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
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THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, EASTERN TIME, ON
MONDAY, DECEMBER 29, 2003, UNLESS THE OFFER IS EXTENDED.
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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.
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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
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* Unless otherwise indicated, it will be assumed that all of your shares
held by us for your account are to be tendered.
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