First Union common shareholders will receive either $2.55 per share in cash or $2.20 per share plus a pro-rata share of notes backed by the REIT's remaining real estate assets. The notes will be secured by a pledge of two loans, one on each of First Union's two remaining properties. One is a $3.5 million first leasehold mortgage on the Circle Tower office building in Indianapolis. The other is an approximate $16.5 million mezzanine loan on the Park Plaza mall in Little Rock, Arkansas. Both loans will bear interest at 11% payable in cash semi-annually in arrears.

Each note will have a face amount of $100, which is approximately $0.575 per share, and will bear interest at 11% per annum on its face amount. As a result, shareholders who elect to keep the note rather than the $0.35 cash alternative will in effect be paying approximately 60.9% of the face amount of the note. The notes will mature on May 31, 2010 concurrently with the underlying loans that secure them.

The $88.7 million transaction value is based on 100% of the company's common shareholders electing to receive $2.55 per share rather than $2.20 per share plus a share of the notes. In either case, dividends received prior to closing will be deducted from shareholder totals on a penny-for-penny basis. If the deal fails to close by Aug. 31 because of noncompliance issues on GGP's part, the share price will increase by 6% per annum.