First Union also entered into a settlement agreement with the State of California in regard to the Peachtree Mall, a former First Union asset. The REIT will be paid $11 million in exchange for the termination of its claims against the state. That settlement is subject to final court approval and legislative funding.

The shares in the private offering will be entitled to cumulative dividends at a minimum rate of 6.5% and will be convertible into common stock at a conversion price of $4.50, subject to anti-dilution adjustments. If fully converted, the shares would represent approximately 38.7% of the outstanding common stock. The sale is subject to New York Stock Exchange listing approval.

A week ago, the REIT agreed to sell in a private offering one million of its common shares of beneficial interest to New Hyde Park, NY-based Kimco Realty Corp. for $4 million. That sale also is subject to New York Stock Exchange listing approval.