer identification number, obtain Form SS-5, Application for a Social Security Card, at the local Social Security Administration office, or Form SS-4, Application for Employer Identification Number, by calling 1 (800) TAX-FORM and apply for a number. Payees Exempt From Backup Withholding Payees specifically exempted from withholding include: 1. An organization exempt from tax under section 501(a)of the internal Revenue Code of 1986, as amended (the "Code"), an individual retirement account (IRA) or a custodial account under Section 403(b)(7) of the Code, if the account satisfies the requirements of Section 401(f)(2) of the Code. 2. The United States or any of it agencies or instrumentalities; 3. A state, the District of Columbia, a possession of the United States, or a political subdivision or instrumentality; 4. A foreign government and any political subdivision, agencies or instrumentalities; or 5. An international organization or any agencies or instrumentalities. Other Payee that may be exempt form backup withholding include: 6. A corporation; 7. A foreign central bank of issue; 8. A dealer in securities or commodities required to register in the United States, the District of Columbia, or a possession of the United States; 9. A futures commission merchant registered with the Commodity Futures Trading Commission; 10. A real estate investment trust; 11. An entity registered at all times during the tax year under the Investment Company Act of 1940; 12. A common trust fund operated by a bank under Section 584(a); 13. A financial institution; 14. A middleman known in the investment community as a nominee or custodian; or 15. A trust exempt from tax under Section 664 or described in Section 4947. The chart below shows types of payments that may be exempt from backup withholding. The chart applies to the exempt recipients listed above, 1 through 15.
========================================================================================================================== If the payment is for... THEN the payment is exempt for... ========================================================================================================================== Interest and dividend payments All exempt recipients except for 9 ========================================================================================================================== Broker transactions Exempt recipients 1 through 13. Also, a person registered under the Investment Advisers Act of 1940 who regularly acts as a broker ========================================================================================================================== Barter exchange transactions and patronage dividends Exempt recipients 1 through 5 ========================================================================================================================== Payments over $600 required to be reported and direct Generally, exempt recipients 1 through 7(2) sales over $5,000(1) ========================================================================================================================== (1) See Form 1099-MISC. Miscellaneous Income, and its instructions (2) However, the following payments made to a corporation (including gross proceeds paid to an attorney under Section 6045 (f), even if the attorney is a corporation) and reportable on Form 1099-MISC are not exempt from backup withholding: medical and health care payments, attorneys' fees, and payments for services paid by a Federal executive agency. ==========================================================================================================================
Certain payments, other than payments of interest, dividends, and patronage dividends, that are exempt from information reporting are also exempt from backup withholding. For details, see Sections 6041, 6041A, 6042, 6044, 6045, 6049, 6050A and 6050N, of the Code and regulations thereunder. EXEMPT PAYEES SHOULD COMPLET A SUBSTITUTE FORM W-9 TO AVOID POSSIBLE ERRONEOUS BACKUP WITHHOLDING. Furnish your taxpayer identification number, write "EXEMPT" on the form, sign and date the form and return to the payer. Privacy Act Notice--Section 6109 of the Internal Revenue Code requires you to provide your correct TIN to persons who must file information returns with the IRS to report interest, dividends, and certain other income paid to you, mortgage interest you paid, the acquisition or abandonment of secured property, cancellation of debt, or contributions you made to an IRA or Archer MSA. The IRS uses the numbers for identification purposes and to help verify the accuracy of your tax return. The IRS may also provide this information to the Department of Justice for civil an criminal litigation, and to cities, states, and the District of Columbia to carry out their tax laws. We may also disclose this information to other countries under a tax treaty , or to Federal and state agencies to enforce Federal nontax criminal laws and to combat terrorism. You must provide your TIN whether or not you are required to file a tax return. Payers must generally withhold 28% of taxable interest, dividend, and certain other payments to a payee who does not give a TIN to a payer. Certain penalties may also apply. Penalties Failure to furnish TIN. If you fail to furnish your correct TIN to a requester, you are subject to a penalty of $50 for each such failure unless your failure is due to reasonable cause and not to willful neglect. Civil penalty for false information with respect to withholding. If you make a false statement with no reasonable basis that results in no backup withholding, you are subject to a $500 penalty. Criminal penalty for falsifying information. Willfully falsifying certifications or affirmations may subject you to criminal penalties including fines and/or imprisonment. Misuse of TINs. If the requester discloses or uses TINs in violation of Federal law, the requester may be subject to civil and criminal penalties. FOR ADDITIONAL INFORMATION, CONTACT YOUR TAX CONSULTANT OR THE INTERNAL REVENUE SERVICE. EX-99.(A)(7) 9 e300797_ex99-a7.txt FORM OF SUMMARY ADVERTISEMENT. (The following summary advertisement appeared in Investor's Business Daily on December 1, 2003.) ================================================================================ This announcement is neither an offer to purchase nor a solicitation of an offer to sell shares (as defined below).The offer (as defined below) is made solely by the Offer to Purchase, dated December 1, 2003, and the related Letter of Transmittal and any amendments or supplements thereto, and is being made to all holders of shares. The offer is not being made to (nor will tenders be accepted from or on behalf of) holders of shares in any jurisdiction in which the making of the offer or the acceptance thereof would not be in compliance with the laws of such jurisdiction. In any jurisdiction where the securities, blue sky or other laws require the offer to be made by a licensed broker or dealer, the offer shall be deemed to be made on behalf of FUR Investors (as defined below) only by one or more registered brokers or dealers that are licensed under the laws of such jurisdiction. Notice of Offer to Purchase for Cash Up to 5,000,000 Common Shares of Beneficial Interest of FIRST UNION REAL ESTATE EQUITY AND MORTGAGE INVESTMENTS at $2.30 NET PER SHARE by FUR INVESTORS, LLC FUR Investors, LLC, a Delaware limited liability company ("FUR Investors"), is offering to purchase up to 5,000,000 common shares of beneficial interest, par value $1.00 per share (the "shares"), of First Union Real Estate Equity and Mortgage Investments, an Ohio business trust (the "Company"), at $2.30 per share, net to the seller, in cash, without interest thereon (subject to applicable withholding of United States federal, state and local taxes), less the per share amount of distributions, if any, declared and payable by the Company to shareholders between the date hereof and the expiration date of the Offer (as defined below), upon the terms and subject to the conditions set forth in the Offer to Purchase, dated December 1, 2003 (the "Offer to Purchase"), and in the related Letter of Transmittal (which, together with any amendments or supplements thereto, collectively constitute the "Offer"). Tendering shareholders who have shares registered in their name and who tender directly will not be charged brokerage fees or commissions or, subject to Instruction 6 of the Letter of Transmittal, stock transfer taxes on the purchase of shares by FUR Investors pursuant to the Offer. - -------------------------------------------------------------------------------- THE OFFER AND WITHDRAWAL RIGHTS EXPIRE AT 12:00 MIDNIGHT, EASTERN TIME, ON MONDAY, DECEMBER 29, 2003, UNLESS THE OFFER IS EXTENDED. - -------------------------------------------------------------------------------- This Offer is being made under a Stock Purchase Agreement dated as of November 26, 2003 between FUR Investors and the Company. Pursuant to the Stock Purchase Agreement, following the expiration of the Offer, FUR Investors will purchase from the Company, at a purchase price of $2.60 per share, between 5,000,000 and 5,185,724 newly issued shares of the Company, depending upon the number of shares purchased in the Offer. If the Offer is fully subscribed, following the Offer and FUR Investors' purchase of shares from the Company, FUR Investors will own 10,000,000 shares, representing 32.2% of the outstanding shares of the Company. Following the Offer and FUR Investors' purchase of shares from the Company, an affiliate of FUR Investors will be retained by the Company to manage the day to day operations of the Company. FUR Investors is making the Offer and acquiring additional shares from the Company in order to acquire a significant equity stake in the Company. In this regard, following the Offer FUR Investors will have the potential to significantly influence control of the business of the Company. The Offer is not conditioned upon FUR Investors obtaining financing. For purposes of the Offer, FUR Investors will be deemed to have accepted for payment (and thereby purchased) shares validly tendered and not properly withdrawn as, if and when FUR Investors gives oral or written notice to National City Bank (the "Depositary") of its acceptance for payment of such shares pursuant to the Offer. Upon the terms and subject to the conditions of the Offer, payment for shares accepted for payment pursuant to the Offer will be made by deposit of the purchase price therefor with the Depositary, which will act as agent for the tendering shareholders whose shares have been accepted for payment. Upon the deposit of funds with the Depositary for the purpose of making payment to validly tendering shareholders, FUR Investors' obligation to make such payment shall be satisfied and such tendering shareholders must thereafter look solely to the Depositary for payment of the amounts owed to them by reason of acceptance for payment of shares pursuant to the Offer. In all cases, payment for shares accepted for payment pursuant to the Offer will be made only after timely receipt by the Depositary of (a) certificates for (or a timely book-entry confirmation (as defined in the Offer to Purchase) with respect to) such shares, (b) a Letter of Transmittal (as defined in the Offer to Purchase), or facsimile thereof, properly completed and duly executed, with any required signature guarantees (or, in the case of a book- entry transfer, an agent's message (as defined in the Offer to Purchase) in lieu of the Letter of Transmittal) and (c) any other documents required by the Letter of Transmittal. Accordingly, tendering shareholders may be paid at different times depending upon when certificates for shares or book-entry confirmations with respect to shares are actually received by the Depositary. If a shareholder desires to tender shares and cannot timely satisfy the requirements to tender prior to the expiration date, the shareholder may tender shares by complying with the procedure for guaranteed delivery described in the Offer to Purchase. Under no circumstances will interest on the purchase price of the shares be paid by FUR Investors, regardless of any extension of the Offer or any delay in making such payment. Subject to the applicable rules and regulations of the Securities and Exchange Commission, FUR Investors expressly reserves the right, in its sole discretion, at any time or from time to time, to extend the period of time during which the Offer is open by giving oral or written notice of such extension to the Depositary and by making a public announcement thereof. During any such extension, all shares previously tendered and not withdrawn will remain subject to the Offer, subject to the right of a tendering shareholder to withdraw such shareholder's tender of shares. Any extension, delay, termination, waiver or amendment will be followed as promptly as practicable by public announcement thereof to be made no later than 9:00 a.m., Eastern time, on the next business day after the previously scheduled expiration date (as defined in the Offer to Purchase). Tenders of shares made pursuant to the Offer are irrevocable, except that shares tendered pursuant to the Offer may be withdrawn at any time prior to the expiration date and, unless theretofore accepted for payment by FUR Investors pursuant to the Offer, may also be withdrawn at any time after January 30, 2004. For a withdrawal to be effective, a notice of withdrawal must be timely received by the Depositary at one of its addresses set forth on the back cover of the Offer to Purchase. Any such notice of withdrawal must specify the name of the person having tendered the shares to be withdrawn, the number of shares to be withdrawn and the names in which the certificate(s) evidencing the shares to be withdrawn are registered, if different from that of the person who tendered such shares. The signature(s) on the notice of withdrawal must be guaranteed by an eligible institution (as defined in the Offer to Purchase), unless such shares have been tendered for the account of any eligible institution. If shares have been tendered pursuant to the procedures for book-entry tender as set forth in Section 2 of the Offer to Purchase, any notice of withdrawal must specify the name and number of the account at the book-entry transfer facility (as defined in the Offer to Purchase) to be credited with the withdrawn shares. If certificates for shares to be withdrawn have been delivered or otherwise identified to the Depositary, the name of the registered holder and the serial numbers of the particular certificates evidencing the shares to be withdrawn must also be furnished to the Depositary as aforesaid prior to the physical release of such certificates. All questions as to the form and validity (including time of receipt) of any notice of withdrawal will be determined by FUR Investors, in its sole discretion, which determination shall be final and binding. If tendering shareholders tender more than the number of shares that FUR Investors seeks to purchase pursuant to the Offer to Purchase, FUR Investors will take into account the number of shares so tendered and take up and pay for as nearly as may be pro rata, disregarding fractions, according to the number of shares tendered by each tendering shareholder during the period during which that Offer remains open. If proration of tendered shares is required, because of the difficulty of determining the precise number of shares properly tendered and not withdrawn, FUR Investors does not expect to announce the final results of proration or pay for any shares until at least five New York Stock Exchange trading days after the expiration date. Preliminary results of proration will be announced by press release as promptly as practicable. If a shareholder's shares are accepted for payment pursuant to the Offer, the shareholder will generally recognize gain or loss measured by the difference between the cash received by the shareholder and the shareholder's adjusted tax basis in the tendered shares. Shareholders should review the description of U.S. federal income tax consequences contained in the Offer to Purchase and consult with their tax advisor when evaluating the Offer. None of FUR Investors, the Depositary, the Information Agent, or any other person will be under any duty to give notification of any defects or irregularities in any notice of withdrawal or incur any liability for failure to give such notification. Withdrawals of tenders of shares may not be rescinded, and any shares properly withdrawn will be deemed not to have been validly tendered for purposes of the Offer. However, withdrawn shares may be retendered by following one of the procedures described in Section 2 of the Offer to Purchase at any time prior to the expiration date. The information required to be disclosed by paragraph (d)(1) of Rule 14d-6 of the General Rules and Regulations under the Securities Exchange Act of 1934, as amended, is contained in the Offer to Purchase and is incorporated herein by reference. Pursuant to the Stock Purchase Agreement, the Company has agreed to furnish FUR Investors with the Company's shareholder list and security positions listings for the purpose of disseminating the Offer to shareholders. FUR Investors intends to mail the Offer to Purchase, the related Letter of Transmittal and, if required, other relevant materials to record holders on or before December 3, 2003 and to furnish to broker-dealers, commercial banks, trust companies and similar persons whose names, or the names of whose nominees, appear on the shareholder list, if applicable, or who are listed as participants in a clearing agency's security position listing for subsequent transmittal to beneficial owners of shares. THE OFFER TO PURCHASE AND THE LETTER OF TRANSMITTAL CONTAIN IMPORTANT INFORMATION WHICH SHOULD BE READ CAREFULLY BEFORE ANY DECISION IS MADE WITH RESPECT TO THE OFFER. Questions and requests for assistance may be directed to the Information Agent at its telephone numbers set forth below. To obtain promptly additional copies of the Offer to Purchase, the related Letter of Transmittal and other tender offer materials please call the Information Agent at one of the telephone numbers set forth below. Such copies will be furnished at FUR Investor's expense. FUR Investors will not pay any fees or commissions to any broker or dealer or any other person (other than the Information Agent and the Depositary) for soliciting tenders of shares pursuant to the Offer. The Information Agent for the Offer is: MacKenzie Partners, Inc. Call Collect: (212) 929-5500 Toll-Free: (800) 322-2885 December 1, 2003 ================================================================================ -----END PRIVACY-ENHANCED MESSAGE-----