AMC INC, S-4/A, 1996-05-24

AMC INC
S-4/A, 1996-05-24
OPERATORS OF NONRESIDENTIAL BUILDINGS

Previous: APPLEWOODS INC, NTN 10Q, 1996-05-24

Next: FIRST SIERRA RECEIVABLES II INC, 8-K, 1996-05-24

<PAGE> 1

AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 24, 1996

REGISTRATION NO. 333-1742
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------------

AMENDMENT NO. 4 TO

FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
---------------------

AMC, INC.
(Exact name of registrant as specified in its charter)

<TABLE>
<S> <C> <C>
GEORGIA 5199 58-2201031
(State or Other Jurisdiction of (Primary Standard Industrial (IRS Employer
Incorporation or Organization) Classification Code Number) Identification No.)
</TABLE>

240 PEACHTREE STREET, N.W.
SUITE 2200
ATLANTA, GEORGIA 30303
(404) 220-3000
(Address, Including Zip Code, and Telephone Number, Including Area Code, of
Registrant's Principal Executive Offices)
---------------------
JOHN M. RYAN
PRESIDENT
AMC, INC.
240 PEACHTREE STREET, N.W.
SUITE 2200
ATLANTA, GEORGIA 30303
(404) 220-3000
(Name, Address, Including Zip Code, and Telephone Number, Including Area Code,
of Agent For Service)
---------------------
COPY TO:

R. MASON CARGILL, ESQ.
JONES, DAY, REAVIS & POGUE
3500 ONE PEACHTREE CENTER
303 PEACHTREE STREET, N.E.
ATLANTA, GEORGIA 30308-3242
(404) 521-3939
---------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after the effective date of this Registration Statement.
---------------------

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE> 2

INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR
MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT
BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR
THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS
OF ANY SUCH STATE.

SUBJECT TO COMPLETION DATED MAY 24, 1996

PROSPECTUS

OFFER TO EXCHANGE
$1.00 PRINCIPAL AMOUNT OF FIXED
RATE CLASS A SECURED NOTES DUE JULY 31, 2000
FOR EACH $1.00 PRINCIPAL AMOUNT OF FIXED RATE
CLASS A SECURED NOTES DUE JULY 31, 2000
($160,000,000 OUTSTANDING)
OF

AMC, INC.

THE OFFER TO EXCHANGE AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT,
NEW YORK CITY TIME ON JUNE 25, 1996, UNLESS EXTENDED.

AMC, Inc., a Georgia corporation ("AMC"), hereby offers, upon the terms and
subject to the conditions set forth in this Prospectus and the accompanying
Letter of Transmittal (which together constitute the "Exchange Offer"), to
exchange $1.00 principal amount of AMC's Fixed Rate Class A Secured Notes due
July 31, 2000 (collectively, the "Exchange Notes") for each $1.00 principal
amount of AMC's Fixed Rate Class A Secured Notes due July 31, 2000 ($160 million
outstanding) (collectively, the "Private Placement Notes"; the Private Placement
Notes and the Exchange Notes are collectively referred to herein as the
"Notes"). The terms of the Exchange Notes are identical in all material respects
to the terms of the Private Placement Notes. The Exchange Notes are being
offered hereunder in order to satisfy certain obligations of AMC under the
Exchange and Registration Rights Agreement dated as of October 2, 1995, by and
among AMC and the initial holders of the Private Placement Notes (the "Exchange
and Registration Rights Agreement"). See "EXCHANGE AND REGISTRATION RIGHTS
AGREEMENT." Based upon a series of no-action letters issued by the Division of
Corporate Finance of the Securities and Exchange Commission (the "Commission")
concerning registered exchange offers following private placement transactions,
Exchange Notes issued pursuant to the Exchange Offer in exchange for Private
Placement Notes may be offered for resale, resold, and otherwise transferred by
a holder thereof (other than any such holder which is an "affiliate" of AMC
within the meaning of Rule 405 under the Securities Act of 1933, as amended (the
"Securities Act")), without compliance with the registration and prospectus
delivery provisions of the Securities Act provided that the Exchange Notes are
acquired in the ordinary course of the holder's business, the holder has no
arrangement with any person to participate in the distribution of the Exchange
Notes, neither the holder nor the transferee is an affiliate of AMC, and, if the
holder is not a broker-dealer, that the holder is not engaged in and does not
intend to engage in a distribution of Exchange Notes and each holder delivers
representations as to the foregoing to the Company. See "THE EXCHANGE
OFFER -- Resales of the Exchange Notes." Each broker-dealer that receives
Exchange Notes pursuant to the Exchange Offer must acknowledge that it will
deliver a copy of this Prospectus in connection with any resale of such
securities. Each broker-dealer that acquired Private Placement Notes as a result
of market making activity or other trading activity may use this Prospectus, as
supplemented or amended, in connection with the resale of such securities. See
"THE EXCHANGE OFFER -- Resales of the Exchange Notes." AMC believes that none of
the current registered holders of the Private Placement Notes are affiliates of
AMC.

The Indenture, dated as of October 2, 1995, as amended, entered into in
respect of the Notes between Reliance Trust Company, as trustee (the "Trustee"),
and AMC (the "Indenture"), provides that AMC must redeem all or a portion of the
Notes under certain circumstances, including, the generation of specified levels
of cash flow, a change in control, or a voluntary redemption. The rights of
holders of the Notes are subordinated to the rights of the lenders under the
Revolver, as to the Apparel Mart and the Merchandise Mart, and to the rights of
lenders under the Gift Mart Financing, as to the Gift Mart, each as hereinafter
defined, which represent an aggregate of up to $117 million in debt and bear
interest at fluctuating rates. See "FORMATION TRANSACTIONS -- Financing."

The Exchange Notes will bear interest at 7.5% per annum until July 31, 1997,
and at 9.0% per annum thereafter, payable quarterly in arrears, from and
including their issuance date. Holders of the Private Placement Notes whose
Private Placement Notes are accepted for exchange will receive accrued but
unpaid interest thereon to, but not including, the issuance date of Exchange
Notes, such interest to be payable with the first interest payment on the
Exchange Notes, and will be deemed to have waived the right to receive any
payment in respect of interest on the Private Placement Notes accrued from and
after the date of issuance of the Exchange Notes. See "THE EXCHANGE OFFER --
Acceptance of the Private Placement Notes for Exchange; Delivery of Exchange
Notes."

AMC will not receive any proceeds from the Exchange Offer. In the event the
Exchange Offer is terminated, the Private Placement Notes not accepted for
exchange will be returned without expense to the tendering holder as promptly as
practicable thereafter. See "THE EXCHANGE OFFER -- Terms of the Exchange Offer;
Period for Tendering Private Placement Notes."

There is no public market for the Private Placement Notes or the Exchange
Notes, and AMC believes it is unlikely that any such market will develop. AMC
does not intend to list the Exchange Notes on any securities exchange.
Consequently, holders of Notes may be required to bear the economic risk of
ownership thereof for an indefinite period of time, and in the event the holder
is able to sell its Notes, such holder may be required to sell at a substantial
discount.

The Exchange Offer will expire at 12:00 Midnight, New York City time, on
June 25, 1996 (the "Expiration Date"), unless AMC, in its sole discretion, shall
have extended the period during which the Exchange Offer is open, in which event
the term "Expiration Date" means the latest time and date at which the Exchange
Offer, as so extended by AMC, shall expire. See "THE EXCHANGE OFFER -- Terms of
the Exchange Offer; Period for Tendering Private Placement Notes." Private
Placement Notes tendered pursuant to the Exchange Offer may be withdrawn, in
accordance with the withdrawal provisions described herein, at any time prior to
the Expiration Date. See "THE EXCHANGE OFFER -- Withdrawal Rights." The Exchange
Offer is not conditioned upon any minimum principal amount of Private Placement
Notes being tendered for exchange. A holder who wishes to tender Private
Placement Notes and whose Private Placement Notes are not immediately available
may tender such Private Placement Notes by following the procedure for
guaranteed delivery set forth in "THE EXCHANGE OFFER -- Guaranteed Delivery
Procedures."

SEE "RISK FACTORS" AT PAGE 9 FOR A DISCUSSION OF CERTAIN FACTORS THAT
SHOULD BE CONSIDERED BY HOLDERS OF PRIVATE PLACEMENT NOTES CONCERNING THE
EXCHANGE OFFER.

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION, NOR HAS THE COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
------------------

The date of this Prospectus is May 24, 1996.

<PAGE> 3

AVAILABLE INFORMATION

AMC is not currently subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"). AMC has filed
a Registration Statement on Form S-4 (together with any amendments thereto, the
"Registration Statement") with the Commission under the Securities Act with
respect to the Exchange Notes offered hereby. This Prospectus omits certain
information contained in the Registration Statement and reference is made to the
Registration Statement and the exhibits and schedules thereto for further
information with respect to AMC and the Exchange Notes offered hereby.
Statements contained herein concerning the terms and provisions of any document
are not necessarily complete, and in each instance in which reference is made to
the copy of such document filed as an exhibit to the Registration Statement,
each such statement is qualified in its entirety by such reference. As a result
of the filing of the Registration Statement with the Commission, AMC will become
subject to the informational requirements of the Exchange Act, and in accordance
therewith, will be required to file reports and other information with the
Commission relating to its business, financial statements, and other matters
until the end of its fiscal year ending August 31, 1996, at which point such
obligation may cease. However, the Indenture requires AMC to continue to file
all such reports and other information with the Commission. Such reports and
other information filed with the Commission, as well as the Registration
Statement, can be inspected and copied at the public reference facilities of the
Commission at 450 Fifth Street, N.W., Washington, D.C. 20509, and at the
Commission's regional offices located at 7 World Trade Center, 13th Floor, New
York, New York 10048 and Northwestern Atrium Center, 500 West Madison Street,
Suite 1400, Chicago, Illinois 60661. Copies of such material can also be
obtained by mail from the Public Reference Section of the Commission at 450
Fifth Street, N.W., Washington, D.C. 20549, at the prescribed rates.
---------------------

No person has been authorized to give any information or make any
representation not contained in this Prospectus and, if given or made, such
information or representation must not be relied upon as having been authorized
by AMC. This Prospectus does not constitute an offer to sell or the solicitation
of an offer to buy any securities other than those to which it relates, or an
offer to sell or a solicitation of an offer to buy any securities in any
jurisdiction in which, or to any person to whom, it is unlawful to make such
offer or solicitation. Neither the delivery of this Prospectus nor the
distribution of any securities hereunder shall, under any circumstances, create
an implication that there has been no change in the affairs of AMC or in the
information contained herein since the date hereof.
<PAGE> 4

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
PROSPECTUS SUMMARY.................................................................... 1
RISK FACTORS.......................................................................... 9
Financing Risks..................................................................... 9
Additional Risks Associated With the Notes.......................................... 10
Potential Tax Risks of Exchange Offer for the Company............................... 11
Industry Risks...................................................................... 11
Operating Risks..................................................................... 12
Real Estate Risks................................................................... 12
Control of Board of Directors; Change of Control.................................... 14
Conflicts of Interest............................................................... 15
Forward Looking Statements.......................................................... 15
USE OF PROCEEDS....................................................................... 16
THE EXCHANGE OFFER.................................................................... 17
General............................................................................. 17
Terms of the Exchange Offer; Period for Tendering Private Placement Notes........... 17
Procedures for Tendering Private Placement Notes.................................... 17
Guaranteed Delivery Procedures...................................................... 19
Acceptance of the Private Placement Notes for Exchange; Delivery of Exchange
Notes............................................................................ 19
Withdrawal Rights................................................................... 20
Certain Conditions to the Exchange Offer............................................ 20
Assistance.......................................................................... 21
The Exchange Agent.................................................................. 21
Transfer Taxes...................................................................... 21
Accounting Treatment................................................................ 22
Resales of the Exchange Notes....................................................... 22
Other............................................................................... 22
Tax Consequences.................................................................... 22
PRO FORMA FINANCIAL INFORMATION....................................................... 23
SELECTED HISTORICAL FINANCIAL DATA.................................................... 28
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS.......................................................................... 30
Overview............................................................................ 30
Results of Operations............................................................... 30
Liquidity and Capital Resources..................................................... 37
Inflation........................................................................... 38
Recently Issued Accounting Pronouncements........................................... 38
FORMATION TRANSACTIONS................................................................ 39
Background.......................................................................... 39
Financing........................................................................... 40
BUSINESS AND PROPERTIES............................................................... 43
General............................................................................. 43
Trade Show and Mart Industry Overview............................................... 43
Company Strategy.................................................................... 43
Recent Developments................................................................. 45
The Marts........................................................................... 45
Independent Trade Shows............................................................. 47
Special Events...................................................................... 48
Other............................................................................... 48
Competition......................................................................... 49
The Properties...................................................................... 49
Governmental Regulation............................................................. 51
</TABLE>

i
<PAGE> 5

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Noncompetition Agreement............................................................ 52
Employees........................................................................... 52
Legal Proceedings................................................................... 52
MANAGEMENT............................................................................ 53
Directors and Executive Officers.................................................... 53
Audit Committee..................................................................... 54
Compensation Committee.............................................................. 55
Director Compensation............................................................... 55
Action Requiring Approval of Independent Directors.................................. 55
Compensation of Executive Officers.................................................. 56
PRINCIPAL STOCKHOLDERS AND SECURITY OWNERSHIP OF MANAGEMENT........................... 57
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS........................................ 59
Service Agreements.................................................................. 59
Other Agreements, Indebtedness and Interests........................................ 61
THE NOTES............................................................................. 62
General............................................................................. 62
Interest............................................................................ 62
Principal........................................................................... 62
Payments and Paying Agent........................................................... 62
Form, Registration and Transfers.................................................... 63
Restrictions on Activities of the Company........................................... 63
Redemption.......................................................................... 63
Collateral for the Notes............................................................ 64
Defaults and Remedies............................................................... 64
Limitation on Suits and Actions..................................................... 65
No Recourse Against Others.......................................................... 65
Modifications of the Notes and the Indenture........................................ 65
Trustee Dealings with the Company................................................... 66
Indemnification of Trustee.......................................................... 66
Replacement of Notes................................................................ 66
Governing Law....................................................................... 66
Definitions......................................................................... 66
EXCHANGE AND REGISTRATION RIGHTS AGREEMENT............................................ 69
THE SHAREHOLDERS AGREEMENT............................................................ 70
CERTAIN FEDERAL INCOME TAX CONSIDERATIONS............................................. 72
Consequences of Exchange of Notes to the Holders.................................... 72
Consequences of Exchange of Notes to the Company.................................... 72
Interest Income to Holders of Exchange Notes........................................ 74
Possible Withholding Tax on Interest and Other Consequences for Non-U.S. Holders.... 75
Gain or Loss on Disposition of Exchange Notes....................................... 76
Market Discount..................................................................... 77
Backup Withholding and Information Reporting........................................ 77
LEGAL MATTERS......................................................................... 78
EXPERTS............................................................................... 78
INDEX TO FINANCIAL STATEMENTS......................................................... F-1
</TABLE>

ii
<PAGE> 6

PROSPECTUS SUMMARY

The following summary is qualified in its entirety by, and should be read
in conjunction with, the more detailed information and financial statements
appearing elsewhere in this Prospectus. Unless otherwise indicated or unless the
context otherwise requires, references to the "Company" include AMC, Inc., a
Georgia corporation ("AMC") and its predecessor companies, referred to herein as
the "Atlanta Market Center Companies." References to the fiscal years of AMC
refer to years ending August 31, and references to the fiscal years of Atlanta
Market Center Companies refer to years ended December 31.

THE COMPANY

AMC was formed in conjunction with a series of transactions in 1995 which
involved the exchange of certain assets, debt and equity and the debt
restructuring of Mr. John C. Portman, Jr. ("Mr. Portman") and a group of
affiliated entities (collectively, the "Portman Companies") with the creditors
of Mr. Portman and the Portman Companies. As a result of these transactions, the
initial assets of AMC included the Atlanta Merchandise Mart (the "Merchandise
Mart"), the Atlanta Apparel Mart (the "Apparel Mart"), the Atlanta Gift Mart
(the "Gift Mart"; the Merchandise Mart, the Apparel Mart and the Gift Mart
hereinafter collectively, the "Marts"), and the assets of Atlanta Market Center
Management Company, Inc., a Georgia corporation ("AMCMC") which operated the
Marts and was merged into AMC. Prior to the formation of AMC, Mr. Portman and
the Portman Companies had been involved in designing, developing, operating and
owning office buildings, hotels, trade marts and trade shows throughout the
world for more than 40 years. See "FORMATION TRANSACTIONS -- Background."

The Company's primary business is the operation of the Marts and the
management of trade shows in conjunction with such Marts, which historically has
generated more than 90% of the Company's revenues from both rental and trade
show revenues. Additionally, the Company manages trade shows on behalf of third
parties at other locations.

A wholesale trade show allows wholesalers, principally manufacturers and
their representatives (collectively "Manufacturers"), to offer their goods to a
broad range of retailers at a single location. Trade shows are held at trade
marts, which are buildings specifically designed to serve as wholesale trade
facilities, or at other exhibition facilities. Trade marts offer Manufacturers
showrooms and also conduct periodic industry specific trade shows (also known as
"markets"). The Company acts as an intermediary to bring together a critical
mass of Manufacturers and retailers.

Each of the Company's three Marts focuses on a specific industry. The
Apparel Mart, with approximately 1.3 million rentable square feet, is a
wholesale buying facility for purchasers of women's, children's and men's
apparel, jewelry and fashion accessories. The Gift Mart houses approximately 1.0
million rentable square feet of giftware, and the Merchandise Mart, which has
approximately 1.9 million rentable square feet, houses a variety of home
furnishings. The assets of the Marts are principally comprised of the Mart
buildings and improvements thereto and interests in the land upon which they are
located.

In order to participate in trade shows at the Company's Marts,
Manufacturers either lease showrooms in the Marts for terms that average
approximately three years (referred to as "permanent" space) or rent an exhibit
booth for a particular trade show. By committing to permanent space, in addition
to having the availability of a year round sales facility, a Manufacturer has
the ability to construct significant tenant improvements and is assured of a
specific location and the ability to participate in all of the trade shows held
at the Mart during the term of its lease. Some of the Manufacturers do not use
such leased space except during trade shows. As of February 29, 1996,
approximately 1.1 million, 1.0 million and 1.4 million square feet were
designated as permanent space in the Apparel Mart, the Gift Mart and the
Merchandise Mart, respectively, of which approximately 62%, 98% and 65%,
respectively, was leased.

The Company believes that the ease and cost of transportation to a trade
mart, along with the availability and cost of local accommodations,
transportation, food and other services significantly impacts attendance at a
trade mart. Accordingly, the Company believes the location and configuration of
its Mart facilities in downtown Atlanta, Georgia are a key element to the
Company's success. The Company's Marts are located in

1
<PAGE> 7

downtown Atlanta within walking distance of hotels with approximately 10,400
rooms and numerous restaurants. Additionally, there are approximately 6,800
hotel rooms in the nearby Midtown and Buckhead areas of Atlanta. The Atlanta
airport, which offers a large number of flights from domestic and international
cities, is a relatively short distance from downtown and is served by a rapid
rail system which has a station directly underneath the Merchandise Mart. For
each of the six years beginning 1989, Atlanta's airport was ranked the best
airport in North America by Business Travelers International Magazine and
Atlanta's airport was the second busiest airport in the U.S. in 1995, with
approximately 57 million passengers. In addition, the Company believes that
buyers at the Company's Marts are attracted by the efficiencies associated with
the three Mart buildings which are adjacent to one another and connected by
aerial walkways.

At its Marts, the Company continually seeks to expand or introduce product
lines which are complementary in nature to existing product lines. This provides
expanded opportunities for cross-merchandising which the Company believes are
attractive to both the Manufacturers and retailers who participate in its trade
shows. The Company's strategy is to become a cross-category buying destination
where buyers can satisfy their buying requirements in a short period of time
rather than traveling to a number of separate trade marts. For example, the
Company's international gift and home furnishings market held at the Marts in
January 1996, brought together merchandise from five industries in a 13-day
combined trade show.

The Company believes it is well-positioned to compete against many trade
shows located in cities which have relatively remote airports and inferior
infrastructures and do not have as expansive a selection of merchandise in such
a concentrated area, thus increasing both the cost and time associated with
participating in such shows.

The Company believes that each of its gift and home furnishings trade shows
features one of the largest collections of goods for such industries in the
United States. While historically trade shows, including those held in trade
marts, have been predominantly regional in nature, the Company's gift and home
furnishing trade shows have drawn a significant number of buyers from regions
outside the southeastern U.S., as well as international buyers. See "BUSINESS
AND PROPERTIES -- Company Strategy."

FORMATION TRANSACTIONS

Background

In 1991, as a result of declines in the commercial real estate markets, Mr.
Portman and the Portman Companies were unable generally to meet their debt
obligations. Accordingly, Mr. Portman, the Portman Companies and substantially
all of their creditors entered into the Override and Collateral Pool Agreement
dated August 23, 1991 (as amended, the "OCPA"). Commencing in 1993, as a result
of the inability to sell or refinance certain assets of the Portman Companies as
contemplated by the OCPA, the parties to the OCPA began discussions to explore
ways to terminate the OCPA and to restructure the debt governed thereby.

In November 1995, a final plan was implemented which involved exchanges of
certain assets, debt and equity, as well as debt restructurings, with an
effective date of October 2, 1995 (the "Formation Date"). In a series of
transactions, the OCPA was terminated, and Portman Holdings, L.P., a Georgia
limited partnership ("Portman Holdings"), in which AMC has no ownership
interest, and AMC were formed. Certain assets subject to the OCPA and certain
interests in the Portman Companies were transferred to Portman Holdings, which
is controlled by Mr. Portman. Except for its equity interest in AMC, after
completion of the restructurings, all of the net assets held by Portman Holdings
are assets and liabilities of entities other than the predecessor companies to
AMC. Other assets subject to the OCPA, as more fully described below, were
transferred to AMC.

2
<PAGE> 8

On the Formation Date there were five classes of creditors (Classes A
through E) under the OCPA holding claims against Mr. Portman personally. In
addition, each of the Apparel Mart, the Merchandise Mart and the Gift Mart were
encumbered by separate mortgage loans. As a part of the OCPA termination,
certain of this debt was forgiven and the remainder was restructured, resulting
in an extraordinary gain of approximately $68.0 million for two of the
predecessor companies, The Atlanta Apparel Mart and the Atlanta Merchandise
Mart, L.P. The debt was restructured as follows:

- Class A Claims: On the Formation Date, there were two types of Class A
claims under the OCPA. One type, in the aggregate amount of $2,706,639
held by the lending syndicate that held the mortgage loan on the
Merchandise Mart, was paid down to $1,656,007, which balance was modified
to become the Fixed Rate Class A AMM Escrow Notes due July 31, 1997 in the
principal amount of $1,656,007 (the "AMM Escrow Bonds"). Those bonds were
issued directly to the thirteen banks comprising the lending syndicate
which held the mortgage loan on the Merchandise Mart. The other type of
Class A claim, in the aggregate amount of $8,033,600 held by eight
separate banks in varying amounts (being the banks which agreed to fund
new working capital to Mr. Portman when the OCPA was first put in place),
was modified to become the Class A Elevated Antecedent Debt Notes due July
31, 2000 in the principal amount of $8,033,600 (the "Antecedent Debt
Bonds").

- Class B, C & D Claims: On the Formation Date, the Class B, C & D claims
under the OCPA, which represented personal obligations of Mr. Portman,
were determined to aggregate $280,329,854. These claims were extinguished
in exchange for the transfer by Mr. Portman of interests in certain assets
which had previously secured such claims. Such interests, which had a
deficit book value for accounting purposes, were then contributed to AMC
by the claimants for approximately 29,203,000 shares of common stock
issued by AMC. Because the transfer was in satisfaction of personal
obligations, the issuance of shares to the claimants is regarded as a
distribution to Mr. Portman of approximately $29,203,000 for accounting
purposes.

- Class E Claims: On the Formation Date, the Class E claims under the OCPA
aggregated $8,483,953. These claims were extinguished for no further
consideration.

- Apparel Mart Financing: On the Formation Date, the then existing Apparel
Mart mortgage financing was held by a lending syndicate comprised of seven
banks and had an outstanding balance of approximately $162,000,000. On the
Formation Date, approximately $72,000,000 of this debt (while still an
obligation of the predecessor companies) was forgiven and the balance of
approximately $90,000,000 was transferred to AMC and modified to become
$80,000,000 in principal amount of the Private Placement Notes issued
directly to the individual members of the lending syndicate. In addition,
the members of the lending syndicate received an aggregate of
approximately 10,790,000 shares of common stock of AMC, as well as
warrants to purchase an additional approximately 8,409,000 shares.

- Merchandise Mart Financing: On the Formation Date, the then existing
Merchandise Mart mortgage financing was held by a lending syndicate
comprised of thirteen banks or other financial institutions and had an
outstanding balance of approximately $153,000,000. On the Formation Date,
approximately $60,000,000 of this debt (while still an obligation of the
predecessor companies) was forgiven. A portion of this debt in the amount
of $2,706,639 constituted a Class A claim, which was dealt with as
described above. The balance of approximately $91,000,000 was transferred
to AMC and modified to become the remaining $80,000,000 in principal
amount of the Private Placement Notes issued directly to the individual
members of the lending syndicate. In addition, the members of the lending
syndicate received an aggregate of approximately 11,300,000 shares of
common stock of AMC, as well as warrants to purchase an additional
approximately 8,807,000 shares.

- Gift Mart Financing: On the Formation Date, the then existing Gift Mart
mortgage financing was held by a lending syndicate comprised of five banks
and had an outstanding balance of $107,282,009. On the Formation Date,
this financing was modified to extend the term, to increase the interest
rate and to reflect numerous other changes from the original loan
documentation. See "FORMATION TRANSACTIONS -- Financing -- Gift Mart
Financing."

3
<PAGE> 9

The foregoing transactions are hereinafter referred to collectively as the
"Formation." References herein to the Company mean AMC after the Formation and
the Atlanta Market Center Companies prior thereto.

In the Formation, assets of approximately $214.9 million and liabilities of
approximately $345.4 million, representing all of the assets and liabilities of
the Marts and AMCMC, and the AMM Escrow Bonds and Antecedent Debt Bonds were
transferred to AMC. In addition, AMC received a $3,756,306 Purchase Money Note
of AMC Orlando, Inc., a Florida corporation ("AMC Orlando") and a $446,220
Purchase Money Note of AMC Tampa, Inc., a Florida corporation ("AMC Tampa").
Further, AMC received all of the common stock of LFGP, Inc., a Georgia
corporation ("LFGP") (which holds a 49.9981% general partnership interest in
Portman Lightfair Associates L.P. ("Portman Lightfair")) and of EC Holdings,
Inc., a Georgia corporation ("EC Holdings") (which indirectly holds an interest
in the Embarcadero Center ("EC") and Embarcadero Center West ("ECW") mixed use
complexes located in San Francisco, California). The investments in LFGP and EC
Holdings have insignificant or no carrying values. Finally, AMC received a small
parcel of unimproved property located in Atlanta, Georgia (the "Unimproved
Land") with a carrying value of approximately $0.4 million. See "FORMATION
TRANSACTIONS -- Background."

Financing

As described above under "-- Background," in connection with the Formation,
the Company assumed and modified certain indebtedness related to its assets and
issued debt instruments to certain former creditors as a modification of
existing debt. The following summarizes the terms of the indebtedness
outstanding following the Formation:

- Gift Mart Financing: Atlanta Gift Mart, L.P., the partners of which are
wholly-owned subsidiaries of the Company, assumed an existing mortgage for the
Gift Mart (the "Gift Mart Financing") in the principal amount of $107.3 million
with certain modifications. Such indebtedness is due July 31, 1998, provided
that the term may be extended for one additional year if the Company achieves
specified performance levels. Interest on the Gift Mart Financing is payable at
the prime rate plus 100 basis points or the London Interbank Offered Rate
("LIBOR") plus 200 basis points or the Interbank Offered Rate ("IBOR") plus 200
basis points, at the Company's option. The Company obtained an interest rate cap
to the extent the applicable rate exceeds 9% until September 1998. See
"FORMATION TRANSACTIONS -- Financing -- Gift Mart Financing."

- Revolving Line of Credit: The Company has entered into a revolving line
of credit (the "Revolver") with The Provident Bank which permits borrowings by
the Company of up to $10 million and which matures on October 2, 2000. Interest
on the Revolver accrues at either LIBOR plus 215 basis points or the prime rate
plus 100 basis points, at the Company's option. Borrowings under the Revolver
are available for working capital, capital improvements, mandatory debt service
and acquisition and start-up costs for new trade shows not to exceed $2.5
million. Under the terms of the Revolver, the Company is subject to certain
restrictions on its ability to incur additional debt. See "FORMATION
TRANSACTIONS -- Financing -- Revolving Line of Credit." At May 24, 1996, the
Company had $10 million available under the Revolver.

- The Notes: The Notes, which are due July 31, 2000, bear interest at 7.5%
per annum until July 31, 1997 and at 9.0% per annum thereafter payable quarterly
in arrears. See "THE NOTES" for a description of additional terms of the Notes.

- Antecedent Debt Bonds: An aggregate of $8,033,600 in principal amount of
the Antecedent Debt Bonds were issued in connection with the Formation, of which
$730,327 in principal amount were issued to Atlanta Gift Mart, L.P. and pledged
to the Gift Mart lenders. The Antecedent Debt Bonds are due July 31, 2000 and do
not bear interest. See "FORMATION TRANSACTIONS -- Financing -- Antecedent Debt
Bonds."

- AMM Escrow Bonds: An aggregate of $1,656,007 principal amount of the
Company's AMM Escrow Bonds were issued in connection with the Formation. The AMM
Escrow Bonds mature on July 31, 1997 and bear interest at 8.5% per annum. See
"FORMATION TRANSACTIONS -- Financing -- AMM Escrow Bonds."

4
<PAGE> 10
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Prior to the Formation, the Portman Companies shared personnel who provided
certain services, including risk management, tax services, human resources
services and legal services, to all of such affiliated entities. Following the
Formation, such personnel will continue to provide certain of those services for
both the Company and Portman Holdings pursuant to a series of agreements
described elsewhere herein. Additional services may be provided from time to
time by Portman Holdings and the Company to each other during a transition
period as the need arises. Mr. Portman is both the Chief Executive Officer and
the Chairman of the Board of the Company and the sole shareholder of the general
partner of Portman Holdings. Additionally, certain directors and officers of the
Company and their affiliates own interests in certain trade shows which the
Company manages pursuant to separate management agreements or in certain
entities which are indebted to the Company. See "RISK FACTORS -- Conflicts of
Interest" and "CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS."

THE EXCHANGE OFFER

The Company is undertaking the Exchange Offer pursuant to the Exchange and
Registration Rights Agreement (see "EXCHANGE AND REGISTRATION RIGHTS AGREEMENT")
which was entered into in conjunction with a series of transactions pursuant to
which the Company was organized. See "FORMATION TRANSACTIONS -- Background."

Upon the terms and subject to the conditions set forth in this Prospectus
and in the accompanying Letter of Transmittal, the Company will exchange the
Exchange Notes for Private Placement Notes that are properly tendered on or
prior to the Expiration Date and not withdrawn as permitted pursuant to the
terms of the Exchange Offer.

As of the date of this Prospectus, $160 million in aggregate principal
amount of the Private Placement Notes are outstanding. The Exchange Offer and
withdrawal rights will expire at 12:00 midnight, New York City time, June 25,
1996, unless extended. The Company expressly reserves the right, at any time or
from time to time, to extend the period of time during which the Exchange Offer
is open. The Company expressly reserves the right to amend or terminate the
Exchange Offer and to reject any Private Placement Notes not theretofore
accepted for exchange upon the occurrence of certain conditions of the Exchange
Offer. See "THE EXCHANGE OFFER -- Terms of the Exchange Offer; Period for
Tendering Private Placement Notes."

The form and terms of the Exchange Notes will be identical to the form and
terms of the Private Placement Notes, except that the Exchange Notes have been
registered under the Securities Act. The Exchange Notes will bear interest from
and including their issuance date at the same rate and upon the same terms as
the Private Placement Notes. See "THE EXCHANGE OFFER -- Acceptance of the
Private Placement Notes for Exchange; Delivery of Exchange Notes."

Based upon a series of no-action letters issued by the Division of
Corporate Finance of the Commission concerning registered exchange offers
following private placement transactions, Exchange Notes issued pursuant to the
Exchange Offer in exchange for Private Placement Notes may be offered for
resale, resold and otherwise transferred by a holder thereof (other than a
holder which is an "affiliate" of the Company within the meaning of Rule 405
under the Securities Act), without compliance with the registration and
prospectus delivery provisions of the Securities Act, provided that the Exchange
Notes are acquired in the ordinary course of the holder's business, the holder
has no arrangement with any person to participate in the distribution of the
Exchange Notes, neither the holder nor the transferee is an affiliate of the
Company, and, if the holder is not a broker-dealer, that the holder is not
engaged in and does not intend to engage in a distribution of Exchange Notes,
and each holder delivers representations as to the foregoing to the Company. See
"THE EXCHANGE OFFER -- Resales of the Exchange Notes."

5
<PAGE> 11

RISK FACTORS

Holders of Private Placement Notes should consider certain factors
discussed under "RISK FACTORS," as well as the other information set forth
herein, in evaluating whether or not to tender such securities in the Exchange
Offer.

THE NOTES

The Notes, which are due July 31, 2000, bear interest at 7.5% per annum
until July 31, 1997 and at 9.0% per annum thereafter payable quarterly in
arrears. Upon the earlier of the one hundred twentieth (120th) day following the
end of each fiscal year or the thirtieth (30th) day following the completion of
the annual reports required by the Indenture, the Company is required to repay
the principal amount of the Notes to the extent of 50% of the Company's annual
cash operating revenues in excess of the sum of (i) the Company's operating
expenses, real estate taxes and insurance costs; (ii) mandatory debt service and
debt reduction on the Gift Mart Financing, the AMM Escrow Bonds, the Antecedent
Debt Bonds, the Notes, the Revolver and any other debt permitted under the
Notes; (iii) the Company's income taxes; and (iv) $10 million. Indebtedness
under the Notes is secured by a deed to secure debt on both the Apparel Mart and
the Merchandise Mart properties and the pledge of related assets, subject to the
prior lien securing the Revolver. See "THE NOTES -- Redemption."

The terms of the Indenture limit the Company's ability to engage in certain
activities, including, among other things, declaring dividends, making
distributions, incurring debt, selling or leasing its property and assets and
engaging in any line of business other than the ownership and management of
trade marts, trade shows and related activities. See "THE NOTES -- Restrictions
on Activities of the Company."

Additionally, upon a Change of Control (as defined under "THE NOTES") any
holder may require the Company to repurchase all or any part of such holder's
Notes at a cash purchase price equal to 101% of the principal amount thereof,
plus accrued and unpaid interest to the date of repurchase, if any. See "THE
NOTES -- Redemption."

The Notes are secured by deeds to secure debt on the Apparel Mart and the
Merchandise Mart, which are subordinated to the deed to secure debt on these
properties which secures the obligations of the Company under the Revolver.
Accordingly, the rights of holders of the Notes are subordinated to the rights
of the lenders under the Revolver, as to the Apparel Mart and the Merchandise
Mart. The rights of the holders of the Notes also are subordinated to the rights
of the Gift Mart Financing lenders, as to the Gift Mart. See "THE
NOTES -- Collateral for the Notes."

CERTAIN FEDERAL INCOME TAX CONSIDERATIONS

Federal Income Tax Consequences of Exchange of Notes

Even if the exchange of Notes is not treated as a continuation of the
Private Placement Notes, any exchange of Notes should constitute a
recapitalization of the Company within the meaning of Section 368(a)(1)(E) of
the Internal Revenue Code of 1986, as amended (the "Code"), which would be a
tax-free transaction to the holders, except to the extent the principal amount
of securities received exceeds the principal amount of securities surrendered
therefor. Thus, the Company has obtained an opinion that the holder of a Private
Placement Note should not recognize gain or loss upon the exchange of such
Private Placement Notes for Exchange Notes; the holder's basis in the Exchange
Notes should be the same as its basis in the Private Placement Notes; and the
holder's holding period for the Exchange Notes for federal

6
<PAGE> 12

income tax purposes should include any holding period for the Private Placement
Notes. Such opinion is not binding on the Internal Revenue Service (the
"Service") or any court, and, accordingly, there can be no assurance that the
Service will not assert successfully a contrary position. See "CERTAIN FEDERAL
INCOME TAX CONSIDERATIONS -- Consequences of Exchange of Notes to the Holders."

If the Exchange Notes issued in the Exchange Offer are not treated as a
continuation of the Private Placement Notes, however, substantial cancellation
of indebtedness income to the Company could arise if the Private Placement Notes
or the Exchange Notes are "traded on an established securities market" within
the meaning of Section 1273(b)(3) of the Code. The Company believes that any
such cancellation of indebtedness income should be income to the previous owners
of the Apparel Mart and the Merchandise Mart and not to the Company. If not,
however, the Company could face a substantial tax liability which might have a
material adverse impact on the Company and its ability to pay interest and
principal on the Notes. See "CERTAIN FEDERAL INCOME TAX
CONSIDERATIONS -- Consequences of Exchange of Notes to the Company."

Original Issue Discount

The Exchange Notes will be treated as issued with original issue discount
("OID") for federal income tax purposes. Such OID will be included in the income
of the holders of the Notes for federal income tax purposes under a constant
yield method. Thus, holders of Notes may be required to include amounts in
income prior to the receipt of cash. The precise amount of OID cannot be
determined at this time. At a minimum, such OID will include all amounts of
interest payable under the Indenture in excess of 7.5% per annum. Additional OID
will exist if the Notes are "traded on an established securities market" within
the meaning of Section 1273(b)(3) of the Code and their fair market value at the
time of issuance is less than their face amounts. See "CERTAIN FEDERAL INCOME
TAX CONSIDERATIONS -- Interest Income to Holders of Exchange Notes."

SUMMARY SELECTED FINANCIAL DATA

7
<PAGE> 13

<TABLE>
<CAPTION>
PERIOD FROM PERIOD FROM PERIOD FROM
OCTOBER 2, 1995 OCTOBER 1, 1994 JANUARY 1, 1995 YEAR ENDED DECEMBER 31,
THROUGH THROUGH THROUGH ---------------------------------------------------
FEBRUARY 29, 1996 FEBRUARY 28, 1995 OCTOBER 1, 1995 1994 1993 1992 1991 1990
----------------- ----------------- --------------- -------- -------- -------- ------- --------
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF
OPERATIONS DATA:
Revenues........ $28,933 $28,072 $54,840 $ 64,201 $ 63,177 $ 61,930 $54,040 $ 54,055
Operating expenses,
exclusive of
depreciation
and amortization... 15,724 15,133 29,124 37,677 35,205 34,777 28,379 29,076
Depreciation and
amortization.. 5,569 6,016 9,549 13,527 14,472 12,811 8,023 8,063
------- ------- ------- -------- -------- -------- ------- --------
Operating
income...... 7,640 6,923 16,167 12,997 13,500 14,342 17,638 16,916
Interest
expense....... 3,553 13,042 25,560 25,946 24,018 28,840 23,903 32,935
Other expenses
(income)...... (157) 11 (199) 373 (310) (415) 2,381 727
Income tax
expense....... 1,613 -- -- -- -- -- -- --
------- ------- ------- -------- -------- -------- ------- --------
Income (loss)
before
extraordinary
item........ $ 2,631 $(6,130) $(9,194) $(13,322) $(10,208) $(14,083) $(8,646) $(16,746)
======= ======= ======= ======== ======== ======== ======= ========
Income (loss)
before
extraordinary
item per
share -- primary... $ .04 $ (a) $ (a) $ (a) $ (a) $ (a) $ (a) $ (a)
======= ======= ======= ======== ======== ======== ======= ========
Income (loss)
before
extraordinary
item per
share -- fully
diluted....... $ .04 $ (a) $ (a) $ (a) $ (a) $ (a) $ (a) $ (a)
======= ======= ======= ======== ======== ======== ======= ========
</TABLE>

<TABLE>
<CAPTION>
DECEMBER 31,
FEBRUARY 29, OCTOBER 1, -------------------------------------------------------------
1996 1995 1994 1993 1992 1991 1990
------------ ---------- --------- --------- --------- --------- ---------
(AMOUNTS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:
Total assets................... $ 238,159 $ 215,348 $ 213,675 $ 219,903 $ 236,739 $ 241,925 $ 204,313
Corporate notes/mortgage loans
payable...................... 335,342 354,505 407,532 410,541 414,094 399,440 347,906
Long-term advances from
affiliate.................... -- -- 12,048 12,048 12,048 12,048 12,048
Deficit........................ $ (107,857) $ (152,165) $(231,015) $(220,210) $(207,966) $(191,024) $(177,795)
=========== ========= ========= ========= ========= ========= =========
</TABLE>

- ---------------

(a) Not applicable.
(b) For purposes of computing the ratio of earnings to fixed charges, earnings
represent operating income plus other income and minus other expenses as
indicated above plus land rental expense. Fixed charges consist of interest
expense, inclusive of amortization of debt expense and related interest
costs on the Notes that will be recorded as a reduction of the carrying
value of the Notes when paid, and land rental expense. For all periods shown
except for the period from October 2, 1995 through February 29, 1996,
earnings were inadequate to cover fixed charges. On a pro forma basis
(unaudited), assuming the debt restructuring had occurred prior to January
1, 1994, the ratio of earnings to fixed charges for the period from January
1, 1995 through October 1, 1995 and for the year ended December 31, 1994 is
1.03 and 0.65, respectively.

8
<PAGE> 14
RISK FACTORS

FINANCING RISKS

Highly Leveraged Position

Upon formation the Company had long-term debt with a face amount of
approximately $276 million. The interest costs on such indebtedness will have a
significant negative effect on the Company's cash flow. Interest on the
Revolver, which permits borrowings of up to $10 million, accrues at either LIBOR
plus 215 basis points or the prime rate plus 100 basis points, at the Company's
option. Interest on the $107 million Gift Mart Financing is payable at the prime
rate plus 100 basis points or LIBOR plus 200 basis points or IBOR plus 200 basis
points, at the Company's option. In the event of increases in the interest rates
on the Company's indebtedness under the Gift Mart Financing or the Revolver or
in connection with any refinancing of any of the Company's indebtedness, the
Company's interest costs will increase. The amount of the Company's indebtedness
makes the Company more vulnerable to extended economic downturns and limits the
Company's flexibility to adjust to changing economic conditions.

Restrictions on Additional Indebtedness; Possible Deficiencies of Cash Flows

The terms of the Revolver limit the Company's ability to obtain additional
financing for working capital, capital expenditures, acquisitions and other
purposes. Similarly, the Notes limit the ability of the Company to incur
additional indebtedness. During 1996, the Company will be required to repay
approximately $1.0 million of the principal amount of its indebtedness under the
AMM Escrow Bonds, of which the Company had paid approximately $500,000 at March
31, 1996. Principal payments to reduce the indebtedness under the Gift Mart
Financing and the Notes will be determined based upon cash flows of the Gift
Mart and of the Company, respectively. While the Company had remaining
availability of $10 million under the Revolver at May 24, 1996, to the extent
the Company requires additional funds to satisfy interest costs, repay
indebtedness or fund capital expenditures or acquisition costs, it must rely
upon cash flows from its operations and proceeds from the liquidation of certain
of its non-Mart assets. Historically, the Company has had insufficient funds to
cover its fixed charges. There can be no assurance that the Company will have
sufficient cash flows to satisfy all of its obligations as they come due.

Limitations on Uses of Cash Flows

The terms of certain of the Company's indebtedness restrict the uses of
certain cash flows of the Company. For example, the Gift Mart Financing requires
that all net cash flows from the Gift Mart, subject to limited exceptions, be
utilized to reduce indebtedness thereunder. Similarly, reduction of the
principal amount of the Notes is required if the Company achieves certain levels
of cash flows. As a result of such provisions, a substantial portion of the
Company's cash flows must be used for repayment of indebtedness and will not be
available for the Company's operations for such purposes as implementing capital
improvements or business expansion.

Necessity of Approval of Gift Mart Lenders

The Company's ability to operate the Gift Mart may be adversely impacted by
the exercise of certain rights of the lenders under the Gift Mart Financing,
including, without limitation, the right to approve Gift Mart budgets, to
sequester all Gift Mart receipts as additional security, to approve capital
projects and to disburse funds for payment of operating costs. In addition, the
construction of additional aerial walkways between the Gift Mart and the other
Marts, which is a key component of the Company's business plan, will require,
among other things, approval by such lenders. There can be no assurance that
such rights will not limit the ability of management of the Company to operate
its business in the manner it deems prudent.

Cross-Defaults

The terms of certain of the Company's indebtedness define events of default
thereunder to include certain defaults under the Company's other indebtedness.
In addition, in the event of a default under the Gift Mart Financing, certain
intercompany payments to the Company pursuant to a management agreement and tax

9
<PAGE> 15

sharing agreement may be suspended. Under the terms of the Gift Mart Financing,
events of default include involuntary termination of Mr. Portman and John M.
Ryan, President and a director of the Company, in certain circumstances, and the
death or incapacity of Mr. Portman. In the event of default that results in
acceleration, the Company would be unable to meet its debt obligations unless it
could obtain alternative financing. See "FORMATION
TRANSACTIONS -- Financing -- Gift Mart Financing."

Possible Inability of Debtors to Make Payments

The AMM Escrow Bonds are secured by notes issued by owners of two trade
shows (AMC Tampa and AMC Orlando), which provide for payments thereunder in
amounts sufficient to service the Company's indebtedness under the AMM Escrow
Bonds. AMC Tampa, which owed the Company approximately $395,322 as of February
29, 1996, has advised the Company that it may have difficulty meeting its
interest and principal repayment obligations thereunder; accordingly, the
Company and AMC Tampa are currently negotiating a deferral of certain principal
payments due prior to maturity thereunder. While the Company has no reason to
believe that the note issued by the owners of AMC Orlando (which exceeds the
amount of debt outstanding under the AMM Escrow Bonds) will not be paid when
due, in the event of nonpayment the Company must meet its obligations under the
AMM Escrow Bonds from other sources.

Need to Refinance

Upon the Formation, indebtedness under the Gift Mart Financing was
outstanding in the principal amount of $107 million. Such indebtedness will
become due two years prior to the scheduled maturity date of the Notes (or one
year prior, if the Company qualifies for an extension option). The Company
expects it will be required to refinance the Gift Mart Financing in order to
repay its indebtedness thereunder at maturity. There can be no assurance that
the Company will be able to refinance the Gift Mart Financing or otherwise
obtain funds necessary to repay such indebtedness. See "-- Cross-Defaults."
Further, in the event the Company is unable to repay the indebtedness under the
Gift Mart Financing at maturity, the lenders thereunder would be entitled to
foreclose on the Gift Mart, thereby impairing the ability of the Company to meet
its obligations under the Notes. In the event of foreclosure, the Company's
remaining business would be adversely affected due to, among other things, the
loss of cross-selling opportunities and the loss of certain economies of scale.
See "FORMATION OF THE COMPANY -- Financing."

The Company also expects it will be required to refinance the principal
amount of $160 million of the Notes in order to repay them when they mature on
July 31, 2000 because the Company does not expect to generate sufficient funds
from operations to pay the principal amount of the Notes upon their scheduled
maturity date. There can be no assurance that the Company will be able to
refinance the Notes or otherwise to obtain funds for the repayment thereof. See
"MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS -- Liquidity and Capital Resources."

ADDITIONAL RISKS ASSOCIATED WITH THE NOTES

Original Issue Discount

The Exchange Notes will be treated as issued with OID for federal income
tax purposes. Such OID will be included in the income of the holders of the
Notes for federal income tax purposes under a constant yield method. Thus,
holders of Notes may be required to include amounts in income prior to the
receipt of cash. The precise amount of OID cannot be determined at this time. At
a minimum, such OID will include all amounts of interest payable under the
Indenture in excess of 7.5% per annum. See "CERTAIN FEDERAL INCOME TAX
CONSIDERATIONS -- Interest Income to Holders of Exchange Notes."

Lack of Market for Notes

There is no public market for the Private Placement Notes, and the Company
does not believe it is likely that any such market will develop for the Private
Placement Notes or the Exchange Notes. The Company does not intend to list the
Exchange Notes on any securities exchange. Consequently, holders of the Notes
may be required to bear the economic risk of ownership thereof for an indefinite
period of time, and in the event a holder is able to sell its Notes, such holder
may be required to sell at a substantial discount.

10
<PAGE> 16

Possible Alternative Transactions

Portman Holdings has advised the Company that it is considering various
alternatives pursuant to which it may offer to purchase Notes and common stock
of the Company from certain of the holders thereof. There can be no assurance as
to when or if any such offer may be made or as to the terms thereof.

POTENTIAL TAX RISKS OF EXCHANGE OFFER FOR THE COMPANY

Although there is no precedent directly on point or closely analogous,
because the economic rights of the holders against the Company are not being
modified, the Company intends to take the position that the exchange of Exchange
Notes for Private Placement Notes should be treated as a continuation of the
corresponding Private Placement Notes. If this position is correct, there should
be no tax consequences to the Company or the holders from the exchange of Notes.
If such an exchange is instead found to be a significant modification of the
Private Placement Notes for federal income tax purposes, however, substantial
cancellation of indebtedness income could arise if the Private Placement Notes
or the Exchange Notes are "traded on an established securities market" within
the meaning of Section 1273(b)(3) of the Code. The Company intends to take the
position that any such cancellation of indebtedness income should be income to
the previous owners of the Apparel Mart and the Merchandise Mart and not to the
Company. If not, however, the Company could face a substantial tax liability
which might have a material adverse impact on the Company and its ability to pay
interest and principal on the Notes. The Company has not obtained an opinion of
counsel or a ruling by the Service as to this issue, and accordingly, holders of
Notes are urged to consult their own tax advisors as to the impact of this
potential tax liability on the Company and on their position as holders of the
Notes. See "CERTAIN FEDERAL INCOME TAX CONSIDERATIONS -- Consequences of
Exchange of Notes to the Company."

INDUSTRY RISKS

Competition

The Company's Marts and trade shows are subject to all operating risks
common to the trade show industry. These risks include competition from existing
trade marts and trade shows throughout the United States, competition from
entities that may have greater financial resources than the Company, competition
from new or additional trade marts and competition from the development of
alternative distribution methods. Some major national trade shows which compete
with the Company's Marts and trade shows are held simultaneously with or within
a short time period of the Company's trade shows. The Company often competes
with these shows for Manufacturers and buyers who may attend only a single show.
Certain of the Company's competitors may have greater financial resources than
the Company. In addition, new or additional trade marts or trade shows may be
organized by existing competitors or new market entrants which may adversely
impact the Company's operations. For example, the Inforum, a building located
adjacent to the Company's Marts, was designed and developed as a trade mart and
conference center, and it is possible that portions of the Inforum could be
operated as some form of a trade mart in the future in competition with the
Company. In addition, the Company's business may be adversely affected by
alternative distribution methods such as direct sales by Manufacturers.
Developments in telecommunications may further adversely affect the Company's
business through the establishment of additional means of direct contact between
Manufacturers and buyers. There can be no assurance that alternative
distribution channels will not grow or be developed which could have a material
adverse impact on the Company. See "BUSINESS AND PROPERTIES -- Competition."

Impact of Industry Trends and Economic Activity

In recent years, the Company has experienced declining demand for its
showrooms and trade shows in certain industries, although there has been growth
in certain other industries. Because the wholesale trade mart business is a
mature industry, there are limited opportunities for growth; accordingly, there
can be no assurance that there will not be further declines in the demand for
the Company's services. See "BUSINESS AND PROPERTIES -- Competition."

11
<PAGE> 17

Wholesaling activities, on which the Company's revenues depend, are
affected by the general level of economic activity in the United States.
Economic factors which affect retailing such as interest rates, economic growth
and consumer confidence also have a direct impact on the Company's business. In
addition, economic conditions in the housing industry have a direct impact on
the demand for many of the products offered through the Company's Marts and
trade shows.

OPERATING RISKS

Possible Inability to Expand or Introduce Industries

The success of the Company's Marts is dependent upon the Company's ability
both to expand existing industries in its Marts and to identify and introduce
new industries in its Marts. The expansion of existing industries and the
development of new industries in the Marts involves significant costs and may
require that the Company provide significant concessions to attract new tenants
which the Company may be unable to recoup. For example, as discussed in
"BUSINESS AND PROPERTIES -- The Marts -- Apparel Mart and Trade Shows," as of
February 29, 1996, only approximately 45.9% of the total rentable square feet in
the Apparel Mart designated for the International Sports Plaza ("ISP") was
leased. There can be no assurance that the Company will be able to attract
sufficient tenants to the space allocated to the ISP for it to operate
profitably. In the event of the loss or decline of tenants in any of the Marts,
there can be no assurance that the Company can successfully expand existing
industries or introduce and develop a new industry to replace such tenants. See
"BUSINESS AND PROPERTIES -- Company Strategy."

Possible Inability to Expand or Acquire Trade Shows

The Company seeks opportunities to manage and, in limited circumstances, to
acquire additional existing trade shows. The Company's profitability will
depend, in part, on its ability to identify trade shows which have the potential
for growth and to negotiate favorable management or acquisition agreements
therefor. The terms of the Notes and the Revolver limit the Company's recourse
borrowings to acquire trade shows to $2.5 million. Accordingly, unless the
Company generates revenues in excess of the amount of its operating expenses and
debt service requirements, its ability to expand will be severely limited.
Because the Company will compete for trade shows with other operators who may
have significantly greater financial and other resources than the Company, there
can be no assurance that it can obtain management of or acquire additional trade
shows. See "BUSINESS AND PROPERTIES -- Independent Trade Shows."

Possible Termination of Existing Trade Show Management Contracts; Potential
Losses from Trade Shows and Special Events

The Company's existing trade show management contracts are terminable by
the trade show owners in the event that certain cash flow targets are not met in
a given year. There can be no assurance that such targets will be met. The
Company is also involved in the development of new trade shows and special
events which requires the expenditure of capital on a speculative basis because
the ultimate profitability of such ventures cannot be determined until
substantial costs are incurred. While the Company has experienced success with
certain existing trade shows, the Company and its affiliates have also
experienced losses in connection with the development of certain other trade
shows and special events in the past. Certain trade shows managed by the Company
in the past were unable to operate profitably as a result of competing trade
shows. There can be no assurance that the Company will be able to successfully
operate its trade shows for which there is substantial competition in the
future. See "BUSINESS AND PROPERTIES -- Independent Trade Shows" and "-- Special
Events."

REAL ESTATE RISKS

Possible Illiquidity; Impact of Local Market Conditions

The Company's assets are subject to the risks incident to ownership of real
property. Real estate investments are relatively illiquid. Further, the value of
the Company's real estate will be affected by general economic conditions in the
southeastern U.S. and, in particular, in Atlanta, Georgia and changes in local
real

12
<PAGE> 18

estate market conditions. Accordingly, there can be no assurance that the market
value of any of the Company's properties, which constitute its principal assets
that secure its indebtedness, including the Notes, will not decrease.

Need for Capital Improvements

The Marts require substantial capital improvements regularly, not only to
attract and retain tenants, but also to comply with governmental requirements.
Total capital expenditures were $6.2 million in the period from January 1, 1995
through October 1, 1995, $12.0 million in 1994, $4.3 million in 1993 and $10.6
million in 1992. Management expects that capital expenditures, including tenant
improvements, of approximately $7.0 million to $9.0 million will be needed to
improve and maintain the buildings during the fiscal year ending August 31,
1996. However, there can be no assurances that changes in the competitive
environment, governmental regulations or unforeseen loss or damage will not
cause capital expenditures to exceed management's estimate. See " -- Forward
Looking Statements," and "Management's Discussion and Analysis of Financial
Condition and Results of Operations -- Liquidity and Capital Resources." As the
Marts age, the necessary capital expenditures related thereto may increase. The
ability of the Company to pay for such expenditures is limited by the terms of
its financing. See "FORMATION TRANSACTIONS -- Financing."

Risks Associated With Tenants' and Exhibitors' Financial Condition

Many of the Company's tenants and other exhibitors are small businesses
and, as such, generally experience a higher rate of bankruptcy, business failure
and other financial difficulties than larger businesses. In the event of a
default by a tenant, the Company may experience delays in receipt of payments
and incur costs in attempting to collect lease payments or otherwise enforcing
its rights which adversely impact its revenues. From January 1992 to February
1996 the Company experienced average bad debt expense as a percentage of rental
revenues of 2.30%. There can be no assurance that tenant defaults will not
increase. The average collection period for accounts receivable was
approximately 29 days, 28 days and 26 days for 1995, 1994 and 1993,
respectively. Tenant accounts receivable was approximately $4,409,000 as of
February 29, 1996.

Short-term Leases; Renewal of Leases and Reletting of Space; Group Action of
Tenants

The Company is subject to the risk that space in the Marts may, upon
expiration of current leases, not be re-leased or may be re-leased on terms less
favorable to the Company than current lease terms. The average term of a
showroom lease in the Marts is approximately three years. The short-term nature
of the leases subjects the Company to the risk of rate fluctuations to a greater
extent than landlords who lease for longer terms. The percentage of total
rentable square feet of each of the Marts which are subject to leases which
expire during calendar year 1996 are as follows: Merchandise Mart: 23%; Apparel
Mart: 23%; and Gift Mart: 32%.

Additionally, some of the tenants of the Company are members of trade
associations or other groups which seek to promote the common interests of their
memberships. While such associations and groups have not been successful in
negotiating with the Company on a collective basis, there can be no assurance
the tenants will not attempt to act collectively in the future.

Nature of Buildings; Interrelated Valuation of Assets

The Marts were designed and developed to be wholesale trade mart facilities
and cannot be converted to an alternative use without substantial capital
investment. In the event that the Marts cannot be operated profitably as such,
there can be no assurance that the Company will be able to obtain the necessary
capital to convert these facilities to another use.

Further, because of the importance of cross-selling opportunities and
certain efficiencies of scale, the loss of the business of any of the Marts
would adversely impact the Company's ability to operate the remaining Marts
profitably.

13
<PAGE> 19

Possible Environmental Liability

As an owner or operator of real property, the Company may be liable for the
cost of removal or remediation of certain hazardous substances located in, on or
under its property, pursuant to various federal, state and local laws,
ordinances and regulations. These laws may impose liability without regard to
whether the Company knew of, or was responsible for, the presence of the
hazardous substances. Any required remediation or removal of such substances may
involve substantial costs. The Company is unaware of any hazardous substances
in, on or under the properties it currently owns or operates that requires
removal or remediation. However, the presence of hazardous substances, or the
failure properly to remediate such substances when present, may adversely affect
the Company's ability to sell or rent such real property or to borrow money
using such real property as collateral. Furthermore, some environmental laws may
create a lien on a contaminated site in favor of the government for damages and
costs it incurs in connection with remediation of hazardous or toxic substances.
The Company may also be subject to claims by third parties resulting from
environmental contamination emanating from property it owns or operates. No
assurances can be given that future legislation will not impose significant
additional obligations on the Company. See "BUSINESS AND PROPERTIES --
Governmental Regulation -- Environmental Matters."

Compliance With Americans With Disabilities Act

Under the Americans With Disabilities Act (the "ADA"), "public
accommodations" such as the Marts, are required to meet certain federal
requirements relating to access and use by persons with disabilities. In order
for certain public areas of the Marts to comply with the requirements of the
ADA, structural barriers to handicapped access must be removed, where removal is
"readily achievable." A number of additional federal, state and local laws exist
which may also require modifications to the Marts, or restrict certain
renovations thereof, with respect to access thereto by disabled persons.
Noncompliance with the ADA or any of such other laws may result in the
imposition of fines or an award of damages to private plaintiffs. The Company
believes that the cost of bringing all of the Marts into compliance with the ADA
will not be material. However, in the event additional changes are necessitated
as a result of future legislation or otherwise, the Company's operations could
be adversely affected. See "BUSINESS AND PROPERTIES -- Governmental
Regulation -- Americans With Disabilities Act."

Possible Uninsured or Underinsured Losses

The Company carries liability, fire, extended coverage and rental loss
insurance covering all of the Marts, with policy specifications and limits which
the Company believes are of the type and amount customarily obtained for or by
an owner on real property assets. Insurance for certain types of losses (such as
from earthquakes or wars) is not generally obtained because such losses are
either uninsurable or not economically insurable. In the event of a loss that is
uninsured or for which insurance coverage is insufficient to pay the full value
or replacement cost of any damage, the Company would be unable to replace the
property damaged or destroyed unless it could obtain additional financing.
However, the ability of the Company to incur additional indebtedness is
restricted by the terms of its current indebtedness. See "FORMATION
TRANSACTIONS -- Financing."

CONTROL OF BOARD OF DIRECTORS; CHANGE OF CONTROL

Pursuant to the Shareholders Agreement, dated as of October 2, 1995, among
the Company and the shareholders of the Company named therein, as amended (the
"Shareholders Agreement"), Portman Holdings has the right to designate all of
the members of the Board of Directors of the Company until 1997 and a majority
until 2000 subject to certain limitations, including the death or resignation of
Mr. Portman. Portman Holdings presently owns 17.5% of the common stock of the
Company and none of the Notes. Accordingly, the interests of Portman Holdings
may differ from those of the Company's lenders, including the holders of the
Notes. See "THE SHAREHOLDERS AGREEMENT." Additionally, in the event Portman
Holdings were to acquire any of the Notes, its interests may be different from
those of the other holders of the Notes. For a discussion of the potential
impacts of such acquisition see, "THE NOTES -- The Indenture."

14
<PAGE> 20

Certain Changes of Control (as defined under "THE NOTES") in the Company
would give rise to the right of the holders of the Notes to require redemption
thereof. The transfer of shares of common stock of the Company is not restricted
by the terms of any agreement other than for compliance with applicable
securities laws. Accordingly, there can be no assurance that such a Change of
Control of the Company will not occur. If such event did occur, if the Company
was unable to redeem the Notes as required under the Indenture, an event of
default could be declared by the holders of the Notes. Upon such event of
default, the Company would be, by reason of cross-default provisions, in default
under the Gift Mart Financing, the Revolver, the Antecedent Debt Bonds and the
AMM Escrow Bonds, which represent an aggregate of up to $127.0 million of
indebtedness, and would be required to make payments to the creditors of the
Gift Mart Financing and the Revolver prior to redeeming the Notes. See
"-- Financing Risks -- Cross-Defaults." Accordingly, unless the Company could
refinance all such indebtedness following a default, the Company would not be
able to make the payments required under the terms of its indebtedness,
including the Notes. See "THE NOTES -- The Indenture -- Redemption."

CONFLICTS OF INTEREST

Mr. Portman is both the Chief Executive Officer and the Chairman of the
Board of the Company and the sole shareholder of the general partner of Portman
Holdings. Portman Holdings and its affiliates and certain employees of the
Company have interests in the entities which own the California Gift Show, the
Florida Gift Shows, the Orlando Surf Expo and Lightfair, which are trade shows
managed by the Company. In addition, the Company and Portman Holdings are
parties to certain agreements pursuant to which each provides certain services
to the other, which agreements are negotiated between the executives of the
Company and Portman Holdings and which have been approved by the independent
directors of the Company. Mr. Portman devotes a portion of his time to the
affairs of Portman Holdings. Additionally, Mr. Portman and members of his family
own interests in entities that are indebted to the Company. See "CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS." The foregoing relationships and
agreements may result in conflicts of interest.

Mr. Portman is a party to a Noncompetition Agreement dated as of October 2,
1995 which provides that Mr. Portman will not directly or indirectly own and/or
manage trade marts, trade shows, special events or consumer shows within 13
specified counties in the State of Georgia for a period of three years from the
date thereof. See "BUSINESS AND PROPERTIES -- Noncompetition Agreement."

FORWARD LOOKING STATEMENTS

"Safe Harbor" Statement under the Private Securities Litigation Reform Act of
1995

A number of the matters and subject areas discussed in the foregoing "Risk
Factors" section and in "Management's Discussion and Analysis of Financial
Condition and Results of Operations -- Liquidity and Capital Resources" that are
not historical or current facts deal with potential future circumstances and
developments. The discussion of such matters and subject areas is qualified by
the inherent risks and uncertainties surrounding future expectations generally,
and also may materially differ from the Company's actual future operations
involving any one or more of such matters and subject areas. The Company has
attempted to identify, in context, certain of the factors that it currently
believes may cause actual future operations and results to differ from the
Company's current expectations regarding the relevant matter or subject area.
The operations and results of the Company's business also may be subject to the
effect of other risks and uncertainties in addition to the relevant qualifying
factors identified in the foregoing "Risk Factors" section, including, but not
limited to, general economic conditions in the U.S. and specifically in the
Southeast and in the industries represented at the Marts, the inability of the
Company to generate sufficient funds to make required payments under the terms
of its indebtedness or the inability to respond to changes in the wholesale Mart
industry.

15
<PAGE> 21

USE OF PROCEEDS

The Private Placement Notes were originally issued as a modification of
existing indebtedness and resulted in no cash proceeds to the Company. See
"FORMATION TRANSACTIONS -- Background." The Company will not receive any
proceeds from the issuance of the Exchange Notes offered hereby. In
consideration for the Exchange Notes, the Company will receive a like principal
amount of Private Placement Notes, which were issued by the Company as of
October 2, 1995, the terms of which are identical in all material respects to
the Exchange Notes. The Private Placement Notes surrendered in exchange for the
Exchange Notes will be retired. Accordingly, the issuance of the Exchange Notes
will not result in any change in the indebtedness of the Company.

16
<PAGE> 22

THE EXCHANGE OFFER

GENERAL

TERMS OF THE EXCHANGE OFFER; PERIOD FOR TENDERING PRIVATE PLACEMENT NOTES

As of the date of this Prospectus, $160 million in aggregate principal
amount of the Private Placement Notes are outstanding. This Prospectus, together
with the Letter of Transmittal, is first being sent on or about the date of this
Prospectus to all registered holders of the Private Placement Notes. The
Company's obligation to accept the Private Placement Notes for exchange is
subject to certain conditions set forth below under "-- Certain Conditions to
the Exchange Offer."

The Exchange Offer and withdrawal rights will expire at 12:00 midnight, New
York City time on June 25, 1996, unless extended. The Company expressly reserves
the right, at any time or from time to time, to extend the period of time during
which the Exchange Offer is open, by giving written notice of such extension to
the Exchange Agent and by making a public announcement thereof. The Company will
give notice by press release of any extension as promptly as practicable, such
notice in the case of any extension to be issued no later than 9:00 A.M., New
York City time, on the next business day following the previously scheduled
Expiration Date. For purposes of the Exchange Offer, a "business day" means any
day other than a Saturday, Sunday, or a federal holiday and consists of the time
period from 12:01 A.M. through Midnight, New York City time. During any such
extension, all Private Placement Notes previously tendered and not accepted for
exchange will remain subject to the Exchange Offer and may, subject to the terms
and conditions set forth in this Prospectus and in the Letter of Transmittal, be
accepted for exchange by the Company, subject to the withdrawal rights of
tendering holders.

The Company expressly reserves the right to amend the Exchange Offer and to
reject any Private Placement Notes not theretofore accepted for exchange upon
the occurrence of certain conditions of the Exchange Offer specified below under
"-- Certain Conditions to the Exchange Offer." In the event the Exchange Offer
is terminated, the Private Placement Notes not accepted for exchange will be
returned without expense to the tendering holder as promptly as practicable
thereafter.

PROCEDURES FOR TENDERING PRIVATE PLACEMENT NOTES

The tender by a holder of Private Placement Notes in the manner set forth
below and the acceptance thereof by the Company will constitute a binding
agreement between the tendering holder and the Company, upon the terms and
subject to the conditions set forth herein and in the accompanying Letter of
Transmittal. Except as set forth below or in the accompanying Letter of
Transmittal, a holder who wishes to tender Private Placement Notes for exchange
pursuant to the Exchange Offer must transmit the Private Placement Notes,
together with a properly completed and duly executed Letter of Transmittal, and
all other documents required thereby, to the Exchange Agent at its address set
forth therein on or prior to the Expiration Date.

THE METHOD OF DELIVERY OF THE PRIVATE PLACEMENT NOTES, LETTERS OF
TRANSMITTAL, AND ALL OTHER REQUIRED DOCUMENTS IS AT THE ELECTION AND RISK OF THE
TENDERING HOLDERS. IF SUCH DELIVERY IS BY MAIL, IT IS RECOMMENDED THAT
REGISTERED MAIL, PROPERLY INSURED, WITH RETURN RECEIPT REQUESTED, BE USED. IN
ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ASSURE

17
<PAGE> 23

TIMELY DELIVERY. THE LETTER OF TRANSMITTAL AND THE PRIVATE PLACEMENT NOTES
SHOULD NOT BE SENT TO THE COMPANY.

Each signature on a Letter of Transmittal or a notice of withdrawal, as the
case may be, must be guaranteed unless the Private Placement Notes surrendered
for exchange pursuant thereto are tendered (i) by a registered holder who has
not completed either the box entitled "Special Exchange Instructions" or the box
entitled "Special Delivery Instructions" on the Letter of Transmittal or (ii) by
an Eligible Institution (as defined below). In the event that a signature on a
Letter of Transmittal or a notice of withdrawal, as the case may be, is required
to be guaranteed, such guaranty must be by a firm which is a member of a
registered national securities exchange or a member of the National Association
of Securities Dealers, Inc., or by a commercial bank or trust company having an
office or correspondent in the United States and, in each instance, which is a
participant in the Securities Transfer Agent Medallion Program or similar
program (collectively, "Eligible Institutions"). If the Private Placement Notes
are registered in the name of a person other than the signer of the Letter of
Transmittal, the Private Placement Notes surrendered for exchange must either
(i) be endorsed by the registered holder, with the signature thereon guaranteed
by an Eligible Institution or (ii) be accompanied by a bond power, duly executed
by the registered holder, with the signature thereon guaranteed by an Eligible
Institution. The term "registered holder" as used herein with respect to the
Private Placement Notes means any person in whose name the Private Placement
Notes are registered on the books of the Trustee, which is currently the
registrar for the Notes.

Tenders may be made in principal amounts of $1.00 and integral multiples
thereof. Subject to the foregoing, holders may tender less than the aggregate
principal amounts represented by the Private Placement Notes deposited with the
Exchange Agent provided they appropriately indicate this fact on the Letter of
Transmittal accompanying the tendered Private Placement Notes. The Exchange
Offer is not conditioned upon any minimum principal amount of Private Placement
Notes being tendered for exchange.

All questions as to the validity, form, eligibility (including time of
receipt), acceptance, and withdrawal of Private Placement Notes tendered for
exchange will be determined by the Company in its sole discretion, which
determination shall be final and binding. The Company reserves the absolute
right to reject any and all tenders of any Private Placement Notes not properly
tendered or to reject any Private Placement Notes, the acceptance of which
might, in the judgment of the Company or its counsel, be unlawful. The Company
also reserves the absolute right to waive any defects or irregularities in the
tender or conditions of the Exchange Offer as to any Private Placement Notes
either before or after the Expiration Date (including the right to waive the
ineligibility of any holder who seeks to tender Private Placement Notes in the
Exchange Offer). The interpretation of the terms and conditions of the Exchange
Offer (including the Letter of Transmittal and the instructions thereto) by the
Company shall be final and binding on all parties. Unless waived, any defects or
irregularities in connection with tenders of Private Placement Notes for
exchange must be cured within such time as the Company shall determine. No
alternative, conditional or contingent tenders will be accepted. Neither the
Company, the Exchange Agent, nor any other person shall be under any duty to
give notification of defects or irregularities with respect to tenders of
Private Placement Notes for exchange, nor shall any of them incur any liability
for failure to give such notification. Tenders of the Private Placement Notes
will not be deemed to have been made until such irregularities have been cured
or waived.

If any Letter of Transmittal, endorsement, bond power, or other document
required by the Letter of Transmittal 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 Company of such
person's authority to so act must be submitted.

Any beneficial owner whose Private Placement Notes are registered in the
name of a broker, dealer, commercial bank, trust company, or other nominee who
wishes to tender the Private Placement Notes in the Exchange Offer should
contact such registered holder promptly and instruct such registered holder to
tender the Private Placement Notes on such beneficial owner's behalf. If such
beneficial owner wishes to tender directly, such beneficial owner must, prior to
completing and executing the Letter of Transmittal and delivering the Private
Placement Notes, either (i) make appropriate arrangements to register ownership
of the Private Placement Notes in such holder's name or (ii) obtain an
endorsement of, or instrument of transfer or

18
<PAGE> 24

exchange for, the Private Placement Notes from the registered holder as holder
as above specified. Beneficial owners should be aware that the transfer of
registered ownership may take considerable time.

Each holder that tenders the Private Placement Notes in the Exchange Offer
will be required to represent to the Company that the Exchange Notes to be
acquired by such holder pursuant to the Exchange Offer are being acquired in the
ordinary course of such holder's business and such holder has no intent or
arrangement with any person to participate in the distribution of the Exchange
Notes.

GUARANTEED DELIVERY PROCEDURES

If a holder desires to tender Private Placement Notes and the holder's
certificates are not immediately available or time will not permit such
certificates or other required documents to reach the Exchange Agent on or prior
to the Expiration Date, a tender may be affected if:

(a) the tender is made by or through an Eligible Institution; and

(b) on or prior to the Expiration Date, the Exchange Agent receives
from such Eligible Institution a properly completed and duly executed
Notice of Guaranteed Delivery (by telegram, facsimile transmission, mail or
hand delivery), substantially in the form provided by the Company, which
contains a signature guaranteed by an Eligible Institution in the form set
forth in such Notice of Guaranteed Delivery (unless such tender is for the
account of an Eligible Institution) which sets forth the name and address
of the holder of the Private Placement Notes and the amount of Private
Placement Notes tendered, states that the tender is being made thereby and
guarantees that within five New York Stock Exchange ("NYSE") trading days
after the Expiration Date, the Letter of Transmittal (or facsimile
thereof), properly completed and duly executed, together with the Private
Placement Notes and any required signature guarantees and any other
documents required by the Letter of Transmittal, will be deposited by the
Eligible Institution with the Exchange Agent; and

(c) all tendered Private Placement Notes as well as the Letter of
Transmittal (or facsimile thereof), properly completed and duly executed,
with any required signature guarantees and any other documents required by
the Letter of Transmittal, are received by the Exchange Agent within five
NYSE trading days after the Expiration Date.

A Notice of Guaranteed Delivery may be delivered by hand or transmitted by
telegram, facsimile transmission or mail to the Exchange Agent and must include
a signature guarantee by an Eligible Institution in the form set forth in such
Notice of Guaranteed Delivery.

Notwithstanding any other provision hereof, the exchange of Private
Placement Notes accepted pursuant to the Exchange Offer will in all cases be
made only after timely receipt by the Exchange Agent of certificates for such
Private Placement Notes, the Letter of Transmittal (or a facsimile thereof),
properly completed and duly executed, with any required signature guarantees and
any other required documents.

ACCEPTANCE OF THE PRIVATE PLACEMENT NOTES FOR EXCHANGE; DELIVERY OF EXCHANGE
NOTES

Upon satisfaction or waiver of all of the conditions to the Exchange Offer,
the Company will, promptly after the Expiration Date, accept all the Private
Placement Notes properly tendered and not withdrawn and will immediately
thereafter instruct the Exchange Agent to issue the Exchange Notes. See
"-- Certain Conditions to the Exchange Offer." For purposes of the Exchange
Offer, the Company shall be deemed to have accepted Private Placement Notes that
are tendered for exchange when, as, and if the Company has given oral or written
notice thereof to the Exchange Agent.

The form and terms of the Exchange Notes will be identical to the form and
terms of the Private Placement Notes, except that the Exchange Notes have been
registered under the Securities Act. The Exchange Notes will bear interest from
and including their issuance date at the same rate and upon the same terms as
the Private Placement Notes. Holders of the Private Placement Notes whose
Private Placement Notes are accepted for exchange will receive accrued but
unpaid interest thereon to, but not including, the issuance date of the Exchange
Notes, such interest to be payable with the first interest payment on the

19
<PAGE> 25

Exchange Notes, and will be deemed to have waived the right to receive any
payment in respect of interest on the Private Placement Notes accrued from and
after the date of issuance of the Exchange Notes. Accrued but unpaid interest on
the Private Placement Notes will be payable with the first interest payment on
the Exchange Notes. See "THE NOTES."

In all cases, issuance of Exchange Notes for Private Placement Notes that
are accepted for exchange pursuant to the Exchange Offer will be made only after
timely receipt by the Exchange Agent of the Private Placement Notes, a properly
completed and duly executed Letter of Transmittal, and all other required
documents; provided, however, that the Company reserves the absolute right to
waive any defects or irregularities in the tender or conditions of the Exchange
Offer. If any tendered Private Placement Notes are not accepted for any reason
set forth in the terms and conditions of the Exchange Offer or if the Private
Placement Notes are submitted for a greater principal amount than the holder
desires to exchange, such unaccepted Private Placement Notes or substitute
Private Placement Notes evidencing the unaccepted portion, as appropriate, will
be returned without expense to the tendering holder as promptly as practicable
after the rejection of tender or the Expiration Date.

WITHDRAWAL RIGHTS

Tenders of Private Placement Notes may be withdrawn at any time prior to
the Expiration Date. For a withdrawal to be effective, a written, telegraphic or
facsimile transmitted notice of withdrawal must be received by the Exchange
Agent at the address or number set forth in the Letter of Transmittal. Any such
notice of withdrawal must (i) specify the name of the person having deposited
the Private Placement Notes to be withdrawn, (ii) identify the Private Placement
Notes to be withdrawn (including the certificate number or numbers and principal
amount of the Private Placement Notes), and (iii) be signed in the same manner
required for the Letter of Transmittal by which such Private Placement Notes
were tendered (including any required signature guarantees, endorsements, and/or
powers). All questions as to the validity, form, and eligibility (including time
of receipt) of such notices will be determined by the Company, whose
determination shall be final and binding on all parties. The Private Placement
Notes so withdrawn, if any, will be deemed not to have been validly tendered for
exchange for purposes of the Exchange Offer. Any Private Placement Notes which
have been tendered for exchange but which are withdrawn will be returned to the
holder without cost to such holder as soon as practicable after withdrawal.
Properly withdrawn Private Placement Notes may be retendered by following any of
the procedures described under "-- Procedures for Tendering Private Placement
Notes" above at any time on or prior to the Expiration Date.

CERTAIN CONDITIONS TO THE EXCHANGE OFFER

Notwithstanding any other provision of the Exchange Offer, the Company
shall not be required to accept for exchange, or to issue the Exchange Notes in
exchange for, any Private Placement Notes and may terminate or amend the
Exchange Offer if at any time before the acceptance of the Private Placement
Notes for exchange or the exchange of the Exchange Notes for the Private
Placement Notes, any of the following events shall occur which occurrence, in
the sole judgment of the Company and regardless of the circumstances (including
any action by the Company) giving rise to any such events, makes it inadvisable
to proceed with the Exchange Offer:

(a) there shall be threatened, instituted, or pending any action or
proceeding before, or any injunction, order, or decree shall have been
issued by, any court or governmental agency or other governmental
regulatory or administrative agency or commission (i) seeking to restrain
or prohibit the making or consummation of the Exchange Offer or any other
transaction contemplated by the Exchange Offer, or assessing or seeking any
damages as a result thereof, or (ii) resulting in a material delay in the
ability of the Company to accept for exchange or exchange some or all of
the Private Placement Notes pursuant to the Exchange Offer; or any statute,
rule, regulation, order, or injunction shall be sought, proposed,
introduced, enacted, promulgated, or deemed applicable to the Exchange
Offer or any of the transactions contemplated by the Exchange Offer by any
domestic or foreign government or governmen-

20
<PAGE> 26

tal authority that might directly or indirectly result in any of the
consequences referred to in clauses (i) or (ii) above or, in the sole
judgment of the Company, might result in the holders having obligations
with respect to resales and transfers of Exchange Notes that are greater
than those described in the interpretation of the Commission referred to on
the cover page of this Prospectus or would otherwise make it inadvisable to
proceed with the Exchange Offer;

(b) there shall have occurred (i) any general suspension of or general
limitation on prices for, or trading in, securities on any national
securities exchange or the over-the-counter market, (ii) any limitation by
any governmental agency or authority which adversely affects the ability of
the Company to complete the transactions contemplated by the Exchange
Offer, (iii) a declaration of a banking moratorium or any suspension of
payments in respect of banks in the United States or any limitation by any
governmental agency or authority which adversely affects the extension of
credit, or (iv) a commencement of a war, armed hostilities, or other
similar international calamity directly or indirectly involving the United
States, or, in the case of any of the foregoing, existing at the time of
the commencement of the Exchange Offer, a material acceleration or
worsening thereof; or

(c) any change (or any development involving a prospective change)
shall have occurred or be threatened in the business, properties, assets,
liabilities, financial condition, operations, results of operations, or
prospects of the Company that is or may be adverse to the Company.

The foregoing conditions are for the sole benefit of the Company and may be
asserted by the Company regardless of the circumstances giving rise to any such
condition or may be waived by the Company in whole or in part at any time and
from time to time in its sole discretion. The failure by the Company at any time
to exercise any of the foregoing rights shall not be deemed a waiver of any such
right and each such right shall be deemed an ongoing right which may be asserted
at any time and from time to time. Any determination by the Company concerning
the events described above will be final and binding upon all parties.

In addition, the Company will not accept for exchange any Private Placement
Notes tendered, and no Exchange Notes will be issued in exchange for any such
Private Placement Notes, if at such time any stop order shall be threatened or
in effect with respect to the Registration Statement or the qualification of the
Indenture under the Trust Indenture Act of 1939, as amended (the "Trust
Indenture Act").

ASSISTANCE

All executed Letters of Transmittal and Private Placement Notes that are
being tendered should be directed to the Exchange Agent. Questions and requests
for assistance or additional copies of the Prospectus, the Letter of
Transmittal, and other related documents may be directed to the Exchange Agent
at the address or telephone number set forth in the Letter of Transmittal.

LETTERS OF TRANSMITTAL AND PRIVATE PLACEMENT NOTES SHOULD NOT BE SENT TO
THE COMPANY.

THE EXCHANGE AGENT

Reliance Trust Company will act as Exchange Agent for the Exchange Offer.
The Company will pay the Exchange Agent a fee of approximately $1,500 for
services in connection with the Exchange Offer and will reimburse the Exchange
Agent for out-of-pocket expenses, including legal fees. In addition, the Company
will indemnify the Exchange Agent against certain liabilities and expenses in
connection with their services, including liabilities under the federal
securities laws. The Company will also reimburse any custodians, nominees or
fiduciaries the reasonable out-of-pocket expenses incurred by them in handling
or forwarding tenders for their customers; however, any such expenses are
anticipated to be nominal as no Private Placement Notes appear to be held of
record by such entities.

TRANSFER TAXES

Tendering holders of Private Placement Notes will not be obligated to pay
brokerage commissions, fees or, subject to the instructions in the Letter of
Transmittal with respect to special issuance instructions, transfer

21
<PAGE> 27

taxes with respect to the exchange of such notes pursuant to the Exchange Offer.
The Company will pay all charges and expenses, other than any applicable income
taxes, in connection with the Exchange Offer.

ACCOUNTING TREATMENT

The Exchange Notes will be recorded at the same carrying value as the
Private Placement Notes for which they are exchanged, as reflected in the
Company's accounting records on the date of the exchange. Accordingly, no gain
or loss for accounting purposes will be recognized because of the Exchange
Offer.

RESALES OF THE EXCHANGE NOTES

The Company is relying upon a series of no-action letters issued by the
Division of Corporate Finance of the Commission, including Letter from Exxon
Capital Holding Corp. (available May 13, 1988), Letter from Shearman and
Sterling (available July 2, 1993) and Letter from Morgan Stanley & Co.
(available June 5, 1991), concerning the prospectus delivery and registration
requirements of subsequent resales of privately placed securities. The Company
has not requested a no-action letter relating to the Exchange Offer because the
cited no-action letters were granted in situations similar to the Exchange
Offer.

Such series of no-action letters issued with respect to other transactions
indicates the view of the Division of Corporate Finance of the Commission that a
holder who exchanges Private Placement Notes for Exchange Notes in the ordinary
course of business and who is not an affiliate of the Company will be allowed to
resell the Exchange Notes to the public without further registration under the
Securities Act and without delivering to the purchasers of the Exchange Notes a
prospectus that satisfies the requirements of Section 10 thereof. Such a holder
must represent to the Company that (1) the Exchange Notes are being acquired in
the ordinary course of the holder's business; (2) the holder has no arrangement
or understanding with any person to participate in the distribution of the
Exchange Notes; (3) neither the holder, nor any such other person is an
affiliate of the Company, and (4) if the holder is not a broker-dealer, the
holder is not engaged in and does not intend to engage in a distribution of
Exchange Notes. However, if any holder is an "affiliate" of the Company within
the meaning of Section 405 of the Securities Act or acquires Exchange Notes in
the Exchange Offer for the purpose of distributing the Exchange Notes, such
holder could not rely on the no-action letters referred to above and must comply
with the registration and prospectus delivery requirements of the Securities Act
in connection with a secondary resale transaction, unless an exemption from
registration is otherwise available. The Company believes that none of the
current registered holders of the Private Placement Notes are affiliates of the
Company.

OTHER

For a description of the Exchange Notes, see "THE NOTES."

For a description of the Exchange and Registration Rights Agreement, see
"EXCHANGE AND REGISTRATION RIGHTS AGREEMENT."

TAX CONSEQUENCES

For a description of certain federal income tax consequences to holders of
Private Placement Notes of tendering in the Exchange Offer, see "CERTAIN FEDERAL
INCOME TAX CONSIDERATIONS -- Consequences of Exchange of Notes to the Holders."

22
<PAGE> 28

PRO FORMA FINANCIAL INFORMATION
(UNAUDITED)

AMC was incorporated on September 29, 1995 and organized effective October
2, 1995 in conjunction with the exchange of certain assets, debt and equity and
the debt restructuring of Mr. Portman and the Portman Companies with their
creditors. The businesses of Mr. Portman and the Portman Companies, which were
contributed to AMC, are referred to collectively as the "Atlanta Market Center
Companies." As part of the Formation, such businesses, along with certain other
assets, were contributed in exchange for 10,880,302 shares of common stock of
AMC. Certain creditors accepted Private Placement Notes plus 51,292,851 shares
of common stock of AMC in exchange for outstanding indebtedness of certain
businesses of Mr. Portman and the Portman Companies. These transactions have
been accounted for as troubled debt restructurings under generally accepted
accounting principles. The following unaudited pro forma condensed combined
statements of operations for the period from January 1, 1995 through October 1,
1995 and the year ended December 31, 1994 reflect the pro forma results of
operations of the Company for such periods assuming the Formation had taken
place on January 1, 1994. This pro forma financial information includes the
combined historical results of operations of the Atlanta Market Center Companies
adjusted for the pro forma effects of the troubled debt restructuring and
formation of the Company. The pro forma effects of the investment in EC Holdings
and certain promissory notes issued by AMC Orlando and AMC Tampa, which have
also been contributed to AMC effective October 2, 1995, have not been included
due to their immaterial effect on operating results. These pro forma condensed
statements of operations should be read in conjunction with the AMC consolidated
balance sheet as of October 2, 1995 and related notes thereto, the combined
financial statements and related notes thereto of the Atlanta Market Center
Companies, and the notes to pro forma financial statements appearing elsewhere
herein.

23
<PAGE> 29

PRO FORMA CONDENSED STATEMENT OF OPERATIONS
FOR THE PERIOD FROM JANUARY 1, 1995 THROUGH OCTOBER 1, 1995
(UNAUDITED)

<TABLE>
<CAPTION>
HISTORICAL
COMBINED
ATLANTA MARKET PRO FORMA PRO FORMA
CENTER COMPANIES ADJUSTMENTS AMC
---------------- ----------- ---------
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE
DATA)
<S> <C> <C> <C>
Revenues:
Rental............................................... $ 35,707 $35,707
Trade shows.......................................... 14,661 14,661
Other................................................ 4,472 4,472
------------ ---------
54,840 54,840
------------ ---------
Operating expenses:
Building operations.................................. 8,556 8,556
Trade shows.......................................... 2,994 2,994
Marketing............................................ 5,649 5,649
General and administrative........................... 8,770 8,770
Bad debt expense..................................... 668 668
Property taxes....................................... 2,487 2,487
Depreciation and amortization........................ 9,549 9,549
------------ ---------
38,673 38,673
------------ ---------
Operating income.................................. 16,167 16,167
Other expense (income):
Interest expense..................................... 25,560 $ (17,704)(d) 6,933
(1,433)(e)
510(f)
Other, net........................................... (199) (21)(d) (220)
------------ ----------- ---------
25,361 (18,648) 6,713
------------ ----------- ---------
Income (loss) before income taxes and
extraordinary item (note a)..................... (9,194) 18,648 9,454
Income taxes........................................... -- 3,687(g) 3,687
------------ ----------- ---------
Income (loss) before extraordinary item........... $ (9,194) $ 14,961 $ 5,767
============= ========= ========
Per share income before extraordinary item -- primary
(note i)............................................. $ .09
========
Per share income before extraordinary item -- fully
diluted (note i)..................................... $ .08
========
</TABLE>

See accompanying notes to pro forma financial statements.

24
<PAGE> 30

PRO FORMA CONDENSED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1994
(UNAUDITED)

<TABLE>
<CAPTION>
HISTORICAL
COMBINED
ATLANTA MARKET PRO FORMA PRO FORMA
CENTER COMPANIES ADJUSTMENTS AMC
---------------- ----------- ---------
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE
DATA)
<S> <C> <C> <C>
Revenues:
Rental..................................... $ 44,950 $44,950
Trade shows................................ 14,619 14,619
Other...................................... 4,633 4,633
-------- -------
64,202 64,202
-------- -------
Operating expenses:
Building operations........................ 10,739 10,739
Trade shows................................ 3,602 3,602
Marketing.................................. 6,968 6,968
General and administrative................. 9,484 9,484
Bad debt expense........................... 1,183 1,183
Property taxes............................. 5,702 5,702
Depreciation and amortization.............. 13,527 13,527
-------- -------
51,205 51,205
-------- -------
Operating income................... 12,997 12,997
-------- -------
Other expense:
Interest expense........................... 25,946 $ (17,723)(d) 7,460
(1,467)(e)
704(f)
Other, net................................. 373 (114)(d) 259
-------- ---------- -------
26,319 (18,600) 7,719
-------- ---------- -------
Income (loss) before income
taxes............................ (13,322) 18,600 5,278
Income taxes................................. -- 2,058(g) 2,058
-------- ---------- -------
Income (loss)...................... $(13,322) $ 16,542 $ 3,220
======== ========= =======
Per share income -- primary (note i)......... $ .05
=======
Per share income -- fully diluted (note i)... $ .05
=======
</TABLE>

See accompanying notes to pro forma financial statements.

25
<PAGE> 31

NOTES TO PRO FORMA FINANCIAL STATEMENTS

The following notes describe the pro forma adjustments necessary to reflect
the effects of the debt restructuring and issuance of shares by AMC in exchange
for the assets and businesses of the Atlanta Market Center Companies as
described in notes (a), (b), and (c).

(a) In connection with the Formation, the indebtedness of the Apparel Mart
and the Merchandise Mart has been reduced, resulting in an extraordinary gain of
$67,995,635. Such gain has been recorded as of October 1, 1995, the effective
last day of business for these formerly separate entities, in the historical
combined financial statements of the Atlanta Market Center Companies. Such gain
is not reflected in the accompanying pro forma financial statements.

(b) On October 2, 1995, AMC issued $160,000,000 in principal amount of
Private Placement Notes maturing on July 31, 2000 and bearing interest at 7.5%
per annum until July 31, 1997 and 9.0% per annum thereafter through maturity, in
exchange for remaining debt outstanding of the Apparel Mart and the Merchandise
Mart after the reduction noted in (a) above. For accounting purposes, the
Private Placement Notes have been recorded at an amount equal to the total
future cash payments, including interest, specified by the terms of the Private
Placement Notes since the outstanding debt including accrued interest prior to
the troubled debt restructuring exceeded the total future cash payments required
by the terms of the Private Placement Notes. Accordingly, the effective interest
rate on the Private Placement Notes is zero since all future cash payments will
be accounted for as a reduction of the carrying amount of the Private Placement
Notes, and no interest expense will be recognized on the Private Placement Notes
for any period between the restructuring and maturity of the Private Placement
Notes.

(c) On October 2, 1995, AMC issued 62,173,153 shares of common stock in
exchange for the assets (including the secured rights of certain lenders to such
assets in excess of amounts exchanged for the Private Placement Notes described
in (b) above) and businesses of the Apparel Mart, the Merchandise Mart, the Gift
Mart, AMCMC, and certain other Mart and non-mart related assets. In addition,
AMC has issued warrants to purchase 29,171,178 additional shares of its common
stock at an exercise price of $1 per share to certain shareholders and Mr.
Portman. Such warrants will be exercisable (i) only during such time as the then
current equity value of the Company, as determined by an independent valuation,
equals or exceeds 150% of its value at the time of the Formation and (ii) only
during the five-year period commencing on October 2, 1997. At the time of the
Formation, the fair value of the Company approximated $62 million or $1 per
share, as determined based upon negotiation with the lenders who had an
independent valuation performed on their behalf, which considered present
values, discounted cash flows, and real estate appraisals in determining the
going concern value.

Because the exercisability of the warrants is contingent upon the equity
value of the Company exceeding 150% of its value at the time of the Formation
and at the present time it cannot be assumed that such condition is likely to
occur, the issuance of the warrants has not been recorded in the Company's
financial statements. In the event that such condition is met in the future or
the Company determines it is likely to occur, the Company will record the cost
of the warrants at such time. Such cost will be the difference between the per
share equity value of the Company at the date this condition is met and the
exercise price of $1 per share multiplied by the number of warrants then
outstanding. Such cost will be amortized as additional interest cost over the
remaining term of the Notes or expensed at the time of determination if the
Notes have matured.

(d) Reflects the elimination of all interest expense and related
amortization of debt issuance costs on the Apparel Mart and Merchandise Mart
debt in accordance with the accounting described in (b) above. The resulting pro
forma interest expense represents the historical interest expense on the Gift
Mart indebtedness adjusted for the effect of the modification as described in
(f) below. During the period from January 1, 1995 through October 1, 1995, the
Gift Mart indebtedness averaged approximately $108,715,000 and accrued interest
at an average rate of approximately 7.86%. During the year ended December 31,
1994, the Gift Mart indebtedness averaged approximately $112,698,000 and accrued
interest at an average rate of approximately 5.99%.

26
<PAGE> 32

(e) Reflects the elimination of all interest expense recorded on affiliate
advances that were forgiven as part of the overall debt restructuring and
reorganization into AMC effective as of October 2, 1995. Such amounts
approximated $1,433,000 and $1,467,000 for the period from January 1, 1995
through October 1, 1995 and the year ended December 31, 1994, respectively. Also
refer to (d) above for a discussion of the resulting pro forma interest expense.

(f) Reflects the pro forma increase in interest expense on the Gift Mart
indebtedness giving effect to the modification of the Gift Mart indebtedness on
October 2, 1995 as if it had occurred at the beginning of the earliest period
reported. For 1994 and the period from January 1, 1995 through October 1, 1995
the Gift Mart loan accrued interest at a floating rate equal to LIBOR plus
1.375%. The modified indebtedness bears interest at a floating rate equal to the
prime rate plus 1% or LIBOR plus 2% or IBOR plus 2%, at the option of the
Company. For purposes of determining the pro forma effect of the modification on
the interest expense of the Gift Mart, it has been assumed that the Company
would have selected the rate of LIBOR plus 2% for the reported periods.
Accordingly, the pro forma increase in interest expense has been calculated by
applying the increase in the assumed interest rate on this modified debt (.625%)
to the average outstanding Gift Mart loan balances of approximately $108,715,000
and $112,698,000 for the period from January 1, 1995 through October 1, 1995 and
the year ended December 31, 1994, respectively.

(g) Reflects income taxes at an effective rate of 39% on the pre-tax income
of the Company.

(h) During the year ended December 31, 1994 and the period from January 1,
1995 through October 1, 1995, the Atlanta Market Center Companies performed
certain services for affiliates and were the recipients of certain other
services performed by affiliates similar to the services called for under the
service agreements described in "CERTAIN RELATIONSHIPS AND RELATED
TRANSACTIONS -- Service Agreements." In addition, the Atlanta Market Center
Companies incurred certain costs on their own behalf in those periods relating
to certain of the functions included in the service agreements. Since the
amounts relating to these services or related functions that are included in the
historical financial statements of the Atlanta Market Center Companies is not
significantly different from the amounts called for by the service agreements,
no pro forma adjustments have been made relating to the service agreements.

(i) Weighted average shares outstanding for each of the periods is assumed
to be 62,173,153. Primary per share amounts have been calculated assuming no
common stock equivalents resulting from outstanding warrants because the
exercise of such warrants is contingent upon the condition that the equity value
of the Company equals or exceeds 150% of its equity value at the time of the
Formation, which condition has not been met. Even though the exercise price for
the warrants is equal to the assumed market price for a share of AMC common
stock, as a result of total warrants exceeding 20% of current outstanding
shares, fully diluted per share amounts have been calculated assuming 16,736,548
additional shares issuable and outstanding and assuming earnings increases of
approximately $464,000 and $586,000 for the period from January 1, 1995 through
October 1, 1995 (the 1995 Period) and the year ended December 31, 1994,
respectively. Such assumed earnings increases result from assumed reductions in
interest expense on the Gift Mart indebtedness, which have been determined using
tax-effected interest rates of 3.7% and 3.5% for the 1995 Period and 1994,
respectively, applied to the proceeds that would have been received from the
additional 16,736,548 shares assumed to be issued. Such proceeds are assumed to
have been used to reduce the Gift Mart indebtedness.

27
<PAGE> 33

AMC, INC.
ATLANTA MARKET CENTER COMPANIES

SELECTED HISTORICAL FINANCIAL DATA

Set forth below is certain selected historical financial data for the
Atlanta Market Center Companies, which comprise the predecessor entities of AMC,
as of and for each of the years in the five-year period ended December 31, 1994,
as of and for the 274-day period ended October 1, 1995 and for the period from
October 1, 1994 through February 28, 1995, and for AMC as of February 29, 1996
and for the period from October 2, 1995 through February 29, 1996. AMC was
organized effective October 2, 1995 with a fiscal year-end of August 31. The
selected financial data presented below as of October 1, 1995 and for the
274-day period then ended and for, and as of the end of, each of the years in
the three-year period ended December 31, 1994, is derived from the combined
financial statements of the Atlanta Market Center Companies, which financial
statements have been audited by KPMG Peat Marwick LLP, independent certified
public accountants. The information as of February 29, 1996 and December 31,
1991 and 1990 and for the periods then ended and for the period ended February
28, 1995 is unaudited. The results of operations of AMC for the period from
October 2, 1995 through February 29, 1996 are not necessarily indicative of the
results to be expected for the fiscal year ending August 31, 1996. In the
opinion of management, the financial data for such period includes all
adjustments, including normal recurring adjustments, necessary for a fair
presentation of the data. The selected financial data set forth below should be
read in conjunction with the combined financial statements of the Atlanta Market
Center Companies and related notes thereto, the consolidated balance sheet of
AMC and subsidiaries, as of October 2, 1995 and related notes thereto, the
unaudited consolidated financial statements of AMC and subsidiaries as of
February 29, 1996 and for the period from October 2, 1995 through February 29,
1996 and the unaudited combined financial statements of the Atlanta Market
Center Companies for the period from October 1, 1994 and through February 28,
1995, and "MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS" included elsewhere in this Prospectus.

28
<PAGE> 34
<TABLE>
<CAPTION>
PERIOD FROM PERIOD FROM PERIOD FROM
OCTOBER 2, 1995 OCTOBER 1, 1994 JANUARY 1, 1995
THROUGH THROUGH FEBRUARY THROUGH
FEBRUARY 29, 1996 28, 1995 OCTOBER 1, 1995
----------------- ----------------- ---------------
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Revenues............................................................. $28,933 $28,072 $54,840
Operating expenses, exclusive of depreciation and amortization....... 15,724 15,133 29,124
Depreciation and
amortization....................................................... 5,569 6,016 9,549
------- ------- -------
Operating income................................................... 7,640 6,923 16,167
Interest expense..................................................... 3,553 13,042 25,560
Other expenses (income).............................................. (157) 11 (199)
Income tax expense................................................... 1,613 -- --
------- ------- -------
Income (loss) before extraordinary item............................ $ 2,631 $(6,130) $(9,194)
================== ================= ===============
Income (loss) before extraordinary item per share -- primary......... $ .04 $ (a) $ (a)
================== ================= ===============
Income (loss) before extraordinary item per share -- fully diluted... $ .04 $ (a) $ (a)
================== ================= ===============
<CAPTION>
YEAR ENDED DECEMBER 31,
-------------------------------------------------------
1994 1993 1992 1991 1990
-------- -------- -------- ------- --------
<S> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Revenues............................................................. $ 64,201 $ 63,177 $ 61,930 $54,040 $ 54,055
Operating expenses, exclusive of depreciation and amortization....... 37,677 35,205 34,777 28,379 29,076
Depreciation and
amortization....................................................... 13,527 14,472 12,811 8,023 8,063
-------- -------- -------- ------- --------
Operating income................................................... 12,997 13,500 14,342 17,638 16,916
Interest expense..................................................... 25,946 24,018 28,840 23,903 32,935
Other expenses (income).............................................. 373 (310) (415) 2,381 727
Income tax expense................................................... -- -- -- -- --
-------- -------- -------- ------- --------
Income (loss) before extraordinary item............................ $(13,322) $(10,208) $(14,083) $(8,646) $(16,746)
========== ========== ========== ======== ==========
Income (loss) before extraordinary item per share -- primary......... $ (a) $ (a) $ (a) $ (a) $ (a)
========== ========== ========== ======== ==========
Income (loss) before extraordinary item per share -- fully diluted... $ (a) $ (a) $ (a) $ (a) $ (a)
========== ========== ========== ======== ==========
</TABLE>

<TABLE>
<CAPTION>
DECEMBER 31,
FEBRUARY 29, OCTOBER 1, ---------------------------------------------------------
1996 1995 1994 1993 1992 1991 1990
------------ ---------- --------- --------- --------- --------- ---------
(AMOUNTS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:
Total assets................ $ 238,159 $ 215,348 $ 213,675 $ 219,903 $ 236,739 $ 241,925 $ 204,313
Corporate notes/mortgage
loans payable............. 335,342 354,505 407,532 410,541 414,094 399,440 347,906
Long-term advances from
affiliate................. -- -- 12,048 12,048 12,048 12,048 12,048
Deficit..................... $ (107,857) $ (152,165) $(231,015) $(220,210) $(207,966) $(191,024) $(177,795)
=========== ========== ========== ========== ========== ========== ==========
</TABLE>
<TABLE>
<CAPTION>
PERIOD FROM PERIOD FROM PERIOD FROM
OCTOBER 2, 1995 OCTOBER 1, 1994 JANUARY 1, 1995
THROUGH THROUGH FEBRUARY THROUGH
FEBRUARY 29, 1996 28, 1995 OCTOBER 1, 1995
----------------- ----------------- ---------------
(AMOUNTS IN THOUSANDS, EXCEPT RATIOS)
<S> <C> <C> <C>
OTHER:
Distributions to stockholders/ partners.............................. $ -- $ 990 $ 103
================= ================= ===============
Ratio of earnings to fixed
charges(b)......................................................... 1.04 .53 .64
================= ================= ===============
Earnings to fixed charges coverage deficiency........................ $ (a) $(6,130) $ (9,194)
================= ================= ===============
<CAPTION>
YEAR ENDED DECEMBER 31,
-------------------------------------------------------
1994 1993 1992 1991 1990
-------- -------- -------- ------- --------
<S> <C> <C> <C> <C> <C>
OTHER:
Distributions to stockholders/ partners.............................. $ 1,077 $ 1,694 $ 2,526 $ 1,087 $ --
========== ========== ========== ======== ==========
Ratio of earnings to fixed
charges(b)......................................................... .49 .58 .52 .64 .50
========== ========== ========== ======== ==========
Earnings to fixed charges coverage deficiency........................ $(13,322) $(10,208) $(14,083) $(8,646) $(16,746)
========== ========== ========== ======== ==========
</TABLE>
- ---------------
(a) Not applicable.
(b) For purposes of computing the ratio of earnings to fixed charges, earnings
represent operating income plus other income and minus other expenses as
indicated above plus land rental expense. Fixed charges consist of interest
expense, inclusive of amortization of debt expense and related interest
costs on the Notes that will be recorded as a reduction of the carrying
value of the Notes when paid, and land rental expense. For all periods shown
except for the period from October 2, 1995 through February 29, 1996,
earnings were inadequate to cover fixed charges. On a pro forma basis
(unaudited), assuming the debt restructuring had occurred prior to January
1, 1994, the ratio of earnings to fixed charges for the period from January
1, 1995 through October 1, 1995 and for the year ended December 31, 1994 is
1.03 and 0.65, respectively.

29
<PAGE> 35

MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

OVERVIEW

The following discussion is based on the combined financial statements of
the Atlanta Market Center Companies as of October 1, 1995, December 31, 1994 and
December 31, 1993, for the period from January 1, 1995 through October 1, 1995
(the date immediately preceding the Formation; such period being referred to as
the "1995 Period"), for each of the years in the three-year period ended
December 31, 1994, for the period from October 1, 1994 through February 28, 1995
and the three-month period ended February 28, 1995, and on the consolidated
financial statements of AMC as of February 29, 1996 and for the period from
October 2, 1995 through February 29, 1996, and the three-month period ended
February 29, 1996. The fiscal year of the Atlanta Market Center Companies ended
on December 31. The fiscal year of AMC ends on August 31. The following
discussion may be of limited significance due to the different periods compared
therein and the significant restructuring that occurred on October 2, 1995. The
following discussion should be read in conjunction with the "Selected Historical
Financial Data," and the financial statements and notes thereto appearing
elsewhere in this document. References herein to the Company mean AMC after the
Formation and the Atlanta Market Center Companies prior thereto.

The Atlanta Market Center Companies represent a combination of businesses
which principally owned and managed trade marts, trade shows, special events and
activities reasonably related thereto and were controlled by Mr. Portman, who
was a general partner or sole stockholder of the entities included in the
Atlanta Market Center Companies. In 1991, Mr. Portman and certain affiliates
restructured substantially all of their then existing indebtedness under the
OCPA.

Effective October 2, 1995, Mr. Portman and certain affiliates entered into
a series of agreements with their lenders to terminate the OCPA and restructure
the existing indebtedness. Under the terms of these agreements, the net assets
of the Atlanta Market Center Companies were contributed to AMC, which had been
formed principally for such purpose. In exchange for the existing debt reduced
by certain amounts forgiven by the lenders, the creditors of Mr. Portman and
certain affiliates, including the creditors of the Company, received 82.5% of
the equity interest in the Company, the Private Placement Notes, the AMM Escrow
Bonds and the Antecedent Debt Bonds. This restructuring has been accounted for
as a troubled debt restructuring in accordance with Statement of Financial
Accounting Standards No. 15, "Accounting by Debtors and Creditors for Troubled
Debt Restructurings" ("SFAS 15"). As a result of this troubled debt
restructuring in which the existing debt exceeded the fair value of the equity
interests issued and the total future principal and interest payments called for
under the Notes, the Notes have initially been recorded at an amount equal to
the total future cash payments, including interest, specified by their terms in
accordance with SFAS 15. All future cash payments will be accounted for as a
reduction of the carrying amount of the Notes, and no interest expense will be
recognized on the Notes.

RESULTS OF OPERATIONS

General

The Company's principal sources of revenues are rental revenues from the
lease of showroom and exhibition space in the Marts and trade show revenues,
which relate to specific shows staged for related industries. The Company leases
showroom space over terms ranging from one to five years (on average three
years) with rent payable monthly over the term of the lease. In addition, the
Company rents exhibition space for short terms thereby affording Manufacturers
an opportunity to exhibit merchandise during a specific trade show.

The number of trade shows or markets in a particular industry is keyed to
the major sales seasons for such industry. A majority of the Company's trade
shows occur from January through September of each calendar year. Accordingly,
the Company experiences periodic fluctuations in its trade show revenues, with
the lowest revenues occurring in the period from October through December of
each calendar year. Other revenues of

30
<PAGE> 36

the Company, such as parking and advertising sales, fluctuate periodically with
trade show revenues as these revenues are significantly impacted by the timing
and number of trade shows.

Certain indirect operating expenses, such as marketing and administrative
expenses, are incurred in advance of the ultimate receipt of revenues related to
such marketing efforts, particularly in the case of trade shows. Accordingly,
the relationship of operating income to revenues will vary from period to period
based on the timing of trade shows and the Company's general marketing efforts.

The Company provides for losses on tenant receivables that are more than 60
days delinquent. Such policy has resulted in bad debt expense that has been
determined to be generally reflective of experienced losses. The Company does
continue to pursue collection of such receivables once reserved and does not
write them off until collection efforts indicate write-off is appropriate. Since
rents are due no later than the beginning of each month and accrued accordingly,
all rental receivables at a period-end are past due. This ultimately results in
larger aggregate allowances as a percentage of total receivables. There are no
individually significant tenant receivables for which there is an allowance at
any of the reporting period-ends, nor are there any trends, events, or
conditions resulting in the allowance which management expects will materially
impact future operating results, liquidity, or capital resources.

In addition, because of the troubled debt restructuring accounted for under
SFAS 15, the Company's operations for all periods after the Formation will
reflect lower interest expense because interest on the Notes is charged against
the carrying value of the Notes and no interest expense is recognized.

Quarter Ended February 29, 1996 Compared to Quarter Ended February 28, 1995

Rental revenues increased approximately $390,000 during the quarter ended
February 29, 1996 as compared to the quarter ended February 28, 1995. Rental
revenues increased approximately $433,000 in the Gift Mart. Approximately
$427,000 of this increase was due to an increase in rental rates and $6,000 was
due to an increase in occupancy. Rental revenues in the Merchandise Mart
decreased approximately $25,000, reflecting a decrease in occupancy of
approximately $433,000, partially offset by an increase in rental rates of
approximately $408,000. Rental revenues in the Apparel Mart decreased
approximately $18,000, reflecting an approximately $136,000 decrease in rental
rates, partially offset by an increase in occupancy of approximately $118,000.

The percentage of total rentable square feet of each of the Marts which are
subject to leases which expire during calendar year 1996 are as follows:
Merchandise Mart: 23%; Apparel Mart: 23%; and Gift Mart: 32%. These percentages
are typical for the Marts because lease terms range from one to five years and
no single lease is significant to the rental revenues derived from any building.
Management typically attempts to renew expiring leases approximately 60 days
prior to expiration.

Trade show revenues increased approximately $403,000, or approximately
6.4%, for the quarter ended February 29, 1996, compared to the quarter ended
February 28, 1995. This increase was due to an increase in revenues associated
with the January 1996 gift show as compared to the January 1995 gift show.

Other revenues increased approximately $133,000, or approximately 10.2%,
for the quarter ended February 29, 1996, compared to the quarter ended February
28, 1995. This increase in revenues reflects an increase in the number of
advertising sales and the rates charged for such advertising in the trade show
directory produced for the January 1996 gift show as compared to the directory
produced for the January 1995 gift show.

Building operations expenses increased approximately $149,000 for the
quarter ended February 29, 1996 as compared to the quarter ended February 28,
1995 due to increases in utilities and repairs and maintenance expenses.

Trade show expenses increased approximately $553,000 for the quarter ended
February 29, 1996 as compared to the quarter ended February 28, 1995. This
increase was due to an increase in expenses relating to the January 1996 gift
show as compared to the January 1995 gift show. The most significant increase in

31
<PAGE> 37

expense resulted from an upgrade in the buyer registration system, which was
implemented to better accommodate an increased number of buyers.

Marketing expenses decreased approximately $683,000 for the quarter ended
February 29, 1996 as compared to the quarter ended February 28, 1995. This
decrease was the result of a decrease in media advertising during the quarter
ended February 29, 1996 as compared to the quarter ended February 28, 1995.

General and administrative expenses increased approximately $124,000 for
the quarter ended February 29, 1996 as compared to the quarter ended February
28, 1995. This increase in administrative expenses was primarily due to normal
increases in salary expense.

Bad debt expense increased approximately $491,000 for the quarter ended
February 29, 1996 as compared to the quarter ended February 28, 1995 due to
certain recoveries of receivables in the 1995 quarter, which previously had been
written off.

Property taxes increased approximately $121,000 for the quarter ended
February 29, 1996 compared to the quarter ended February 28, 1995 due to an
anticipated increase in property tax expense for 1996.

Depreciation expense decreased from approximately $3,521,000 during the
quarter ended February 28, 1995 to approximately $3,323,000 during the quarter
ended February 29, 1996 due to certain tenant and capital improvements becoming
fully depreciated during calendar year 1995.

The resulting operating income was approximately $6,170,000 for the quarter
ended February 29, 1996 as compared to $5,801,000 for the quarter ended February
28, 1995. This increase in operating income of approximately 6.4% was due to the
increase in revenues.

Interest expense decreased approximately $5,954,000 during the quarter
ended February 29, 1996 as compared to the quarter ended February 28, 1995. This
decrease in interest expense was due to the fact that, subsequent to the
Formation, interest on the Company's Notes is charged against the carrying value
of the Notes and no interest expense is recognized on the Notes.

Income tax expense was approximately $1,586,000 for the quarter ended
February 29, 1996. No income tax expense was recognized during the quarter ended
February 28, 1995 due to the fact that, prior to the Formation, the predecessor
companies were partnerships or S corporations, and any liability for income
taxes was that of the partners and stockholders and not that of the Company.

Net income was approximately $2,588,000 for the quarter ended February 29,
1996 as compared to a net loss of approximately $2,223,000 for the quarter ended
February 28, 1995. This increase in net income is due to the fact that interest
expense relating to the Notes is charged against the carrying value of the Notes
and no interest expense is recognized on such Notes, which increase was
partially offset by increased income tax expense.

Period from October 2, 1995 through February 29, 1996 Compared to Period from
October 1, 1994 through February 28, 1995

Rental revenues increased approximately $633,000 during the period from
October 2, 1995 through February 29, 1996 as compared to the period form October
1, 1994 through February 28, 1995. Rental revenues increased approximately
$787,000 in the Gift Mart. Approximately $777,000 of this increase was due to an
increase in rental rates and approximately $10,000 was due to an increase in
occupancy. Rental revenues in the Merchandise Mart decreased approximately
$91,000, reflecting an approximately $690,000 decrease in occupancy, partially
offset by an increase in rental rates of approximately $599,000. Rental revenues
in the Apparel Mart decreased approximately $63,000, reflecting an approximately
$239,000 decrease in rental rates, partially offset by an increase in occupancy
of approximately $176,000.

Trade show revenues increased approximately $351,000, or approximately
5.0%, for the period from October 2, 1995 through February 29, 1996, compared to
the period from October 1, 1994 through February 28, 1995 due to an increase in
revenues associated with the January 1996 gift show as compared to the January
1995 gift show.

32
<PAGE> 38

Other revenues decreased approximately $123,000, or approximately 6.4%, for
the period from October 2, 1995 through February 29, 1996, compared to the
period from October 1, 1994 through February 28, 1995. This decrease in revenues
was due to the receipt of insurance proceeds received during the 1995 period
that were not received in 1996. The decrease in the 1996 period was partially
offset by increases in publishing revenues.

Building operations expenses increased approximately $33,000 for the period
from October 2, 1995 through February 29, 1996, compared to the period from
October 1, 1994 through February 28, 1995 due to increases in utilities and
repairs and maintenance expenses.

Trade show expenses increased approximately $547,000 for the period from
October 2, 1995 through February 29, 1996, compared to the period from October
1, 1994 through February 28, 1995. This increase was due to an increase in
expenses relating to the January 1996 gift show to implement an upgrade in the
buyer registration system.

Marketing expenses decreased approximately $305,000 for the period from
October 2, 1995 through February 29, 1996, compared to the period from October
1, 1994 through February 28, 1995. This decrease resulted from a decrease in
media advertising during the period from October 2, 1995 through February 29,
1996 compared to the period from October 1, 1994 through February 28, 1995.

General and administrative expenses remained relatively constant for the
period from October 2, 1995 through February 29, 1996, compared to the period
from October 1, 1994 through February 28, 1995.

Bad debt expense increased approximately $520,000 for the period from
October 2, 1995 through February 29, 1996 as compared to the period from October
1, 1994 through February 28, 1995 due to certain recoveries of receivables in
the 1995 period which previously had been written off.

Property taxes remained relatively stable for the period from October 2,
1995 through February 29, 1996, compared to the period from October 1, 1994
through February 28, 1995.

Depreciation expense decreased approximately 7.4% from approximately
$6,017,000 during the period from October 1, 1994 through February 28, 1995 to
approximately $5,569,000 during the period from October 2, 1995 through February
29, 1996 due to certain tenant and capital improvements becoming fully
depreciated during calendar year 1995.

The resulting operating income was approximately $7,640,000 for the period
from October 2, 1995 through February 29, 1996 as compared to $6,923,000 for the
period from October 1, 1994 through February 28, 1995. This increase in
operating income of approximately 10.4% was due to the increase in revenues.

Interest expense decreased approximately $9,489,000 during the period from
October 2, 1995 through February 29, 1996 as compared to the period from October
1, 1994 through February 28, 1995. This decrease in interest expense was due to
the fact that subsequent to the Formation interest on the Company's Notes is
charged against the carrying value of the Notes and no interest expense is
recognized on such Notes.

Income tax expense was approximately $1,613,000 for the period from October
2, 1995 through February 29, 1996. No income tax expense was recognized during
the period from October 1, 1994 through February 28, 1995 due to the fact that
prior to the Formation, the predecessor companies were partnerships or S
corporations, and any liability for income taxes was that of the partners and
stockholders and not that of the Company.

Net income was approximately $2,631,000 for the period from October 2, 1995
through February 29, 1996 as compared to a net loss of approximately $6,131,000
for the period from October 1, 1994 through February 28, 1995. This increase in
net income is due to the fact that interest expense relating to the Notes is
charged against the carrying value of the Notes and no interest expense is
recognized on such Notes, which increase was partially offset by increased
income tax expense.

33
<PAGE> 39

1995 Period (Nine-Month Period) Compared To Year Ended December 31, 1994
(Twelve-Month Period)

Rental revenues for the 1995 Period were approximately 65.1% of total
revenues, compared to approximately 70.0% of total revenues for the year ended
December 31, 1994. This decrease in the percentage of total revenue is due to
the fact that the majority of the Company's trade shows for the year had
occurred as of September 30 and only nine months of rental revenue had been
earned as of this date. Trade show revenues were approximately $14.7 million, or
approximately 26.7% of total revenues, for the 1995 Period, as compared to
approximately $14.6 million, or approximately 22.4% of total revenues, for the
year ended December 31, 1994. This increase was due to an increase in revenue
associated with the gift shows.

Other revenues increased to approximately 8.2% of total revenues for the
1995 Period, compared to approximately 7.2% of total revenues for the year ended
December 31, 1994, primarily reflecting increases in advertising sales from
market publications, parking and fees associated with third party management
contracts.

Building operations expense was approximately 15.6% of total revenues
during the 1995 Period as compared to approximately 16.7% during 1994. This
slight decrease was due to decreased utilities cost during the 1995 Period.

Marketing expense remained relatively stable at approximately 10.3% of
total revenues during the 1995 Period as compared to approximately 10.9% during
1994.

General and administrative expenses increased from approximately 14.8% of
total revenues during 1994 to approximately 16.0% of total revenues during the
1995 Period due to normal salary increases.

Bad debt expense was approximately 1.2% of total revenues during the 1995
Period as compared to 1.8% during 1994. This decrease was due to the success of
increased collection efforts during the 1995 Period. Included in bad debt
expense in the 1995 Period was approximately $130,000 related to a receivable
from Portman Apparel Associates, L.P., an affiliate of the Company.

Property tax expense was approximately 4.5% of total revenues during the
1995 Period as compared to approximately 8.9% during 1994 due to a lower
assessed value of the Mart buildings during the 1995 Period.

Depreciation and amortization expense decreased from approximately 21.1% of
total revenues during 1994 to approximately 17.4% during the 1995 Period due to
the fact that certain tenant improvement costs became fully depreciated during
1994.

Operating income was approximately 29.5% of total revenues for the 1995
Period compared to approximately 20.2% for 1994 for the reasons described above.

Interest expense as a percentage of total revenues was approximately 46.6%
for the 1995 Period compared to approximately 40.4% for the year ended December
31, 1994, primarily reflecting increases in interest rates during the 1995
Period. The weighted average interest rate increased from 6.16% in 1994 to 8.12%
in the 1995 Period. Average debt outstanding was approximately $421.9 million
during the 1995 Period, compared to $421.7 million for the year ended December
31, 1994.

The earnings from investment in affiliates of approximately $0.09 million
in the 1995 Period represents earnings from the Company's investment in Portman
Lightfair. The loss from investment in affiliates of approximately $0.5 million
in 1994 represents a loss from a 25% interest in a joint venture formed in 1994
to develop and produce a special event, which was partially offset by earnings
received from Portman Lightfair.

The loss before extraordinary item was approximately $9.2 million for the
1995 Period, compared to approximately $13.3 million in 1994 for the reasons
described above. Immediately prior to the Formation, an extraordinary gain from
the debt restructuring of approximately $68.0 million was realized, resulting in
net earnings for the period of approximately $58.8 million, as compared to a
loss of approximately $13.3 million for 1994.

34
<PAGE> 40

Year Ended December 31, 1994 Compared To Year Ended December 31, 1993

Rental revenues remained relatively constant at approximately $44.9 million
during 1994 reflecting decreases in average rental rates per square foot in the
Merchandise and Apparel Marts and decreases in average occupancy in the
Merchandise Mart, which were offset by increases in the rental rates and average
occupancy for the Gift Mart in 1994. Occupancy in the Apparel Mart has remained
fairly stable from period to period despite a small loss in apparel tenants
which was offset by the leases of the ISP. Rental revenues increased
approximately $3,219,000 in the Gift Mart. Approximately $1,569,000 of this
increase was due to an increase in rental rates and approximately $1,650,000 was
due to an increase in occupancy. Rental revenues in the Merchandise Mart
decreased approximately $1,930,000. This decrease was due to a decrease in
occupancy of approximately $50,000, and a decrease in rental rate of
approximately $1,880,000. Rental revenues in the Apparel Mart decreased
approximately $779,000, reflecting an approximately $2,132,000 decrease in
rental rates, partially offset by an increase in occupancy of approximately
$1,353,000.

Trade show revenues increased approximately $0.2 million, or approximately
1.3%, in 1994 compared to 1993, primarily because of the continued growth of the
gift trade shows, although one less trade show was held in 1994.

Other revenues increased approximately $0.4 million, or approximately 9.3%,
in 1994 as compared to 1993. This increase was primarily due to an increase in
advertising sales, which was attributable to increased volume and rates of the
gift trade show directory that is produced for each major gift market.

Building operations expenses increased approximately $413,000 during 1994
due to the aging of the Merchandise Mart and the Apparel Mart as well as the
increased occupancy in the Gift Mart.

Trade show expenses decreased approximately $319,000 during 1994 as
compared to 1993. This decrease was the result of a decrease in expenses in the
Gift Mart, which ceased leasing temporary space in 1993, and due to the fact
that one less trade show was held in 1994.

Marketing expenses increased approximately $1,685,000 from 1993 to 1994.
This increase was due to an effort to expand the gift show and decrease the
decline experienced in the apparel shows. Increases in marketing expenses
related to the gift show include advertising, publishing and salaries. Increases
relating to the apparel shows include advertising, consulting and buyer
services.

General and administrative expenses increased approximately $460,000 in
1994 compared to 1993. This increase in administrative expenses was due to
salary and benefit increases associated with the opening of the ISP in the
Apparel Mart, an increase in accounting and data processing costs and the
payment of an extension fee relating to the Gift Mart construction loan.

Bad debt expense increased from approximately $755,000 during 1993 to
approximately $1,183,000 during 1994. This increase was due to significant
recoveries experienced during 1993. Included in bad debt expense in 1994 was
approximately $357,000 related to a receivable from Portman Apparel Associates,
L.P., an affiliate of the Company.

Property taxes decreased approximately $193,000, or approximately 3%, from
1993 to 1994 due to a revaluation of the buildings during 1994 that resulted in
lower appraised values on which property taxes are calculated.

Depreciation and amortization expense decreased from approximately
$14,471,000 in 1993 to approximately $13,527,000 in 1994, a decrease of 6.5%.
Depreciation expense in the Gift Mart increased approximately $738,000 due to
its increase in occupancy and the related increase in depreciation expense on
tenant improvements. Depreciation expense in the Apparel Mart decreased
approximately $1,252,000 due to the fact that approximately $4,520,000 of tenant
improvements related to the expansion of the Apparel Mart in 1989 became fully
depreciated in January of 1994.

The resulting operating income was approximately $13.0 million, or
approximately 20.2% of total revenues in 1994, compared to operating income of
approximately $13.5 million, or approximately 21.4% of total revenues, in 1993.
This decrease in operating income reflects the increased operating expenses
described above.

35
<PAGE> 41

Interest expense increased approximately $1.9 million, or approximately
8.0%, in 1994 as compared to the prior year due to higher interest rates during
1994. The weighted average interest rate on borrowings was approximately 6.16%
in 1994 and 5.63% in 1993.

Interest income decreased approximately $0.2 million, or approximately
25.9%, during 1994 as compared to 1993 due to the repayment of working capital
advances to affiliates.

The loss from investment in affiliates of approximately $0.5 million in
1994 represents a loss from a 25% interest in a joint venture, which was
partially offset by earnings received from Portman Lightfair.

The resulting net loss for 1994 was approximately $13.3 million, an
approximately 30.5% increase over the net loss of approximately $10.2 million in
1993.

Year Ended December 31, 1993 Compared To Year Ended December 31, 1992

Rental revenues remained relatively constant at approximately $44.5 million
in 1993 compared to 1992 as average occupancy and rental rates in the Gift Mart
increased but average occupancy and rental rates in the other Marts decreased.
Rental revenues increased approximately $2,364,000 in the Gift Mart.
Approximately $1,007,000 of this increase was due to an increase in rental rates
and approximately $1,357,000 was due to an increase in occupancy. Rental
revenues in the Merchandise Mart decreased approximately $2,369,000, reflecting
an approximately $3,101,000 decrease in occupancy, partially offset by an
increase in rental rates of approximately $732,000. Rental revenues in the
Apparel Mart decreased approximately $852,000. Approximately $302,000 of this
decrease was due to a decrease in rental rates and approximately $550,000 of
this decrease was due to a decrease in occupancy.

Trade show revenues increased approximately $1.7 million, or approximately
13.7%, for the year ended December 31, 1993 compared to the prior year due to
the growth of the gift trade shows and the staging of two trade shows that were
not held in 1992.

Other revenues increased approximately 12.5% in 1993 as compared to 1992
due to increases in advertising sales, parking revenues, and fees associated
with third party management contracts.

Building operations expenses decreased approximately $285,000 during 1993
as compared to 1992 due to the decrease in certain contracted services including
security, elevator maintenance and cleaning partially offset by an increase in
certain operating expenses relating to the Gift Mart as its occupancy increased.

Trade show expenses increased approximately $739,000 in 1993 as compared to
1992. This increase was due to costs associated with two trade shows, which were
held in 1993, but not in 1992.

Marketing expenses decreased approximately $665,000 in 1993 as compared to
1992 due to increased marketing efforts in 1992 related to the opening of the
Gift Mart.

General and administrative expenses increased approximately $1,451,000
during 1993 as compared to 1992. Salaries increased due to an increase in number
of employees and costs associated with turnover in certain managers. Salaries
and consulting fees also increased in 1993 due to the start-up efforts of the
ISP.

Bad debt expense decreased from approximately $1,746,000 during 1992 to
$755,000 during 1993. This decrease was due to significant recoveries of
previously written-off receivables during 1993.

Property taxes increased approximately $180,000, or approximately 3%, from
1992 to 1993 due to increases in the valuation of the Apparel Mart and the Gift
Mart by the taxing authorities, partially offset by a decrease in the property
tax rate in 1993.

Depreciation and amortization expense increased from approximately
$12,811,000 in 1992 to approximately $14,471,000 in 1993, an increase of 13%.
Depreciation expense for the Gift Mart increased due to its continued increase
in occupancy and the related increase in depreciation expense on tenant
improvements. Depreciation expense for the Apparel Mart increased due to
depreciation on assets placed in service in 1992 and 1993. Depreciation expense
for the Merchandise Mart increased due to depreciation associated with the
conversion of permanent showroom space into trade show exhibit halls.

36
<PAGE> 42

Operating income in 1993 decreased to approximately $13.5 million, or
approximately 21.4% of total revenues in 1993, compared to operating income of
approximately $14.3 million, or approximately 23.2% of total revenues in 1992,
reflecting the increased operating expenses described above.

Interest expense decreased approximately $4.8 million, or approximately
16.7%, in 1993 as compared to 1992 due to the decrease in interest rates. The
weighted average interest rate on borrowings was approximately 5.63% in 1993,
compared to 6.83% in 1992. Total average debt outstanding increased from
approximately $422.4 million in 1992 to approximately $426.7 million in 1993.

Interest income decreased approximately 26.9% for the year ended December
31, 1993 compared to the prior year due to the repayment of working capital
advances to affiliates. Earnings from investment in affiliates increased to $.08
million in 1993, an increase of 175.3%, representing the Company's earnings from
its investment in Portman Lightfair.

Net loss in 1993 was approximately $10.2 million, a decrease of
approximately 27.5% compared to the net loss of approximately $14.1 million in
1992.

LIQUIDITY AND CAPITAL RESOURCES

The Company's primary sources of cash are internally generated funds and
borrowings under the Revolver. The availability of cash flows generated by the
Gift Mart are limited by the terms of the Gift Mart Financing. See "FORMATION
TRANSACTIONS -- Financing -- Gift Mart Financing." Net income from operations
less capital improvements of the Gift Mart must be used to repay principal
outstanding on the Gift Mart Financing and cannot be used to fund operations or
capital improvements of other properties of the Company. Principal payments on
the Gift Mart Financing totaled $1.6 million for the period from October 2, 1995
through February 29, 1996, $3.2 million for the 1995 Period, $5.1 million for
the year ended December 31, 1994, and $3.9 million for the year ended December
31, 1993.

Borrowings under the Revolver of up to $10 million may be used solely to
fund operations and capital improvements and for acquisition and start-up costs
for new trade shows in an amount not to exceed $2.5 million. At May 24, 1996,
the Company had $10 million available under the Revolver.

Cash flows from operations were approximately $5.1 million during the
period October 2, 1995 through February 29, 1996, $12.6 million during the 1995
Period, $16.3 million during 1994, $8.7 million during 1993, and $2.3 million
during 1992. Cash flows from operations have been positive during the past
several years, despite the net losses of the Company, primarily due to the fact
that net income is negatively impacted by depreciation expense, which is a
non-cash charge to earnings and also, all interest expense incurred over the
past three years has not been paid. Under the terms of the Notes and the Gift
Mart Financing, the Company is required to use certain portions of the cash
flows to repay its indebtedness. The terms of such debt also limit the Company's
ability to incur additional debt or create additional liens. Accordingly, such
provisions may limit the Company's ability to make required capital
improvements.

Significant capital expenditures were incurred during the 1995 Period and
the three years ended December 31, 1994, and ongoing capital expenditures will
be necessary to adequately maintain the Company's properties. Total capital
expenditures were $6.2 million in the 1995 Period, $12.0 million in 1994, $4.3
million in 1993, and $10.6 million in 1992. Prior to the Formation, these
capital expenditures were funded through cash flows from operations and
borrowings from commercial banks and affiliated entities. Management expects
that capital expenditures, including tenant improvements, of approximately $7.0
million to $9.0 million will be needed to improve and maintain the buildings
during the year ending August 31, 1996, an aggregate of $3.7 million of which
had been incurred through February 29, 1996. There can be no assurance, however,
that changes in the competitive environment, governmental regulations or
unforeseen loss or damage will not cause capital expenditures to exceed
management's estimate. See "RISK FACTORS -- Forward Looking Statements."

Debt repayments totalled $3.2 million in the 1995 Period, $8.3 million in
1994 and $5.3 million in 1993. No principal debt payments were made in 1992, but
$13.1 million in proceeds were received from the Gift

37
<PAGE> 43

Mart lenders. During 1996, the Company will be required to repay approximately
$1.0 million of the principal amount of its indebtedness under the AMM Escrow
Bonds, of which the Company had paid approximately $500,000 at March 31, 1996.
Principal payments to reduce the indebtedness under the Gift Mart Financing and
the Notes will be determined based upon cash flows of the Gift Mart and of the
Company, respectively.

Management expects that cash flows from operations and borrowings under the
Revolver will be sufficient to fund planned capital expenditures during the 1996
fiscal year and interest and principal payments on the Company's indebtedness.
Over the longer term, management anticipates that internally generated funds
will be sufficient to fund required capital expenditures and scheduled debt
service prior to the maturity date for the Gift Mart Financing, provided the
Company can maintain its operating revenues and expenses at current levels.
There can be no assurance that the Company can maintain current revenue levels
which are affected by changing economic conditions in the specific industries
represented at its Marts and trade shows. In addition, there can be no assurance
that the overall level of capital expenditures will not increase as the Marts
age. In the event that internally generated funds and borrowings under the
Revolver are insufficient, the Company would be required to seek financing;
however, the Company's ability to do so is limited under the terms of the
Revolver.

The remaining principal balance on the Gift Mart Financing is due on July
31, 1998, with an option to extend the maturity date for one year, if specified
performance levels are achieved. The Company's Notes are due and payable on July
31, 2000. See "THE NOTES." The Company will not generate sufficient cash to
repay such indebtedness and intends to refinance both of these debt obligations
at maturity by extending their maturity dates or securing other financing. There
can be no assurance that the Company will be able to extend the maturity dates
of any of its indebtedness or secure alternative financing to fund the repayment
thereof.

INFLATION

The Company deals with the effects of inflation by adjusting rental rates
on new leases and renewal leases. In times of higher inflation, the Company's
operating results are negatively impacted due to the fact that most lease terms
are from one to five years while the term of most service contracts is one year
or less.

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

In March 1995, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 121, "Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to be Disposed Of" ("SFAS 121")
which is effective for fiscal years beginning after December 15, 1995. This
statement requires that long-lived assets that are to be held and used by an
entity be reviewed for impairment whenever events or changes in circumstances
indicate that the carrying amount of any such asset may not be recoverable. In
the event that facts and circumstances indicate that the carrying value of
long-lived assets may be impaired, an evaluation of their recoverability would
be performed and any resulting impairment loss recorded. The implementation of
SFAS 121 is not expected to materially impact the Company's financial position
or results of operations because the Company periodically evaluates its
commercial property and other assets for impairment using independent
appraisals, cash flow analyses, and other relevant information. The Company has
not experienced any significant impairment losses.

In October 1995, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 123, "Accounting for Stock-Based
Compensation" which is effective for fiscal years beginning after December 15,
1995. This standard defines a fair value-based method of measuring employee
stock options or similar equity instruments. In lieu of recording the value of
such options as compensation expense, companies may provide pro forma
disclosures quantifying the difference between compensation cost included in net
income as prescribed by current accounting standards and the related cost
measured by such fair value-based method. The Company currently does not have
any stock-based employee compensation plans. The Company will provide disclosure
in its financial statements after the effective date of the standard relating to
its outstanding warrants to the extent applicable.

38
<PAGE> 44

FORMATION TRANSACTIONS

BACKGROUND

Mr. Portman and the Portman Companies have been involved in designing,
developing, operating and owning office buildings, hotels, trade marts and trade
shows throughout the world for more than 40 years.

In 1991, as a result of declines in the commercial real estate markets, Mr.
Portman and the Portman Companies were unable generally to meet their debt
obligations. Accordingly, Mr. Portman, the Portman Companies and substantially
all of their creditors entered into the OCPA. The OCPA established a plan under
which the creditors agreed to forebear from enforcing certain rights with
respect to debt of Mr. Portman and the Portman Companies, and the rights to
receive cash flows and proceeds from sales or refinancings of business assets
were assigned to a collateral pool to secure such creditors.

Commencing in 1993, as a result of the inability to sell or refinance
certain assets of the Portman Companies as contemplated by the OCPA, the parties
to the OCPA began discussions to explore ways to terminate the OCPA and to
restructure the debt governed thereby.

In November 1995, a final plan was implemented which involved exchanges of
certain assets, debt and equity, as well as debt restructurings, with an
effective date of October 2, 1995 (the "Formation Date"). In a series of
transactions, the OCPA was terminated, and Portman Holdings, in which AMC has no
ownership interest, and AMC were formed. Certain assets subject to the OCPA and
certain interests in the Portman Companies were transferred to Portman Holdings,
which is controlled by Mr. Portman. Except for its equity interest in AMC, after
completion of the restructurings, all of the net assets held by Portman Holdings
are assets and liabilities of entities other than the predecessor companies to
AMC. Other assets subject to the OCPA, as more fully described below, were
transferred to AMC.

- Class E Claims: On the Formation Date, the Class E claims under the OCPA
aggregated $8,483,953. These claims were extinguished for no further
consideration.

- Apparel Mart Financing: On the Formation Date, the then existing Apparel
Mart mortgage financing was held by a lending syndicate comprised of seven
banks and had an outstanding balance of

39
<PAGE> 45

approximately $162,000,000. On the Formation Date, approximately
$72,000,000 of this debt (while still an obligation of the predecessor
companies) was forgiven and the balance of approximately $90,000,000 was
transferred to AMC and modified to become $80,000,000 in principal amount
of the Private Placement Notes issued directly to the individual members
of the lending syndicate. In addition, the members of the lending
syndicate received an aggregate of approximately 10,790,000 shares of
common stock of AMC, as well as warrants to purchase an additional
approximately 8,409,000 shares.

In the Formation, assets of approximately $214.9 million and liabilities of
approximately $345.4 million, representing all of the assets and liabilities of
the Marts and AMCMC, and the AMM Escrow Bonds and Antecedent Debt Bonds were
transferred to AMC. In addition, AMC received a $3,756,306 Purchase Money Note
of AMC Orlando, and a $446,220 Purchase Money Note of AMC Tampa. Each of such
Purchase Money Notes bear interest at the rate of 7.5% per annum and are due and
payable on July 20, 1999. Further, AMC received all of the common stock of LFGP,
which holds a 49.9981% general partnership interest in Portman Lightfair, and of
EC Holdings, which indirectly holds an interest in the EC and ECW mixed use
complexes located in San Francisco, California. The investments in LFGP and EC
Holdings have insignificant or no carrying values. Finally, AMC received the
Unimproved Land located in Atlanta, Georgia, with a carrying value of
approximately $0.4 million.

FINANCING

In connection with the Formation, the Company assumed and modified certain
indebtedness related to its assets and issued debt instruments to certain former
creditors as a modification of existing debt, the terms of which indebtedness
are described below.

Gift Mart Financing

Principal, Interest and Repayment. Atlanta Gift Mart, L.P., the partners
of which are wholly-owned subsidiaries of the Company, assumed the Gift Mart
Financing in the principal amount of $107.3 million with certain modifications.
Such indebtedness is due July 31, 1998 provided that the term may be extended
for one additional year if the Company achieves specified performance levels.
Interest on the Gift Mart Financing is payable at the prime rate plus 100 basis
points or LIBOR plus 200 basis points or IBOR plus 200 basis points at the
Company's option. The Company obtained an interest rate cap to the extent the
applicable rate exceeds 9% until September 1998. In addition, in connection with
the modification of the Gift Mart Financing as part of the Formation, the
Company incurred an extension fee in the amount of 1% of the principal balance
outstanding on October 2, 1995, payable in four equal annual installments. There
is no scheduled amortization; however, all net cash flow of Atlanta Gift Mart,
L.P. available for debt service after payment of current interest must be
applied to reduce the outstanding principal of the Gift Mart Financing. Net cash
flow for such purpose is cash remaining after payment of operating and other
expenses, including certain payments made to the Company by Atlanta Gift Mart,
L.P. and its corporate partners pursuant to a management agreement (see
"BUSINESS AND PROPERTIES -- The Marts -- Gift Mart and Trade Shows") and by the
subsidiaries

40
<PAGE> 46

of the Company that own Atlanta Gift Mart, L.P. pursuant to a tax sharing
agreement in an amount equal to all income taxes which would be payable if they
were not included in the Company's consolidated income tax returns (see "CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS -- Service Agreements -- Services of
Portman Holdings"). In addition, under the terms of the Gift Mart Financing, in
the event the Company proposes to repay the Notes with proceeds of any debt or
equity financing, a portion, based upon the ratio of the respective outstanding
balances under the Notes and the Gift Mart Financing, must be applied to reduce
indebtedness under the latter until the principal amount outstanding under the
latter reaches $77 million. A portion of the indebtedness under the Gift Mart
Financing is personally guaranteed by Mr. Portman.

Events of Default. Events of default under the Gift Mart Financing
include, among other things, nonpayment, bankruptcy (of Atlanta Gift Mart, L.P.,
the Company or Mr. Portman), breaches of covenants, sale of the Gift Mart, any
judgment against the Company in excess of $1 million, involuntary termination of
Messrs. Portman or Ryan in certain circumstances, the death or incapacity of Mr.
Portman, failure of the Gift Mart to maintain specified quarterly levels of net
operating income or any material adverse change in the financial condition of
Atlanta Gift Mart, L.P. In addition, any default under the Notes which results
in an acceleration of the indebtedness thereunder will constitute a default
under the Gift Mart Financing. Finally, any default under the AMM Escrow Bonds,
the Antecedent Debt Bonds or the Revolver will constitute an event of default
under the Gift Mart Financing if any such default results in acceleration of the
indebtedness under the Notes.

Revolving Line of Credit

Principal, Interest and Repayment. The Company has entered into the
Revolver with The Provident Bank which permits borrowings by the Company of up
to $10 million and matures on October 2, 2000. Borrowings under the Revolver are
available for working capital, capital improvements, mandatory debt service and
acquisition and start-up costs for new trade shows not to exceed $2.5 million.
Interest on the Revolver accrues at either LIBOR plus 215 basis points or the
prime rate plus 100 basis points, at the Company's option. Interest is due and
payable monthly and the principal is payable at maturity. The Company also has
agreed to pay a commitment fee of 0.5% per annum on the average daily unused
portion of the Revolver, which is payable quarterly in arrears. Borrowings under
the Revolver are secured by a first priority deed to secure debt on both the
Apparel Mart and Merchandise Mart and the pledge of related assets and the
receivables of such Marts. Under the terms of the Revolver, the Company is
subject to certain restrictions on its ability to incur additional debt. At May
24, 1996, the Company had $10 million available under the Revolver.

Events of Default. Events of default under the Revolver include, among
other things, nonpayment, breaches of covenants, bankruptcy or insolvency of the
Company, certain changes in control of the Company, sale of the Marts, or any
material adverse change in the financial condition of the Company. Additionally,
The Provident Bank may accelerate the indebtedness under the Revolver upon a
default under, and acceleration or nonpayment upon maturity of, the Gift Mart
Financing, the Notes or any other obligation of the Company or its subsidiaries
in excess of $10 million. Upon the occurrence of one or more events of default,
the lender may, by giving notice to the Company, terminate its obligation to
make any loans to the Company, except that if the Company becomes insolvent, the
lender will automatically be relieved of such obligations.

The Notes

Principal, Interest and Repayment. The Notes, which are due July 31, 2000,
bear interest at 7.5% per annum until July 31, 1997 and at 9.0% per annum
thereafter payable quarterly in arrears. Upon the earlier of the one hundred
twentieth (120th) day following the end of each fiscal year or the thirtieth
(30th) day following the completion of the annual reports required by the
Indenture, the Company is required to repay the principal amount of the Notes to
the extent of 50% of the Company's annual cash operating revenues in excess of
the sum of (i) the Company's operating expenses, real estate taxes and insurance
costs; (ii) mandatory debt service and debt reduction on the Gift Mart
Financing, the AMM Escrow Bonds, the Antecedent Debt Bonds, the Notes, the
Revolver and any other debt permitted under the Notes; (iii) the Company's
income taxes; and (iv) $10 million. Repayment is also required to the extent
that the Company's

41
<PAGE> 47

unrestricted cash and investments (as defined in the Indenture) exceed $15
million at the end of each fiscal year. Indebtedness under the Notes is secured
by a deed to secure debt on both the Apparel Mart and the Merchandise Mart
properties and the pledge of related assets, subject to the prior lien securing
the Revolver. See "THE NOTES" for a description of additional terms of the
Notes.

Antecedent Debt Bonds

Principal, Interest and Repayment. An aggregate of $8,033,600 in principal
amount of the Antecedent Debt Bonds were issued in connection with the
Formation, of which $730,327 in principal amount were issued to Atlanta Gift
Mart, L.P. and pledged to the Gift Mart lenders. The Antecedent Debt Bonds are
due July 31, 2000 and do not bear interest. The bonds are secured by (i) a first
priority pledge of the outstanding stock of EC Holdings and the subsidiaries
which own the Atlanta Gift Mart, L.P., (ii) a 34% direct and indirect limited
partnership interest in JPA Shanghai Associates, Ltd., which interest is owned,
and was pledged, by Portman Holdings and (iii) a first priority deed to secure
debt encumbering the Unimproved Land. The Company is entitled to liquidate any
of the collateral provided that the net proceeds are applied to the reduction of
the indebtedness under the Antecedent Debt Bonds (subject to the rights of
creditors under the Gift Mart Financing or the Notes in respect of the sale of
the stock of the subsidiaries which own the Atlanta Gift Mart, L.P.). In the
event that the Company has not liquidated its interest in the properties held by
EC Holdings or the Unimproved Land by October 2, 1997, a majority of the holders
of the Antecedent Debt Bonds can direct the bond trustee to foreclose on such
collateral for the bonds. Further, the bondholders have the right to cause the
bond trustee to foreclose on the interest in JPA Shanghai Associates, Ltd. after
October 2, 1998 but only if they have exercised their rights to foreclose on the
properties held by EC Holdings and the Unimproved Land.

Events of Default. Events of default under the Antecedent Debt Bonds
include nonpayment at maturity, the lapse of the security interest in the
collateral, bankruptcy of the Company, acceleration of the Notes, or
acceleration or failure to pay at maturity the Gift Mart Financing.

AMM Escrow Bonds

Principal, Interest and Repayment. An aggregate of $1,656,007 principal
amount of the Company's AMM Escrow Bonds were issued in connection with the
Formation. The AMM Escrow Bonds mature on July 31, 1997 and bear interest at
8.5% per annum. The bonds are secured by notes of AMC Orlando and AMC Tampa that
were issued in exchange for the redemption of common stock of such corporations
owned by Mr. Portman (the "Trade Show Notes"). The initial principal amount of
the Trade Show Notes aggregated $4,202,526 and the Trade Show Notes bear
interest at 7.5% per annum payable quarterly. The principal amount of the Trade
Show Notes is payable in equal semi-annual payments over the loan term. The AMM
Escrow Notes are also secured by the Company's partnership interest in Portman
Lightfair.

The Company is required to make quarterly interest payments and semi-annual
principal payments under the AMM Escrow Bonds. The principal payments are equal
to the aggregate principal installments due under the Trade Show Notes.
Additionally, to the extent payments received under the Trade Show Notes by the
Company exceed the scheduled payments under the AMM Escrow Bonds, such excess is
to be applied to prepay principal under the AMM Escrow Bonds. Principal will
also be repaid to the extent of any distributions to the Company in respect of
its partnership interest in Portman Lightfair.

Events of Default. Events of default under the AMM Escrow Bonds include,
among other things, nonpayment of principal or interest, lapse of the security
interest in any collateral, bankruptcy of the Company, acceleration of the Notes
or acceleration or failure to pay at maturity the Gift Mart Financing.

42
<PAGE> 48

BUSINESS AND PROPERTIES

GENERAL

AMC was incorporated as a Georgia corporation on September 29, 1995 and
organized effective as of October 2, 1995 in conjunction with the Formation. See
"FORMATION TRANSACTIONS -- Background." AMC is a special purpose corporation,
the business of which is restricted by the terms of Article II of AMC's Articles
of Incorporation to owning and managing trade marts, trade shows, special events
and consumer shows and activities reasonably related thereto, and the ownership
of the Unimproved Land, stock in EC Holdings and the Trade Show Notes (and
collateral relating thereto). The Bylaws of AMC provide that any amendment to
Article II of AMC's Articles of Incorporation requires the approval of a
majority of the "Independent Directors." Generally, an "Independent Director" is
a person who has not been affiliated or associated with the Company, Portman
Holdings or their respective affiliates or certain of their advisors during the
preceding five years or who is approved by the holders of a majority of the
common stock of the Company to serve in such capacity.

The Company's principal executive offices are located at 240 Peachtree
Street, N.W., Suite 2200, Atlanta, Georgia 30303, and its telephone number is
(404) 220-3000.

TRADE SHOW AND MART INDUSTRY OVERVIEW

A wholesale trade show allows Manufacturers to offer their goods to a broad
range of retailers at a single location. Trade shows are held at trade marts,
which are buildings specifically designed to serve as wholesale trade
facilities, or at other exhibition facilities. Trade marts offer Manufacturers
showrooms and also conduct periodic industry specific trade shows (also known as
"markets"). Buyers attend trade shows because they offer the opportunity to view
and compare products of numerous Manufacturers in a time and cost efficient
manner. Accordingly, trade shows are an intermediary between Manufacturers and
retailers in the distribution of products. A trade show is generally located in
a city which offers convenient transportation and adequate infrastructure to
support a large number of attendees. Trade shows are typically prominent in
industries in which products are non-standardized, change frequently or require
physical inspection before purchase. The success of a trade show depends both
upon the breadth of merchandise offered and participation by a large number of
buyers.

Trade shows are attended by buying groups of large retailers who prefer the
efficiency of purchasing associated therewith over individual meetings with
Manufacturers. Additionally, trade shows are attended by many retailers who
cannot afford to visit numerous Manufacturers and whose purchasing power may not
warrant visits from sales representatives of Manufacturers. For these reasons,
management believes that trade shows represent an essential buying opportunity
for smaller retail purchasers.

Because of travel time and costs, trade shows have historically drawn their
participants from the region in which they are located. Therefore, the success
of a trade show has depended in part on the economic performance of its
geographic region.

Trade marts offer Manufacturers the opportunity to rent showrooms for a
period of years, rather than just one trade show. Manufacturers historically
have made significant investments in such showrooms. These showrooms may be open
only during industry specific trade shows held at the trade mart or may serve as
a year round sales facility. In addition, some Manufacturers prefer only to rent
temporary exhibit space within a trade mart for a short period during a
particular trade show. Manufacturers may prefer to introduce new lines and
products in temporary exhibit space before investing in a showroom. The number
of trade shows or markets in a particular industry is keyed to major sales
seasons for such industry.

COMPANY STRATEGY

The success of a particular trade mart or a trade show depends upon its
ability to attract Manufacturers of a broad range of merchandise which in turn
attracts a substantial number of buyers. Similarly, a Manufacturer

43
<PAGE> 49

of merchandise seeks the opportunity to sell its products to the broadest number
of buyers. Accordingly, the Company markets to both Manufacturers and buyers.

The Company seeks out Manufacturers primarily through industry lists and
targeted mailings. In addition, the Company identifies Manufacturers at other
trade marts and trade shows in its industries and markets to them as well.
Similarly, the Company attempts to attract new and additional buyers for its
trade shows and Marts by targeted mailings using industry lists. The Company
also keeps records of all persons participating as buyers at its trade shows and
Marts and advises them of upcoming trade shows through direct mailings. Further,
the Company markets its Marts and trade shows through industry publications.

The Company provides many services which are important to attract both
Manufacturers and buyers to its facilities. For example, the Company provides
food services which are used by Manufacturers to entertain buyers. The Company
also focuses on cross-merchandising opportunities by educating buyers about the
variety of goods available from its various Marts. The Company sends buyers
registered for a trade show a buying guide which identifies Manufacturers that
will attend the trade show and includes specific floor plans with the location
of Manufacturers so that buyers can plan their trip in advance. Additionally,
the Company offers services such as seminars, fashion shows, parties,
entertainment, hotel reservation services and negotiated airline discounts to
attract buyers. Such services and promotions are described in marketing
materials prepared by the Company and mailed directly to buyers. The Company
believes its marketing efforts to attract buyers are important to Manufacturers
who evaluate a trade mart based, among other things, upon the number of buyers
which visit it.

The Company continually seeks to introduce new product lines in its Marts.
In recent years, the Marts have focused on product lines which present
cross-selling opportunities with existing product lines because a related line
of products can be introduced more efficiently if a critical mass of related
merchandise already exists. The Company's strategy has also been to expand
existing product lines and, accordingly, the number of Manufacturers represented
at its Marts. The Company's goal is to become a cross-category buying
destination where buyers can satisfy their buying requirements in a short period
of time rather than traveling to a number of different trade shows. Commencing
in January 1996, the Company consolidated its semi-annual gift show with its
home furnishings markets (into the international gift and home furnishings
market) to further maximize cross-selling opportunities for its Manufacturers.
This trade show brought together merchandise from five industries. Aerial
walkways between the Company's Marts facilitate cross-selling opportunities and
the Company is also seeking approval to construct additional aerial walkways
between the Gift Mart and the other Marts to facilitate further such
opportunities. See "-- Governmental Regulation -- Construction of Pedestrian
Bridges."

The Company believes that the breadth of merchandise at the Company's Marts
will enable it to attract additional buyers on a national and international
basis. Management believes that this strategy will make the Marts less dependent
on the regional economy of the Southeast. The Company believes that its goal of
establishing the Marts as national in scope will significantly enhance the
attractiveness of the Marts and distinguish them from competitive trade marts
operating primarily on a regional basis with a more limited range of
merchandise.

The Company also manages four trade shows which are not operated in
conjunction with its Marts (the "independent trade shows"). See "-- Independent
Trade Shows." In seeking Manufacturers and buyers for its independent trade
shows, the Company employs the same methods as it uses in the operation of its
Marts. The Company seeks opportunities to manage and, in limited circumstances,
to acquire additional existing trade shows. Generally, the Company will seek
independent trade shows in emerging industries or established trade shows which
it believes can be expanded through the Company's management.

44
<PAGE> 50

RECENT DEVELOPMENTS

The Company is currently evaluating the feasibility of creating a floral
and holiday center in the Merchandise Mart by relocating tenants from the Gift
Mart and securing leases from new tenants. The Company believes that the
creation of this center will provide additional cross-merchandising
opportunities. If the Company decides to develop the floral and holiday center,
the Company estimates that such development would involve expenditures of
approximately $6.0 million through August 31, 1997 in order to rebuild three
floors of the Merchandise Mart and to build pedestrian bridges between the Gift
Mart and the Merchandise Mart.

THE MARTS

Overview

The Marts are open throughout the year to accommodate those Manufacturers
who operate their showrooms as year round sales facilities and for the
convenience of buyers. The Company's Marts historically have generated more than
90% of the Company's revenues representing both rental revenues and trade show
revenues. The showrooms are generally rented for periods of one to five years
and are furnished by the tenants. Many tenants make significant investments in
tenant improvements. Each showroom is separately keyed. The Company also
currently devotes five floors of the Merchandise Mart, one floor of the Apparel
Mart and one floor of Inforum (an adjacent building partially managed by the
Company) for use as exhibit halls in which the Company rents temporary booths to
Manufacturers for short periods during particular trade shows. Periodically, the
Company redesignates space as rentable, non-rentable, permanent or temporary.

The Company requires that prospective buyers at its Marts meet certain
entrance criteria. To qualify for entry into the Marts, a prospective buyer must
furnish a business license and appropriate evidence of their business
operations. Each buyer must have a photo identification to enter the Marts.
Generally, these procedures are important to buyers because they ensure that
only wholesale buyers are allowed to participate in the Marts, and accordingly
such procedures protect their business.

Apparel Mart and Trade Shows

The Company operates the Apparel Mart, which is a wholesale buying facility
for purchasers of women's, children's and men's apparel, jewelry and fashion
accessories. In the 1995 Period, the Company generated approximately 27.0% of
its rental and trade show revenues through the Apparel Mart. Buyers at the
Apparel Mart have historically been primarily regional specialty store retailers
but department stores, catalog sellers and immediate delivery retailers also
contribute to sales.

The Apparel Mart is comprised of approximately 1.1 million rentable square
feet currently devoted to permanent space which currently houses approximately
590 showrooms, and approximately 156,000 rentable square feet currently devoted
to temporary exhibit space. During major trade shows, the showrooms are
supplemented by approximately 450 temporary booths. Because of the seasonality
and buying patterns of the apparel industry, there are five trade shows each
year. As of February 29, 1996, approximately 62% of the showrooms in the Apparel
Mart was leased.

The Apparel Mart has suffered declines in both tenant revenues and buyer
participation in trade shows in recent years reflecting the overall negative
trends in the apparel industry. In response to these negative developments, the
Company has consolidated its tenants in the Apparel Mart to make shopping more
convenient and to better utilize its occupied space. The Company has also added
smaller showrooms to allow larger Manufacturers to test new goods and to provide
an affordable option for smaller Manufacturers. Additionally, the Apparel Mart
has increased its focus on the "cash and carry" market, whereby buyers can buy
merchandise for immediate delivery to complement existing inventory and without
satisfying a minimum purchase requirement. This is particularly attractive to
smaller purchasers because they do not have to make large payments for future
inventories.

In 1993, the ISP was created within the Apparel Mart, which targets
Manufacturers offering athletic and sports clothing, footwear and equipment. As
of February 29, 1996, of the 226,000 square feet then allotted to the ISP
approximately 45.9% was leased. Management believes that the majority of the
remaining unleased

45
<PAGE> 51

space will be leased on a short term basis for the Olympics, which are being
held in Atlanta in 1996, for a variety of uses including a press center.
Management currently is evaluating its long term strategy regarding the ISP,
which has leased more slowly than expected.

Gift Mart and Trade Shows

The Company operates the Gift Mart, which is a wholesale buying facility
for purchasers of giftware. Buyers at the Gift Mart are primarily operators of
small specialty gift stores but also include mass merchandisers who shop the
Gift Mart primarily for upper end merchandise. While buyers at the Gift Mart are
predominantly regional, a significant number come from other regions of the U.S.
and foreign countries. In the 1995 Period, approximately 36.9% of the Company's
rental and trade show revenues were generated through the Gift Mart.

The Gift Mart is comprised of approximately 1,000,000 rentable square feet
which is all permanent space and currently houses approximately 550 showrooms.
During larger trade shows, the showrooms are supplemented by approximately 3,100
temporary booths in various exhibition space throughout the other Marts. The
gift industry typically has two larger trade shows in January and July, and two
additional trade shows in March and September of each year. As of February 29,
1996, approximately 98% of the Gift Mart's permanent space was leased.

While the Gift Mart has performed well to date, management believes that
the Gift Mart must find solutions to problems caused by conflicting dates of the
major trade shows and too many scheduled trade shows, two of which the Company
manages. The Company is currently assessing ways to attract new international
and out-of-region buyers, enhance selling activities at the markets and promote
cross-merchandising opportunities offered by the Company's other Marts.

The Company manages the Gift Mart pursuant to a management agreement dated
as of October 2, 1995 between the Company and its indirect subsidiary, Atlanta
Gift Mart, L.P. Pursuant to the terms of the management agreement, the Company
supervises, directs, controls, leases, markets, promotes, manages and operates
the Gift Mart. The initial term of the management agreement expires on September
30, 2005, and such term will be automatically renewed for two five year terms,
so long as the Company is not in default under the management agreement and
Atlanta Gift Mart, L.P. does not give timely notice of termination.

Pursuant to the terms of the management agreement, the Company is paid a
management fee equal to 3.0% of the gross revenues of the Gift Mart and receives
a commission on certain leases, extensions or renewals of leases. These payments
are treated as operating expenses of the Gift Mart and thus, can be paid to AMC
even though net cash flow of the Gift Mart must be utilized to reduce the
outstanding principal of the Gift Mart Financing. See "FORMATION
TRANSACTIONS -- Financing -- Gift Mart Financing." Either party may terminate
the management agreement if the other party breaches such agreement or files
bankruptcy, appoints a receiver or seeks reorganization, liquidation or similar
relief. Under the terms of the management agreement, each party agrees to
indemnify the other against any claims by third parties, including costs and
expenses, arising because of negligence, willful misconduct or breach of the
management agreement by the other party.

Merchandise Mart and Trade Shows

The Company operates the Merchandise Mart, which is a wholesale buying
facility for purchasers of home furnishings, including rugs, home textiles, home
accents and furniture. In recent years, the products exhibited in the
Merchandise Mart have evolved, reflecting changes in the home furnishings
industry. To adjust to these changes, the Company has attempted to capitalize
upon its ability to allocate space to and attract Manufacturers from segments of
the home furnishings industry that are growing. This has resulted in a shift
away from more commodity oriented products to products sought by higher-end
department and specialty stores and certain home furnishings stores to
differentiate themselves from mass market competition. For example,
Manufacturers of broadloom carpets occupied approximately 360,000 square feet in
the Merchandise Mart until consolidations and other changes in that industry
resulted in a shift from participation in the Merchandise Mart to participation
in the annual "Surfaces" trade show in Las Vegas. A portion of the

46
<PAGE> 52

space formerly occupied by such carpet Manufacturers is now leased to
Manufacturers of handmade and machine-made area rugs, a growing industry
segment. Similarly, with the departure of a substantial number of traditional
case good furniture Manufacturers to a semi-annual trade show held in High
Point, North Carolina, the Merchandise Mart has expanded the amount of space
leased to Manufacturers of home accents and decorative and accent furniture. In
the 1995 Period, the Company generated approximately 36.1% of its rental and
trade show revenues through the Merchandise Mart.

The Merchandise Mart is comprised of approximately 1.4 million rentable
square feet currently devoted
to permanent space which currently houses approximately 430 showrooms, and
approximately 525,000 rentable square feet currently devoted to temporary
exhibit space. During larger trade shows, the showrooms are supplemented by
approximately 750 temporary booths. Each of the home furnishings industries is
concentrated together and occupies space on specified floors of the Merchandise
Mart.

Rugs. As noted above, until 1993, the Merchandise Mart housed all major
Manufacturers in the broadloom carpet industry. With the departure of the
broadloom manufacturers, the Company refocused on handmade and machine-made area
rugs to replace these vendors. As of February 29, 1996, approximately 96.9% of
the approximately 274,000 square feet of rentable permanent space in the
Merchandise Mart designated for the area rug industry was leased and was
occupied by approximately 105 showrooms for area rugs. Two area rug trade shows
are held in January and July of each year. The January show is the largest and
draws approximately 65 exhibitors who lease temporary exhibit space. Buyers come
not only from the Southeast, but from other regions of the U.S. and foreign
countries as well.

Home Textiles. Home textiles was introduced as a separate industry in the
Merchandise Mart in January 1994. The home textiles industry was introduced
through the consolidation and expansion of many Manufacturers in this industry
segment who were located throughout the Gift Mart. The home textiles industry is
allocated approximately 113,000 square feet of rentable permanent space, of
which approximately 88.1% was leased as of February 29, 1996.

Home Accents. The home accents industry, representing lighting, wall
decor, silks, florals, antiques, clocks, decorative and accent furniture and
garden products, comprises approximately 249,000 square feet of rentable
permanent space of which approximately 88.1% was leased as of February 29, 1996.
Approximately 22% of this total rentable permanent space is focused as a gardens
section space and is comprised of smaller spaces which are leased primarily by
small Manufacturers. This industry has evolved and expanded as the amount of
space rented by traditional case good furniture Manufacturers has declined.

Home Furnishings. The home furnishings industry, which has historically
been comprised of traditional case good Manufacturers, is allocated
approximately 380,000 square feet of rentable permanent space of which
approximately 42.9% was leased as of February 29, 1996. As noted above, this is
a declining industry segment as historically structured; accordingly, the
Company is expanding the space allocated to other industries such as home
accents, which features furniture integrated with other home accents rather than
as a separate industry. The Company is also seeking to attract new industries to
replace the declining number of traditional case good furniture Manufacturers at
the Merchandise Mart.

INDEPENDENT TRADE SHOWS

The Company manages independent trade shows, one of which the Company has
an interest in and three of which are owned by third parties. In the 1995
Period, the Company generated less than 10% of its revenue through the
management of trade shows for third parties.

The Company is party to a separate management agreement with the owners of
certain trade shows: CGS Associates, L.P. ("CGS"); AMC Tampa; and AMC Orlando
(collectively, the "Owners"). CGS owns the California Gift Show; AMC Tampa owns
the Florida Gift Shows; and AMC Orlando owns the Orlando Surf Expo. Because of
the locations where these trade shows are produced, the merchandise offered
and/or the times when the shows are held, none of these trade shows directly
compete with the trade shows owned by the Company. Pursuant to the terms of
these management agreements, the Company supervises, directs, controls, markets,
promotes, manages and operates all of the trade shows owned by the Owners. Each
management

47
<PAGE> 53

agreement has an initial term that expires on October 2, 2000, and the
management agreement with CGS may be renewed for continuing one year terms,
absent breach by the Company until either party gives timely notice of
termination.

The Company is paid a management fee equal to 1.5% of the gross revenues of
the trade shows owned by CGS, and 3.0% of the gross revenues of the trade shows
owned by each of AMC Tampa and AMC Orlando.

Each Owner may terminate its respective management agreement if the trade
shows managed by the Company fail to generate specified levels of net cash flow
for any fiscal year, unless the Company can demonstrate that the shortfall was
primarily a result of matters beyond the reasonable control of the Company.
Additionally, an Owner may terminate its management agreement as to one or more
trade shows if such Owner has an agreement to sell such trade shows to an
unaffiliated third party. Either party may terminate its management agreement if
the other party breaches such management agreement or files bankruptcy, appoints
a receiver or seeks reorganization, liquidation or similar relief.

Under the terms of the management agreements, each party agrees to
indemnify the other against any claims by third parties, including costs and
expenses, arising because of the negligence, willful misconduct or breach of the
management agreement by the other party.

CGS, AMC Orlando and AMC Tampa are beneficially owned by members of Mr.
Portman's family and certain past and present employees of the Company and
Portman Holdings. AMC Orlando and AMC Tampa are indebted to the Company. See
"FORMATION TRANSACTIONS -- Financing" and "CERTAIN RELATIONSHIPS AND RELATED
TRANSACTIONS -- Other Agreements, Indebtedness and Interests -- AMC Tampa and
AMC Orlando."

The Company indirectly owns a 49.9981% interest in Portman Lightfair, which
indirectly owns an interest in a lighting trade show. The other beneficial
owners of Portman Lightfair are members of Mr. Portman's family and certain past
and present employees of the Company and Portman Holdings. The lighting trade
show was first produced in 1990 and is held alternately in New York City,
Chicago and San Francisco. The show features commercial lighting products and
services for professionals in the construction industry.

The Company seeks opportunities to manage and, in limited circumstances, to
acquire additional existing trade shows. The ability of the Company to purchase
additional trade shows is limited by the terms of its financing. See "FORMATION
TRANSACTIONS -- Financing -- Revolving Line of Credit." While the Company has
experienced success with certain existing trade shows, the Company and its
affiliates have also experienced losses in connection with the development of
certain other trade shows and special events in the past.

SPECIAL EVENTS

The Company has from time to time engaged in the special events business,
which includes the development, acquisition, and management of parties, fan
participation and other special events. These events are open to the general
public on an admission fee basis. This business differs in many respects from
the Company's core wholesale trade mart and trade show businesses, which are
usually not open to the general public and do not charge an admission fee.

Special events, a relatively new activity for the Company, are generally
speculative endeavors, the success of which is dependent on attendance. The
Company's experience with special events to date has been that it has been
unable to recoup the capital investments it has made. The Company at present has
no plans or commitments to participate in any new special events on a basis that
would involve significant costs or expenses to the Company.

OTHER

Under a contract with the owner of the Inforum, the Company markets,
promotes, leases, licenses, manages and operates the convention facility located
in the Inforum. The Inforum is an office building located adjacent to the
Apparel Mart which was designed and developed as a trade mart, and the two
buildings are

48
<PAGE> 54

connected by an aerial walkway. Exhibition space in the Inforum is utilized for
temporary booths during major trade shows at the Company's Marts.

The Company is in the process of leasing available space in its Marts for a
variety of uses during the 1996 Olympics being held in Atlanta, including for
hospitality and press use.

The Company also actively seeks to rent space throughout the Marts when it
is not being utilized for trade shows for functions such as parties, fundraisers
and other events. Additionally, the Company derives revenue from parking
facilities that are part of the Apparel Mart and Gift Mart, and retail leasing
of certain ground floor space in the Marts.

COMPETITION

The Company's Marts and trade shows compete with a variety of other trade
marts and trade shows throughout the United States. In addition, new or
additional trade marts or trade shows may be organized by existing competitors
or new market entrants which may adversely impact the Company's operations. For
example, the Inforum, a building located adjacent to the Company's Marts, was
designed and developed as a trade mart and conference center, and it is possible
that portions of the Inforum could be operated as some form of a trade mart in
the future.

Existing competitors to the Apparel Mart include the New York City garment
district and regional marts located in Dallas, Chicago, San Francisco and Miami.
Existing competitors to the Gift Mart include regional marts located in New
York, Dallas, Chicago, San Francisco and Los Angeles, as well as trade shows
owned or managed by a large competitor in New York, Boston, Washington, D.C.,
Chicago and San Francisco. Existing competitors to the Merchandise Mart include
High Point, North Carolina and the Surfaces show in the area rug industry; mill
showrooms and a semi-annual trade show in New York in the home textile industry;
and High Point, North Carolina and trade marts in Dallas and San Francisco in
the home accents and furniture industries.

The Company believes the primary basis on which trade marts compete is ease
and cost of transportation to a trade mart, availability and cost of local
accommodations, transportation, food and other services, and critical mass of
merchandise. Because of its location in Atlanta with its favorable air
transportation, infrastructure, accommodations and services, the convenience and
efficiencies of the Marts, and the breadth of its product line in a concentrated
area and emphasis on cross-merchandising, the Company believes it distinguishes
itself from, and is well positioned to compete against, other trade marts and
trade shows in each of its industries.

The Company also faces some indirect competition from Manufacturers who
engage in direct retail sales. Developments in telecommunication could establish
additional direct contact between Manufacturers and buyers.

THE PROPERTIES

The Company owns or ground leases the parcels of land on which its three
Marts are located and owns the Unimproved Land in downtown Atlanta, Georgia. The
Marts, which are wholly-owned by the Company, are adjacent to one another and
are connected by aerial walkways. Through its subsidiary, EC Holdings, the
Company also owns small minority interests in two mixed use complexes in the
financial district of San Francisco, California, EC and ECW.

Periodically, the Company redesignates space as rentable, non-rentable,
permanent or temporary.

Apparel Mart

The Apparel Mart, which was opened in 1979 and expanded in 1989, is a
15-story building located on an approximately 3.6 acre site. The property is
comprised of eleven separate tracts of land, approximately 65% of which is
ground leased to the Company. The facility has approximately 1.1 million
rentable square feet currently devoted to permanent space, and approximately
156,000 rentable square feet currently devoted to

49
<PAGE> 55

temporary exhibit space. Additionally, the building has a 15-story atrium, a
penthouse theater that seats approximately 1,000, a restaurant and on-site
parking, all of which the Company owns. As of February 29, 1996, approximately
62% of the showroom space was leased. Additional rental of exhibit space occurs
during the Company's trade shows. The Apparel Mart is subject to a deed to
secure debt, which secures the obligations of the Company under the Revolver,
and a deed to secure debt, which secures the obligations of the Company under
the Notes.

Merchandise Mart

The Merchandise Mart, which was opened in 1961 and expanded in 1967 and
1986, is located on an approximately 2.3 acre site. The property is comprised of
eight parcels, seven of which represent 0.6 acre and are ground leased by the
Company. The remaining 1.7 acre parcel is owned by the Company. The 23-story
building has approximately 1.4 million rentable square feet currently devoted to
permanent space and approximately 525,000 rentable square feet currently devoted
to temporary exhibit space. As of February 29, 1996, the permanent space in the
Merchandise Mart was approximately 65% leased. Additional rental of exhibit
space occurs during the Company's trade shows. Additionally, the executive
offices of the Company are located in the Merchandise Mart. The Merchandise Mart
is subject to a deed to secure debt, which secures the obligations of the
Company under the Revolver, and a deed to secure debt, which secures the
obligations of the Company under the Notes.

Gift Mart

The Gift Mart, which was opened in January 1992, is an 18-story building
located on an approximately 1.8 acre site. The Company owns this property, which
is subject to a deed to secure debt, which secures the Company's obligations
under the Gift Mart Financing. See "FORMATION TRANSACTIONS -- Financing -- Gift
Mart Financing." The 18-story building contains approximately 1.0 million
rentable square feet, which is all permanent space, and a five-level parking
garage. As of February 29, 1996, approximately 98% of such space was leased.

Other Properties

The Company indirectly owns small minority interests in two mixed use
complexes in San Francisco's financial district. EC, in which the Company owns
an approximately 3.4% interest, is comprised of four office buildings, a retail
mall and a hotel. The adjacent ECW, in which the Company owns an approximately
6.7% interest, is comprised of two office buildings and a hotel. Pursuant to the
limited partnership agreements for EC and ECW, the general partners of such
partnerships can make capital calls from time to time. The general partner of EC
recently has made such a capital call, pursuant to which the Company would be
required to contribute additional capital to maintain its current equity
interest in the limited partnership. The Company has not responded to this
capital call and does not presently intend to make capital contributions to this
limited partnership. Accordingly, the Company's interest in EC will decrease to
reflect the increased capital of other partners therein. Management currently
intends to sell its interests in both these partnerships. Any net proceeds from
such sales must be used to amortize the Antecedent Debt Bonds. The stock of the
Company's subsidiary that owns the interests in EC and ECW has been pledged as
security for the Antecedent Debt Bonds.

The Company also owns the Unimproved Land, an approximately 0.3 acre tract
of land in downtown Atlanta. The land currently is used for surface parking,
which generates sufficient net income to cover its operating costs. The Company
is not actively marketing the land for sale, however, if the property were sold,
any net proceeds must be used to amortize the Antecedent Debt Bonds. The
Unimproved Land is subject to a first priority deed to secure debt, which
secures the Antecedent Debt Bonds.

Leases

The leases for tracts of land that are a part of the Apparel Mart site have
terms expiring from February 2066 to August 2071. The leases for tracts of land
that are a part of the Merchandise Mart site have terms expiring in June 2061.
Under the terms of these leases, the Company may assign, sublet or encumber its
leasehold interests in such properties. The only event of default is the failure
of the Company to pay when due

50
<PAGE> 56

rent, taxes, assessments or other charges required to be paid to the lessor or
to pay insurance premiums for insurance policies required to be maintained by
the Company pursuant to the terms of each lease. If the Company fails to cure
such default within 90 days of receiving a notice of default, the lessor may
take possession of the property.

GOVERNMENTAL REGULATION

Environmental Matters

Under federal, state and local environmental laws, ordinances and
regulations, as owner or operator of real property, the Company may be liable
for the costs of removal or remediation of hazardous substances on, under or in
its property. Environmental laws may impose liability regardless of whether the
owner or operator knew of, or was responsible for, the presence of such
hazardous substances. Any required remediation or removal of such substances may
involve substantial costs. The Company has no knowledge of hazardous substances
being generated or disposed of on its properties.

In July 1995, the Company obtained Phase I environmental assessments
regarding each of the Marts and the Unimproved Land from independent
environmental consultants. The principal purpose of Phase I assessments is to
identify apparent potential environmental contamination for which the Company
may be responsible and, secondarily, to assess, to a limited extent, the
potential for environmental regulatory compliance liabilities. The Phase I
assessment reports did not reveal any environmental liability that management
believes would have a material adverse effect on the Company's business, assets
or operations, nor is the Company aware of any such liability. Nevertheless, it
is possible that these reports did not reveal all environmental liabilities or
that there are material environmental liabilities of which the Company is
unaware.

No assurances can be given that (i) future or amended laws, ordinances or
regulations or more stringent interpretations or enforcement policies of
existing environmental requirements would not impose any material environmental
liability or (ii) the environmental condition of the Company's properties will
not be affected by changes occurring subsequent to the date of the environmental
assessments, by the condition of properties in the vicinity of the subject
properties, or by third parties unrelated to the Company.

The Company believes that its properties are in compliance, in all material
respects, with all federal, state and local ordinances and regulations regarding
hazardous or toxic substances and other environmental matters, the violation of
which could have a material adverse effect on the Company. The Company has not
been notified by any governmental authority of any material noncompliance,
liability or claim relating to hazardous or toxic substances or other
environmental matters in connection with any of its present or future
properties.

Americans with Disabilities Act

Under the ADA, "public accommodations," such as the Marts, are required to
meet certain federal requirements relating to access and use by persons with
disabilities. In order for certain public areas of the Marts to comply with the
requirements of the ADA, structural barriers to handicapped access must be
removed, where removal is "readily achievable." A number of additional federal,
state and local laws exist which may also require modifications to the Marts, or
restrict certain renovations thereof, with respect to access thereto by disabled
persons. Noncompliance with the ADA or any of such other laws may result in the
imposition of fines or an award of damages to private plaintiffs. The Company
believes it is currently in compliance in all material respects with all ADA
requirements.

Construction of Pedestrian Bridges

The Marts are connected by aerial walkways to facilitate the movement of
pedestrians among the Marts. Bridges provide the opportunity to
cross-merchandise the gift industry with the Company's other core industries, a
key marketing strategy of the Company. The Company currently is planning to
construct three additional bridges between the Gift Mart and the Merchandise
Mart. The Company has obtained approval of the City of Atlanta to build one of
these additional bridges. Construction of new bridges requires the pre-approval
of the lenders of the Gift Mart as well as the City of Atlanta. There can be no
assurance that the Company can obtain the necessary approvals.

51
<PAGE> 57

NONCOMPETITION AGREEMENT

In conjunction with the Formation, Mr. Portman entered into a
Noncompetition Agreement with the Company dated as of October 2, 1995 (the
"Noncompetition Agreement"). The Noncompetition Agreement generally provides
that Mr. Portman will not directly or indirectly own and/or manage trade marts,
trade shows, special events and consumer shows within 13 specified counties in
the State of Georgia for a period of three years from the date thereof. The
Noncompetition Agreement also contains certain prohibitions against the use of
corporate and trade names of the Company by Mr. Portman, and certain
restrictions on the disclosure and use by Mr. Portman of trade secrets and other
confidential information of the Company.

EMPLOYEES

The Company had approximately 240 full-time employees at December 31, 1995.
In addition, the Company hires temporary employees as needed to support its
operations during peak trade shows. The Company believes its employee relations
are good.

LEGAL PROCEEDINGS

The Company is subject to certain claims in the ordinary course of
business. The Company is not involved in any legal proceedings which it believes
could have a material adverse effect upon its financial condition or operations.

52
<PAGE> 58

MANAGEMENT

DIRECTORS AND EXECUTIVE OFFICERS

Pursuant to the Company's Bylaws, the Board of Directors consists of seven
directors, divided into three classes (Class I, Class II and Class III), with
each class serving staggered three year terms. Certain of the Company's
directors must be Independent Directors as defined in the Company's Bylaws.
Class I and Class II each consist of two directors, one of whom in each class
must be an Independent Director. Class III consists of three directors, two of
whom must be Independent Directors. The initial term of each class of directors
will be less than three years. Class I is comprised of A.J. Robinson and Andrew
Young (an Independent Director) whose initial terms will expire at the annual
meeting of shareholders in 1997. Class II is comprised of D. Raymond Riddle (an
Independent Director) and John M. Ryan whose initial terms will expire at the
annual meeting of shareholders in 1998. Class III is comprised of R. Charles
Loudermilk, Sr. (an Independent Director), Mr. Portman and Stanley P. Steinberg
(an Independent Director) whose initial terms will expire at the annual meeting
of shareholders in 1999. Officers of the Company serve at the discretion of the
Board of Directors of the Company. Certain information regarding the executive
officers and directors of the Company is set forth below.

<TABLE>
<CAPTION>
NAME AGE POSITION
- ------------------------------------- --- ------------------------------------------------------
<S> <C> <C>
John C. Portman, Jr.................. 71 Chairman of the Board and Chief Executive Officer
John M. Ryan......................... 52 President and Director
Jeffrey L. Portman................... 37 Executive Vice President -- Sales and Marketing
David J. Nadeau...................... 38 Treasurer and Senior Vice President -- Finance
Virginia S. Gorday................... 50 Senior Vice President -- Operations and Administration
Neal G. Patton....................... 40 Secretary and General Counsel
Lawrence B. Gardner.................. 44 Vice President -- Human Resources
R. Charles Loudermilk, Sr............ 68 Director
D. Raymond Riddle.................... 62 Director
A. J. Robinson....................... 41 Director
Stanley P. Steinberg................. 63 Director
Andrew Young......................... 64 Director
</TABLE>

John C. Portman, Jr. has served as Chairman of the Board of the Company
since its incorporation, and as Chief Executive Officer of the Company since the
Formation. Prior thereto, Mr. Portman was the principal of the Portman Companies
for over 40 years. Mr. Portman has also served as the Chairman of Portman
Properties, Inc., the managing general partner of Portman Holdings, since the
Formation. Mr. Portman was the general partner of Los Angeles Bonaventure
Company, which filed a petition under Chapter 11 of the federal bankruptcy code
within the last five years. Mr. Portman is also President, sole director and
sole shareholder of the general partner of Portman Apparel Associates, L.P.
("Portman Apparel"), whose principal property was the subject of a receivership
action, which action resulted in foreclosure of such property in April 1996. Mr.
Portman is the father of Jeffrey L. Portman.

John M. Ryan has served as a Director of the Company since its
incorporation, and as President of the Company since the Formation. Prior
thereto, he had served as President of AMCMC since June 1994, as Chief Financial
Officer and Executive Vice President of the Portman Companies and Treasurer of
related entities from September 1991 through October 1995, and as Executive Vice
President of Portman Capital Company, one of the Portman Companies, for more
than five years prior thereto. Mr. Ryan is an executive officer of the general
partner of Portman Apparel, whose principal property was the subject of a
receivership action, which action resulted in foreclosure of such property in
April 1996.

Jeffrey L. Portman has served as Executive Vice President -- Sales and
Marketing of the Company since the Formation. Prior thereto, he had served as
Executive Vice President -- Sales & Marketing for AMCMC

53
<PAGE> 59

since June 1994. He had served as General Manager of the Atlanta Decorative Arts
Center, a company owned and controlled by Mr. Portman's wife, from July 1989
until June 1994. Jeffrey Portman is the son of Mr. Portman.

David J. Nadeau has served as Treasurer and Senior Vice
President -- Finance since the Formation. Prior thereto, he had served as Senior
Vice President -- Finance for AMCMC since June 1994. Prior thereto, he had
served as Vice President of Finance for the Portman Companies beginning in April
1991. He was Vice President of En-tout-cas (USA), a subsidiary of Crest
Nicholson PLC, an English private limited company from August 1987 until
September 1990. Mr. Nadeau is an executive officer of the general partner of
Portman Apparel, whose principal property was the subject of a receivership
action, which action resulted in foreclosure of such property in April 1996.

Virginia S. Gorday has served as Senior Vice President -- Operations and
Administration of the Company since the Formation. Prior thereto, she had served
as Senior Vice President -- Operations for AMCMC since March 13, 1995. She
served as Deputy Executive Director of Housing for the Atlanta Housing Authority
from November 1994 through March 1995. Prior thereto, she was Vice President --
Property Management for Peachtree Center Management Company, one of the Portman
Companies, for more than five years.

Neal G. Patton has served as Secretary and General Counsel of the Company
since the Formation. Prior thereto, he had served as General Counsel of AMCMC
since November 1994. He served as Assistant General Counsel of the Portman
Companies from November 1986 to November 1994.

Lawrence B. Gardner has served as Vice President -- Human Resources of the
Company since the Formation. Prior thereto, he had served as Vice
President -- Human Resources for the Portman Companies for more than five years.

R. Charles Loudermilk, Sr. has served as a Director of the Company since
the Formation. Mr. Loudermilk has been the Chairman, Chief Executive Officer and
President of Aaron Rents, Inc., for more than five years.

D. Raymond Riddle has served as a Director of the Company since the
Formation. Mr. Riddle has served as Chairman and Chief Executive Officer of
National Services Industries, Inc. ("NSI") since September 1994, and had served
as President and Chief Executive Officer of NSI beginning in January 1993. Prior
thereto, he had served as President and Chief Executive Officer of Wachovia
Corporation of Georgia for more than five years. Mr. Riddle serves on the Boards
of Directors of Atlanta Gas Light Company, Equifax Inc., National Services
Industries, Inc., Fuqua Enterprises, Inc. and Atlantic American Corporation.

A. J. Robinson has served as a Director of the Company since its
incorporation. In addition, he has served as the President of Portman
Properties, Inc., the managing general partner of Portman Holdings, since the
Formation. Prior thereto, he had been employed by Portman Overseas, one of the
Portman Companies, first as Executive Vice President and then as President, for
more than five years.

Stanley P. Steinberg has served as a Director of the Company since the
Formation. Mr. Steinberg has been Chairman and Chief Executive Officer of Sony
Retail Entertainment, a subsidiary of Sony Corporation of America since August
1994. Mr. Steinberg was Executive Vice President of Walt Disney Imageering, a
wholly-owned subsidiary of the Walt Disney Company, from January 1989 to July
1994. Prior thereto, he was Executive Vice President of the Portman Companies.

Andrew Young has served as a Director of the Company since the Formation.
Mr. Young has served as Vice Chairman of Law Companies Group, an engineering and
environmental consulting firm since January 1990. Prior thereto, he had served
as the Mayor of Atlanta from 1981 to 1989. Mr. Young is a director of Delta
Airlines Inc., Host Marriott Corporation and Cox Communications, Inc.

AUDIT COMMITTEE

The Board of Directors has established an Audit Committee, upon which
Messrs. Riddle, Young and Loudermilk serve. Mr. Riddle is the Chairman of the
Audit Committee. Each member of the Audit

54
<PAGE> 60

Committee must be an Independent Director. The Audit Committee makes
recommendations concerning the selection and engagement of the Company's
independent accountants. A majority of the Audit Committee must approve the
selection of any independent accountant of the Company prior to the engagement
of such independent accountant. The Audit Committee reviews the scope of the
audits of the Company and the subsidiaries as recommended by the independent
accountants, the scope of internal auditing procedures and reviews the reports
to the Audit Committee of the independent accountants and the internal auditors.

COMPENSATION COMMITTEE

The Board of Directors has established a Compensation Committee, upon which
Messrs. Steinberg, Riddle and Loudermilk serve. Mr. Steinberg is the Chairman of
the Compensation Committee. Each member of the Compensation Committee must be an
Independent Director. The Compensation Committee administers the Company's
incentive and stock option plans (if any) and other employee benefit and
compensation plans. Additionally, the Compensation Committee reviews, fixes and
determines the compensation paid by the Company and its subsidiaries to all (1)
directors, (2) executive officers, (3) employees whose aggregate annual
compensation (excluding leasing commissions) exceeds $100,000 and (4) employees
who are related to an executive officer or director of the Company or its
subsidiaries.

DIRECTOR COMPENSATION

The Company's Independent Directors receive an annual fee of $20,000, paid
quarterly, $1,000 for each Board of Directors meeting attended and $500 for each
committee meeting attended. Additionally, Independent Directors are reimbursed
for reasonable expenses incurred in connection with attendance at such meetings.

ACTION REQUIRING APPROVAL OF INDEPENDENT DIRECTORS

Pursuant to the Company's Bylaws, certain actions of the Company and its
subsidiaries require the affirmative approval of a majority of the Independent
Directors. These actions include: (1) adoption of the consolidated annual budget
and business plan; (2) any expenditure within the reasonable control of the
Company which would cause a line item in the approved consolidated annual budget
to be exceeded by more than 10%; (3) any transaction not provided for in the
approved consolidated annual budget involving in excess of 10% of the net worth
of the Company; (4) any amendment to the Company's Articles of Incorporation
involving the stated purpose of the Company; (5) the incurrence or refinancing
of debt not contemplated by the approved consolidated annual budget; (6) with
certain exceptions, the issuance of any security of the Company or any of its
subsidiaries or any security convertible into any such security or the grant of
a stock option or right to purchase any such security; (7) the dissolution,
merger, consolidation or liquidation of the Company or any of its subsidiaries;
(8) the election of directors of any subsidiary; and (9) any amendment to the
Bylaws of the Company or of any of the Company's subsidiaries.

55
<PAGE> 61

COMPENSATION OF EXECUTIVE OFFICERS

The Company's first fiscal year ends August 31, 1996. The following table
sets forth certain information concerning the compensation of the Company's
Chief Executive Officer and the four executive officers who are anticipated to
be the most highly compensated based upon base salary for the current fiscal
year.

SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
ANNUAL COMPENSATION
-----------------------------------
FISCAL OTHER ANNUAL
NAME AND PRINCIPAL POSITION YEAR SALARY(1) BONUS(2) COMPENSATION
- -------------------------------------------------------- ------ --------- -------- ------------
<S> <C> <C> <C> <C>
John C. Portman, Jr..................................... 1996 $ 700,000 $ -- $8,640
Chairman of the Board and
Chief Executive Officer
John M. Ryan............................................ 1996 280,000 -- 8,640
President and Director
Jeffrey L. Portman...................................... 1996 140,000 -- 8,640
Executive Vice President --
Sales and Marketing
David J. Nadeau......................................... 1996 125,000 35,000 2,500
Treasurer and Senior
Vice President -- Finance
Virginia S. Gorday...................................... 1996 115,000 35,000 2,500
Senior Vice President --
Operations and Administration
</TABLE>

- ---------------

(1) Represents annual base salary.
(2) The Company anticipates the payment of bonuses for the 1996 fiscal year to
the individuals listed above; however, no bonuses have been paid by the
Company to date during such fiscal year except as listed.

56
<PAGE> 62

PRINCIPAL STOCKHOLDERS AND SECURITY OWNERSHIP OF MANAGEMENT

As of March 31, 1996, there were 62,173,153 shares of common stock, $1.00
par value, of the Company ("Common Stock") outstanding. The following table sets
forth, as of March 31, 1996, certain information with respect to the beneficial
ownership of Common Stock by each person who owned, at such date, at least 5% of
the outstanding Common Stock, each director of the Company who owns Common
Stock, each executive officer of the Company named in the Summary Compensation
Table above who owns Common Stock, and all directors and executive officers of
the Company as a group. Except as otherwise noted below, each such person has
sole voting and investment power with respect to all shares shown below.

All of the Company's initial shareholders are subject to the terms of the
Shareholders Agreement, which provide that Portman Holdings has the right to
nominate or designate all seven of the Company's directors until the 1997 annual
shareholders' meeting. Each year thereafter, until the 2000 annual shareholders'
meeting, the number of directors to be nominated or designated by Portman
Holdings shall decrease by one. Accordingly, commencing at the 2000 annual
shareholders' meeting, and at all times thereafter, Portman Holdings shall
designate or nominate three directors. See "THE SHAREHOLDERS AGREEMENT."

<TABLE>
<CAPTION>
AMOUNT AND
NAME AND ADDRESS NATURE OF PERCENT
OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP OF CLASS
- --------------------------------------------------------------- -------------------- --------
<S> <C> <C>
Portman Holdings, L.P.......................................... 10,880,302(1) 17.5000%
240 Peachtree Street, N.W.
Suite 2200
Atlanta, Georgia 30303
John C. Portman, Jr............................................ 11,372,408(1)(2) 18.2915%
Chief Executive Officer and Chairman
240 Peachtree Street, N.W.
Suite 2200
Atlanta, Georgia 30303
Citicorp Real Estate, Inc...................................... 6,863,798 11.0398%
599 Lexington Avenue
25th Floor, Zone 11
New York, New York 10043
Banque Paribas, New York Branch................................ 6,098,883 9.8095%
The Equitable Tower
787 Seventh Avenue
New York, New York 10019
Joan N. Portman................................................ 4,479,356(3)(4) 7.2046%
240 Peachtree Street, N.W.
Suite 2200
Atlanta, Georgia 30303
The First National Bank of Chicago............................. 4,988,643 8.0238%
One First National Plaza
Mail Suite 0630
Chicago, Illinois 60670
Unibank A/S, New York Branch................................... 4,252,089 6.8391%
13-15 West 54th Street
New York, New York 10019
Paine-Webber Real Estate Securities Inc........................ 4,375,425(3) 7.0375%
1285 Avenue of Americas
New York, New York 10019
</TABLE>

57
<PAGE> 63

- ---------------

* Less than 1%.
(1) Includes 10,880,302 shares which are owned of record by Portman Holdings,
with respect to which John C. Portman, Jr., as sole shareholder of Portman
Properties, Inc., the sole general partner of Portman Holdings, has sole
voting and investment power.
(2) Includes 492,106 shares which are owned of record by Peachtree Hotel
Company, with respect to which John C. Portman, Jr., as sole general
partner of Peachtree Hotel Company, has sole voting and investment power.
(3) Includes 4,375,425 shares owned by Paine-Webber Real Estate Securities Inc.
subject to an agreement by Joan N. Portman to purchase such shares on or
before October 1, 1996. Paine-Webber Real Estate Securities Inc. has sole
voting power with respect to the shares.
(4) Includes 103,931 shares owned by CGS Associates, L.P., with respect to which
Joan N. Portman, as sole general partner of CGS Associates, L.P., has sole
voting and investment power.
(5) Such shares are owned of record by AMC Orlando, in which Jeffrey L. Portman
is a shareholder.
(6) Includes 3,254 shares owned of record by AMC Orlando, in which John M. Ryan
is a shareholder.
(7) Such shares are owned of record by AMC Orlando, in which Stanley P.
Steinberg is a shareholder.

58
<PAGE> 64

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

SERVICE AGREEMENTS

Prior to the Formation, the Portman Companies shared personnel who provided
certain services, including risk management, tax services, human resources
services and legal services, to all of such affiliated entities. Following the
Formation, such personnel will continue to provide certain of those services for
both the Company and Portman Holdings pursuant to a series of agreements as
described below. The cost of such services were determined based upon the cost
of services obtained from third parties or the direct personnel expenses of the
personnel providing such services. The service agreements have been approved by
the independent directors of the Company. Additional services may be provided
from time to time by Portman Holdings and the Company to each other during a
transition period as the need arises. It is the Company's intention that such
services will also be reimbursed based on the direct personnel expenses of the
personnel providing such services or the cost to the Company for such services.

Services of Portman Holdings

The Company and Portman Holdings have entered into an agreement dated
November 13, 1995 (the "Risk Management Agreement") whereby Portman Holdings
will provide risk management services to the Company. Portman Holdings will
receive $102,000 in twelve equal monthly installments for these services.
Portman Holdings will also be reimbursed for preapproved out-of-pocket expenses
and receive 50% of any claims management fee which is reimbursed to the Company
by insurance companies. The Risk Management Agreement expires on December 31,
1996, subject to annual renewal by Portman Holdings and the Company.

The Company and Portman Holdings have also entered into an agreement dated
January 24, 1996 (the "Financial and Strategic Planning Agreement") whereby
Portman Holdings will provide financial and strategic planning services to the
Company. Portman Holdings will receive $10,000 per month for these services. The
Financial and Strategic Planning Agreement expires on December 31, 1996, subject
to annual renewal by Portman Holdings and the Company.

The Company and Portman Holdings have entered into an agreement dated
January 24, 1996 (the "Staff Support Agreement") whereby Portman Holdings will
provide the services of two support personnel to assist Mr. Portman. Portman
Holdings will receive $5,000 per month for these services, which represents
approximately one half of the costs of providing such personnel. The Staff
Support Agreement expires on December 31, 1996, subject to annual renewal by
Portman Holdings and the Company.

The Company and Portman Holdings have entered into an agreement dated
November 14, 1995 (the "Tax Services Agreement") whereby Portman Holdings will
provide tax services to the Company on a time available basis based on specified
rates for personnel involved. The Tax Services Agreement expires on December 31,
1996. The scope of services is to be mutually agreed upon. The total cost of
services during the Company's 1996 fiscal year is estimated to be approximately
$80,000-$100,000.

The Company and Portman Holdings have entered into an agreement dated
October 25, 1995 (the "Cash Management Services Agreement") whereby Portman
Holdings will provide the Company with the services of its cash management
administrator in implementing and administering the Company's cash management
system. Services are reimbursed at a rate of $30 per hour. The total estimated
cost of services during the Company's 1996 fiscal year is estimated to be
approximately $1,500.

The Company and Portman Holdings have entered into an agreement dated April
1, 1996 (the "Construction Management Services Agreement") whereby Portman
Holdings will provide consulting services related to construction management.
Portman Holdings will receive $5,000 per month for these services. The
Construction Management Services Agreement expires on January 31, 1997, subject
to earlier termination by either party with sixty (60) days' prior written
notice.

The Company and Portman Holdings have entered into an agreement dated May
1, 1996 (the "Security Services Agreement"), whereby Portman Holdings will
provide certain security services for the Mart buildings. Portman Holdings will
receive approximately $29,000 per year for such services. The initial term of

59
<PAGE> 65

the Security Services Agreement expires on December 31, 1996 and such agreement
will automatically renew for successive terms of one (1) year, subject to
termination by either party after the initial term with thirty (30) days' prior
written notice.

Services of the Company

The Company and Portman Holdings have entered into an agreement dated
November 13, 1995 (the "Telephone Service Agreement") whereby the Company will
provide various telephone services to Portman Holdings, its affiliates and the
Atlanta Decorative Arts Center ("ADAC"), which is owned and controlled by Mr.
Portman's wife, Joan N. Portman. The services include maintenance and consulting
services at specified hourly rates, telephone services based on cost plus a
mark-up, and equipment at specified rates. The Telephone Service Agreement has
an initial term of one year but may be terminated at any time by either party on
two-months' written notice. Such agreement provides that it will be
automatically extended for a second one-year term in the event it is not
terminated prior to the expiration of the initial term. The total billings for
these services during the Company's 1996 fiscal year is estimated to be
approximately $87,000.

The Company and Portman Holdings have also entered into an agreement dated
November 13, 1995 (the "Human Resource Service Agreement") whereby the Company
will provide human resource services to Portman Holdings, its affiliates and
ADAC. The fee for the services is based on a fixed rate per employee per month
and is payable on a monthly basis. The Human Resource Service Agreement has an
initial term of one year but may be terminated at any time by either party on
three-months' written notice. Such agreement provides that it will be
automatically extended for a second one-year term in the event it is not
terminated prior to the expiration of its initial term. The total billings for
these services during the Company's 1996 fiscal year is estimated to be
approximately $120,000.

The Company and Portman Holdings have entered into an agreement dated
November 13, 1995 (the "Legal Services Agreement") whereby the Company's legal
department will provide legal services to Portman Holdings and its affiliates on
a time available basis at specified hourly rates. The agreement expires on
December 31, 1996. The total billings for these services during the Company's
1996 fiscal year is estimated to be approximately $20,000.

The Company and Portman Holdings have entered into an agreement dated
November 13, 1995 (the "Computer Service Agreement") whereby the Company will
provide computer services to Portman Holdings, its affiliates and ADAC.
Maintenance services are provided at an hourly rate and access to hardware and
software at a base rate of $7,100 per month subject to increases and additional
costs in certain circumstances. The initial term of the Computer Service
Agreement is one year, but it may be terminated at any time by either party on
six-months' written notice. Such agreement provides that it will be
automatically extended for a second one-year term in the event it is not
terminated prior to the expiration of its initial term. The total billings for
these services during the Company's 1996 fiscal year is estimated to be
approximately $113,000.

The Company and Portman Holdings have entered into an agreement dated
January 1, 1996 (the "AMC Security Services Agreement"), whereby the Company
will provide certain security services for a building owned by Portman Holdings.
AMC will receive approximately $12,000 per year for such services. The term of
the AMC Security Services Agreement will expire on December 31, 1996.

Interests in Portman Holdings

At October 2, 1995, Portman Holdings owed the Company $320,507, which
primarily represented reimbursable expenses and has subsequently been paid. Mr.
Portman is the sole shareholder of Portman Properties, Inc., the sole general
partner of Portman Holdings, and beneficially owns a 36.5783% interest in such
partnership. Joan N. Portman and Jeffrey L. Portman beneficially own a 21.2417%
and 4.6743% interest, respectively, in Portman Holdings, and the other adult
children of Mr. Portman and a trust, the beneficiaries of which are Mr.
Portman's adult children and their heirs, beneficially own an aggregate 37.5057%
interest in Portman Holdings.

60
<PAGE> 66

OTHER AGREEMENTS, INDEBTEDNESS AND INTERESTS

The Company is a party to a separate management agreement with AMC Orlando,
AMC Tampa and CGS. See "BUSINESS AND PROPERTIES -- Independent Trade Shows."
Additionally, as part of the Formation, the Company received a Purchase Money
Note of each of AMC Orlando and AMC Tampa. Each of such Purchase Money Notes
bears interest at the rate of 7.5% per annum and is due and payable on July 20,
1999. See "FORMATION TRANSACTIONS -- Background." Further, the Company has
accounts receivable from certain affiliates, primarily representing management
fees and reimbursable expenses, upon which interest does not accrue.

AMC Tampa and AMC Orlando

At October 2, 1995, AMC Orlando owed the Company $25,753 in addition to the
Purchase Money Note in the principal amount of $3,756,306. Jeffrey L. Portman
beneficially owns a 10.9679% interest in AMC Orlando, and Messrs. Steinberg and
Ryan, directors of the Company, each beneficially own a 2.6302% interest in AMC
Orlando. Mr. Portman's other adult children beneficially own an aggregate
60.0999% interest in AMC Orlando.

The Company holds the Purchase Money Note of AMC Tampa which at October 2,
1995 was in the principal amount of $446,220. Jeffrey L. Portman beneficially
owns an 11.9075% interest in AMC Tampa, and Messrs. Steinberg and Ryan
beneficially own a 5.7110% and 2.8555% interest, respectively, in AMC Tampa. Mr.
Portman's other adult children beneficially own an aggregate 65.2485% interest
in AMC Tampa.

Messrs. Portman and Ryan are executive officers and directors of both AMC
Orlando and AMC Tampa, and Neal G. Patton, Secretary and General Counsel of the
Company, is an executive officer of AMC Orlando and AMC Tampa.

CGS

At October 2, 1995, CGS owed the Company $63,914. Joan N. Portman
beneficially owns a 47.5477% interest in CGS and Jeffrey L. Portman beneficially
owns a 7.7115% interest in CGS. Mr. Portman's other adult children beneficially
own an aggregate of 41.2534% interest in CGS.

Portman Apparel

At October 2, 1995, Portman Apparel owed the Company $514,658, which was
reserved and subsequently written off by the Company due to the foreclosure of
Portman Apparel's principal property. Mr. Portman is the sole shareholder, sole
director and President of S.F. Fashion Center, Inc., the sole general partner of
Portman Apparel and beneficially owns an 85.8% interest in such partnership.
Messrs. Ryan and Robinson, directors of the Company, beneficially own a 4.0% and
3.0% interest, respectively, in Portman Apparel. An adult child of Mr. Portman
also beneficially owns a 0.2% interest in Portman Apparel. Mr. Ryan and Mr.
Nadeau, Treasurer and Senior Vice President -- Finance, are executive officers
of S.F. Fashion Center, Inc.

61
<PAGE> 67

THE NOTES

The Exchange Notes are identical to the Private Placement Notes in all
material respects. The only significant difference between the two is that the
Exchange Notes are registered pursuant to the Securities Act. Accordingly, the
following description of the Notes is equally applicable to the Exchange Notes
and the Private Placement Notes. Capitalized terms not defined below have the
meanings set forth under "-- Definitions" below.

The following description summarizes certain portions of the Indenture, but
does not purport to be complete and is subject to, and qualified in its entirety
by, reference to, all provisions of the Indenture. Holders of the Private
Placement Notes are, and holders of the Exchange Notes will be, entitled to the
benefit of, bound by, and deemed to have notice of, all of the provisions of the
Indenture. Copies of the forms of the Notes and the Indenture are filed as
exhibits to the Registration Statement of which this Prospectus is a part, and
copies of the Notes and the Indenture are available upon request from the
Company.

GENERAL

The Private Placement Notes have been, and the Exchange Notes will be,
issued pursuant to the Indenture. The terms of the Notes include those set forth
in the Indenture and those made a part of the Indenture by reference to the
Trust Indenture Act, as in effect on the date of the Indenture.

The Notes are general secured obligations of the Company limited to $160
million aggregate principal amount. The Private Placement Notes and the Exchange
Notes are treated as a single class of securities under the Indenture. The Notes
will not have the benefit of a sinking fund.

INTEREST

The Notes bear interest from the date of issuance until July 31, 2000, or
earlier upon an acceleration or redemption, at the rate of (i) 7.5% per annum on
the principal amount outstanding to and including July 30, 1997 and (ii) 9.0%
per annum on the principal amount outstanding thereafter. The Company will pay
interest quarterly in arrears on October 31, January 31, April 30 and July 31 of
each year (each an "Interest Payment Date"), to holders of record at the close
of business on the October 15, January 15, April 15 or July 15 next preceding
each Interest Payment Date. Interest on the Notes will accrue from the most
recent date to which interest has been paid or, if no interest has been paid,
from November 1, 1995. Interest will be computed on the basis of a 360-day year
of twelve 30-day months.

PRINCIPAL

To collect principal payments, holders of the Notes must surrender the
Notes to a Paying Agent (as hereinafter defined). In any case where the date for
any payment on the Notes is not a Business Day, such payment will be made on the
next succeeding Business Day; however, no interest shall accrue for the period
from and after the day upon which the payment was due. If money for the payment
of principal or interest remains unclaimed for two years, the Trustee or Paying
Agent shall pay the money back to the Company at its request unless an
abandonment property law designates another person. After any such payment,
holders entitled to the money must look only to the Company for payment.

PAYMENTS AND PAYING AGENT

The Company maintains an office or agency where the Notes may be presented
for payment (the "Paying Agent"). Initially, the Trustee will act as Paying
Agent of the Notes. The Company may appoint and change any Paying Agent upon
notice to the Trustee and the holders of the Notes. The Company or any of its
subsidiaries may act as Paying Agent. On each due date of the principal, or the
interest on any Note, the Company will deposit with the Paying Agent money
sufficient to pay such principal or interest that is due. The Company will pay
principal and interest in money of the United States that at the time of payment
is legal tender for payment of public and private debts. The Company may,
however, pay principal and interest by check payable in such money, and the
Company may mail an interest check to a holder's registered address.

62
<PAGE> 68

FORM, REGISTRATION AND TRANSFERS

The Notes are issuable only in registered form without coupons in an
aggregate principal amount not to exceed $160 million. No Note is binding or
obligatory for any purpose unless there appears on such Note a certificate of
authentication duly executed by the Trustee, and such certificate shall be
conclusive evidence and the only evidence that such Note has been duly
authenticated and delivered and is entitled to the benefits of the Indenture.
The Company maintains an office or agency where the Notes may be presented for
registration of transfer or for exchange (the "Registrar"). Initially, the
Trustee will act as the Registrar of the Notes. The Registrar keeps a register
of the Notes and of their transfer and exchange. To permit registrations of
transfers and exchanges, the Company shall execute and the Trustee shall
authenticate and deliver Notes at the Registrar's request. All Notes issued upon
any registration of transfer or exchange of Notes shall be the valid obligations
of the Company, evidencing the same debt, and entitled to the same benefits
under the Indenture, as the Notes surrendered upon such registration of transfer
or exchange.

Prior to due presentation for registration of transfer, the Trustee, the
Registrar, the Paying Agent and the Company may deem and treat the registered
holder of any Note as the absolute owner of such Note for the purpose of making
payment and for all other purposes.

RESTRICTIONS ON ACTIVITIES OF THE COMPANY

The Indenture provides that, among other things, the Company will not:

(a) declare or pay any dividends, purchase any of its Capital Stock,
make any distribution of assets, Capital Stock, warrants, rights, options,
obligations or securities to its shareholders or issue or sell any Capital
Stock (except (i) pursuant to warrants outstanding on the date of the
Indenture or (ii) an underwritten registered Initial Public Offering) or
any warrants, rights or options to acquire such Capital Stock or permit any
of its Subsidiaries to do any of the foregoing;

(b) create, incur, assume or suffer to exist, or permit any of its
Subsidiaries to create, incur, assume or suffer to exist, any debt other
than the debt evidenced by the Notes, other than debt existing on the date
of the Indenture after giving effect to the terms of the Indenture, and any
refinancing thereof, and unsecured debt incurred in the ordinary course of
business for property or services;

(c) create, incur, assume or suffer to exist, or permit any of its
Subsidiaries to create, incur, assume or suffer to exist, any Lien on or
with respect to any of its properties or sign or file, or permit any of its
Subsidiaries or a third party to sign or file, a financing statement that
names the Company or any of its Subsidiaries as debtor, excluding the Liens
created by the Collateral Documents and Permitted Liens;

(d) create, incur, assume or suffer to exist, or permit any of its
Subsidiaries to create, incur, assume or suffer to exist, any obligations
as lessee for the rental or hire of real or personal property in connection
with any sale or leaseback transaction or which require annual payments in
excess of $100,000;

(e) consolidate with, or merge with or into, any other entity, except
a Subsidiary;

(f) sell, transfer, lease or otherwise dispose of all or a substantial
part of its property and assets, except for cash consideration with respect
to sales in the ordinary course of its business; or

(g) engage in, or allow a Subsidiary to engage in, directly or
indirectly, any line of business activity other than the ownership and/or
management of trade marts, trade shows, special events and consumer shows
and activities reasonably related thereto.

REDEMPTION

The Indenture provides that the Company must redeem all or a portion of the
Notes under certain circumstances.

So long as any of the Notes remain outstanding, upon the earlier of the one
hundred twentieth (120th) day following the end of each Fiscal Year or the
thirtieth (30th) day following the completion of the annual reports required by
the Indenture, the Company shall redeem an aggregate principal amount of Notes
at a

63
<PAGE> 69

redemption price of 100% of the principal amount plus accrued and unpaid
interest thereon to the date thereof, equal to the Excess Cash Flow for such
Fiscal Year, with each holder receiving a pro rata portion of such payment and
redemption.

After payment in full of the Antecedent Debt Bonds, the Company shall
redeem the Notes to the extent of any net proceeds of any refinancing of the
Gift Mart Financing. The Company is also required to apply certain insurance and
condemnation awards in respect of properties subject to the Mortgages in
accordance with the terms set forth therein. The Company also must redeem all
then outstanding Notes at a redemption price of 100% of outstanding principal
plus accrued interest thereon on July 31, 2000.

Upon a Change in Control, any holder may require the Company to repurchase
all or any part of such holder's Notes at a cash purchase price equal to 101% of
the principal amount thereof, plus accrued and unpaid interest to the date of
repurchase, if any. In the event of such a repurchase, the Company will comply
with all then currently applicable securities laws. Upon a Change in Control,
the Company is required pursuant to the Indenture to notify the Trustee and
holders of the Notes, to establish the date of purchase not earlier than thirty
(30) days nor later than sixty (60) days from the date of such notice and
establish appropriate procedures consistent with Section 4.09 of the Indenture.
If such Change of Control did occur, the Company would not have sufficient funds
to redeem the Notes and upon the failure of the Company to redeem the Notes
within the time specified and as otherwise required under the Indenture, an
event of default would occur. Upon such a failure, the Company would be, by
reason of cross-default provisions, in default under the Gift Mart Financing,
the Revolver, the Antecedent Debt Bonds and the AMM Escrow Bonds and the Company
would be required to make payments to the creditors of the Gift Mart Financing,
with respect to proceeds from the Gift Mart, and the Revolver, with respect to
proceeds from the Apparel Mart and the Merchandise Mart, prior to redeeming the
Notes. Accordingly, unless the Company could refinance all such indebtedness
following a default, the Company would not be able to make the payments required
under the terms of its indebtedness, including the Notes.

At any time prior to maturity, the Company may elect to redeem the Notes,
in whole or in part, at a redemption price of 100% of the principal amount of
the Notes being redeemed plus accrued interest thereon to the date of
redemption; provided however, that any holder may, in its discretion, refuse to
accept a voluntary partial redemption (a "Refusing Holder") provided that other
holders holding Notes having an outstanding principal balance at least equal to
the amount of the proposed partial redemption are willing to accept partial
redemption ("Accepting Holders") and in such event the pro rata portion of such
partial redemption otherwise payable to the Refusing Holder shall be distributed
pro rata to Accepting Holders.

COLLATERAL FOR THE NOTES

The Notes are secured by mortgages on the Apparel Mart and the Merchandise
Mart, which are subordinated to the deed to secure debt on these properties
which secures the obligations of the Company under the Revolver. The rights of
the holders of the Notes are subordinated to the rights of the lenders of the
Revolver, as to the Apparel Mart and Merchandise Mart, and to the rights of
lenders under the Gift Mart Financing, as to the Gift Mart, which represent an
aggregate of up to $117 million in debt and bear interest at fluctuating rates.
See "FORMATION TRANSACTIONS -- Financing."

DEFAULTS AND REMEDIES

Under the Indenture, events of default include, among other things, (i)
default for ten (10) days in payment of interest on the Notes; (ii) default in
payment of principal on the Notes at maturity, upon redemption, upon
declaration, acceleration or otherwise; (iii) failure by the Company to comply
with other agreements in the Indenture or the Notes, in certain cases subject to
notice and lapse of time; (iv) certain accelerations (including failure to pay
within any grace period or after final maturity) of other debt of the Company or
any Subsidiary if the amount accelerated (or so unpaid) exceeds $10 million and
continues for thirty (30) days after the required notice to the Company; (v)
certain events of bankruptcy or insolvency with respect to the Company, Atlanta
Gift Mart, L.P. or any Material Subsidiary; (vi) certain judgments or decrees
for the payment of money in excess of $1 million; (vii) defaults related to the
Employee Retirement

64
<PAGE> 70

Income Security Act of 1974, as amended; (viii) failure to own, directly or
indirectly, 100% of the Gift Mart, the Apparel Mart and the Merchandise Mart;
(ix) a material adverse change; and (x) failure to register the Exchange Notes
on or before one hundred ninety (190) days after October 2, 1995, which date has
been extended to two hundred fifty (250) days after October 2, 1995.

If an event of default occurs and is continuing, the Trustee or the holders
of at least a majority in principal amount of the Notes (the "Required Holders")
may declare all the Notes to be due and payable immediately. Certain events of
bankruptcy or insolvency with respect to the Company, Atlanta Gift Mart, L.P. or
any other Material Subsidiary are events of default which will result in the
Notes being due and payable immediately upon the occurrence of such events of
default. The occurrence of an event of default which results in acceleration of
the indebtedness under the Indenture is an event of default under the Gift Mart
Financing, the Revolver, the Antecedent Debt Bonds and the AMM Escrow Bonds.
Such cross-default provisions under the Gift Mart Financing and the Revolver
will result in the rights of holders of the Notes being subordinated to the
rights of creditors under the Gift Mart Financing, as to the Gift Mart, and the
Revolver, as to the Apparel Mart and the Merchandise Mart. Holders may not
enforce the Indenture, the Notes or the Collateral Documents except as provided
in the Indenture. The Trustee may refuse to enforce the Indenture, the Notes or
the Collateral Documents unless it receives reasonable indemnity or security.
Subject to certain limitations, Required Holders may direct the Trustee in its
exercise of any trust or power. See "-- Limitations on Suits and Actions." The
Trustee may withhold from holders notice of any continuing Default (except a
Default in payment of principal or interest) if it determines that withholding
notice is in their interest.

The Indenture does not require the Trustee to send holders periodic reports
regarding the absence of an Event of Default or compliance with the terms of the
Indenture.

LIMITATION ON SUITS AND ACTIONS

A holder may not pursue any remedy with respect to the Indenture or the
Notes unless (i) the holder gives the Trustee written notice of a continuing
event of default; (ii) the Required Holders make a written request to the
Trustee to pursue the remedy; (iii) such holders offer to the Trustee reasonable
indemnity against any cost, liability or expense to be incurred in compliance
with such request; (iv) the Trustee does not comply with the request within
sixty (60) days after the receipt of the request and the offer of indemnity; and
(v) during such 60-day period, the Required Holders do not give the Trustee a
direction that is inconsistent with the request. The Trustee shall comply with
Section 316(a) of the Trust Indenture Act in making any determination of whether
the Required Holders have concurred in any request or direction of the Trustee
to pursue any remedy.

NO RECOURSE AGAINST OTHERS

A director, officer, employee or stockholder, as such, of the Company or
the Trustee shall not have any liability for any obligations of the Company
under the Notes, the Collateral Documents or the Indenture or for any claim
based on, in respect of or by reason of such obligations or their creation. By
accepting a Note, each holder waives and releases all such liability. The waiver
and release are part of the consideration for the issuance of the Notes.

MODIFICATIONS OF THE NOTES AND THE INDENTURE

The Company and the Trustee may amend or supplement the Indenture or the
Notes upon notice to, but without the consent of any holder: (a) to cure any
ambiguity, defect or inconsistency; (b) to comply with any requirements of the
Commission in connection with the qualification of the Indenture under the Trust
Indenture Act; (c) to provide for uncertificated Notes; or (d) to make any
change that does not adversely affect the rights of any holder.

Subject to certain conditions, the Company and the Trustee may amend the
Indenture or the Notes without prior notice to the holders, but with the written
consent of the Required Holders. The Required Holders, by written notice to the
Trustee, may waive future compliance with any provision of the Indenture or the
Notes.

65
<PAGE> 71

Notwithstanding the foregoing, without the consent of each holder affected,
an amendment or waiver may not (a) change the maturity date of the principal of,
or any installment of interest on, any Note or reduce the principal amount
thereof or the rate of interest thereon, or adversely affect any right of
repayment at the option of any holder; (b) reduce the percentage in principal
amount of the outstanding Notes required for any supplemental indenture, for any
waiver of compliance with certain sections of the Indenture and their
consequences provided for in the Indenture; (c) waive a default in the payment
of principal of, or interest on, any Note; or (d) modify any of the provisions
of the Indenture relating to the modification of the Indenture or Notes without
the consent of the Required Holders.

TRUSTEE DEALINGS WITH THE COMPANY

Subject to certain limitations imposed by the Trust Indenture Act, the
Trustee under the Indenture, in its individual or any other capacity, may become
the owner or pledgee of Notes and may otherwise deal with and collect
obligations owed to it by the Company or its affiliates and may otherwise deal
with the Company or its affiliates with the same rights it would have if it were
not Trustee.

INDEMNIFICATION OF TRUSTEE

The Indenture provides that the Company will indemnify the Trustee for any
loss, liability or expense incurred without negligence, willful misconduct or
bad faith on its part, arising out of, or in connection with, the acceptance or
administration of the Indenture.

REPLACEMENT OF NOTES

If any Note is mutilated, destroyed, lost or stolen, and in the absence of
notice to the Company or the Trustee that any such Note has been acquired by a
bona fide purchaser, the Company will execute and the Trustee will authenticate
and deliver a replacement Note of like tenor and principal amount. In each such
case, the applicant for a substitute Note must furnish such evidence of
destruction, loss or theft and such indemnity as the Company and the Trustee may
require. Mutilated Notes must be surrendered before new ones will be issued. The
Company and the Trustee may charge a holder for their expenses in replacing a
Note.

If any mutilated, lost, destroyed or stolen Note has become or is about to
become due and payable, the Company, in its discretion, may pay such Note
without issuing a replacement Note.

GOVERNING LAW

The Indenture and the Notes will be governed by, and construed in
accordance with, the laws of the State of Georgia.

DEFINITIONS

For purposes of this section, the following terms have the respective
meanings set forth below:

"Affiliate" means, with respect to any Person, any other Person directly or
indirectly controlling, controlled by, or under direct or indirect common
control with, such Person. With respect to natural persons, all individuals
related by blood, marriage or adoption shall be deemed to be an Affiliate of
such natural person.

"Business Day" means any day except a Saturday, Sunday or other day on
which commercial banks in the City of New York, in Atlanta, Georgia, or in the
city of the Corporate Trust Office of the Trustee, are authorized by law to
close.

"Capital Stock" means, with respect to any Person, any and all shares,
interests, rights to purchase, warrants, options, participations or other
equivalents of or interests in (however designated) corporate stock, including
each class of common stock and preferred stock of such Person, but excluding any
Indebtedness of such Person that is convertible into, or exchangeable for, such
shares, interests, rights to purchase, warrants, options or participations.

66
<PAGE> 72

"Capitalized Lease Obligation" means, with respect to any lease of property
which, in accordance with generally accepted accounting principles, appears on
the lessee's balance sheet as a capital lease, the amount of the liability which
should appear on such balance sheet.

"Change of Control" means (a) prior to any Initial Public Offering, the
individuals who are, either as of the date of the Indenture or the date of any
determination, directors, executive officers and employees of the Company or of
its Subsidiaries and the Affiliates of such directors, executive officers and
employees cease to own, in the aggregate, either directly or indirectly, at
least 15% of the common stock of the Company, (b) the time that the Company
first determines or reasonably should have known that any "person" or "group"
(other than a holder as of the Closing Date or an Affiliate of a holder as of
the Closing Date) (as such terms are used for purposes of Sections 13(d) and
14(d) of the Exchange Act, whether or not applicable) is or becomes the
"beneficial owner" (as such term is used in Rules 13(d)-3 and 13(d)-5 under the
Exchange Act, whether or not applicable, except that a "person" shall be deemed
to have "beneficial ownership" of all shares that any such person has the right
to acquire, if such right is then exercisable immediately), directly or
indirectly, (considering all of the Persons described in clause (a) to be a
single Person), together with such Person's Affiliates, of shares of the
Company's Capital Stock which amount to 60% or more of any one class of such
Capital Stock, or (c) the time that the Company first determines or reasonably
should have known that any "person" or "group" (other than a holder as of the
Closing Date or an Affiliate of a holder as of the Closing Date) (as such terms
are used for purposes of Sections 13(d) and 14(d) of the Exchange Act, whether
or not applicable) is or becomes the "beneficial owner" (as such term is used in
Rules 13(d)-3 and 13(d)-5 under the Exchange Act, whether or not applicable,
except that a "person" shall be deemed to have "beneficial ownership" of all
shares that any such person has the right to acquire, if such right is then
exercisable immediately), directly or indirectly, (considering all of the
Persons described in clause (a) to be a single Person), together with such
Person's Affiliates, of shares of the Company's Capital Stock which amount to
50% or more of any one class of such Capital Stock and the membership of the
Independent Directors of the Company changes (whether by resignation, addition
of new members, replacement of existing members, or the refusal to stand for
reelection (upon expiration of a term of office)) by two or more persons, in the
aggregate, in any consecutive twelve month period, other than by reason of death
or legal disability, provided that the failure of any Independent Director
standing for reelection to be reelected by the shareholders at the end of his
term shall not be deemed to constitute a change in the membership of the
Independent Directors for the purposes of this clause (c).

"Collateral Documents" means the deed to secure debt and security
agreement, assignment of leases and rents, assignment of contract documents and
other agreements in respect of the collateral securing the Notes, and any
agreements in replacement thereof, as the same may be amended, modified or
supplemented from time to time.

"Default" means any event that is, or after notice or passage of time or
both would be, an event of default.

"Excess Cash Flow" means, with respect to any Fiscal Year of the Company,
(a) the amount equal to 50% of the amount by which operating revenues of the
Company and its Subsidiaries (to the extent either distributed to the Company or
distributable to the Company) for such Fiscal Year (as determined annually
within 90 days after the end of each Fiscal Year) exceeds the sum of (i)
operating expenses, real estate taxes and insurance costs, (ii) mandatory debt
service and mandatory debt reduction on the Gift Mart Financing (and any
refinancing thereof), the AMM Escrow Bonds, the Antecedent Debt Bonds, the
Notes, indebtedness under the Revolver and any other debt of the Company
permitted hereunder (excluding debt service or reduction on nonrecourse
indebtedness to the extent such debt service cannot be paid from the cash of the
asset(s) of the Company acquired in connection with the incurrence of such
nonrecourse indebtedness), (iii) corporate cash income taxes of the Company due
for the Fiscal Year, and (iv) $10 million plus (b) the amount by which the
Company's unrestricted cash and Investments (as defined in the Indenture)
permitted under Section 4.28(a) of the Indenture but excluding principal and
interest payments under clause (a) above, exceeds $15 million at the end of each
Fiscal Year.

"Fiscal Year" means the fiscal year of the Company which is the 12-month
period beginning on September 1 and ending on the last day of August of the
immediately succeeding calendar year. The

67
<PAGE> 73

Company shall not change its fiscal year without the consent of the Required
Holders and written notice to the Trustee.

"Indebtedness" means, with respect to any Person, without duplication, (i)
all indebtedness of such Person for borrowed money or for the deferred purchase
price of property or services (including, without limitation, all obligations,
contingent or otherwise, of such person in connection with acceptance
facilities, Hedge Agreements (as defined in the Indenture), letter of credit
facilities or other similar facilities and in connection with any agreement to
purchase, redeem or otherwise acquire for value any capital stock of such
Person, or any warrants, rights or options to acquire such capital stock, now or
hereafter outstanding and nonrecourse indebtedness), (ii) all obligations of
such Person evidenced by bonds, notes, debentures or other similar instruments,
(iii) all indebtedness created or arising under any conditional sale or other
title retention agreement with respect to property acquired by such Person (even
though such indebtedness is nonrecourse indebtedness, but in such case,
nonrecourse indebtedness shall include only the lesser of the amount secured by
such property or the fair market value of such property), (iv) all Capitalized
Lease Obligations of such Person, (v) all preferred stock issued by such Person
which is redeemable other than at the option of such Person, valued at the
greater of its voluntary or involuntary liquidation preference plus accrued and
unpaid dividends, (vi) all obligations of such Person under Ground Leases (as
defined in the Indenture), (vii) all obligations under direct or indirect
guaranties in respect of, and obligations (contingent or otherwise) to purchase
or otherwise acquire, or otherwise to assure a creditor against loss in respect
of, indebtedness or obligations of others of the kinds referred to in clauses
(i) through (vi) above and (viii) all Indebtedness referred to in clause (i),
(ii), (iii) or (iv) above secured by (or for which the holder of such
Indebtedness has an existing right, contingent or otherwise to be secured by)
any Lien upon or in property (including, without limitation, accounts and
contract rights) owned by such Person, even though such indebtedness is
nonrecourse indebtedness, but in such case, indebtedness shall include only the
lesser of the amount secured by such property or the fair market value of such
property.

"Initial Public Offering" means the first offer and sale to the public of
shares of any Capital Stock of the Company by the Company pursuant to a
registration statement that has been declared effective by the Commission.

"Lien" means any lien, security interest, pledge or other charge or
encumbrance of any kind, or any other type of preferential arrangement
(including, without limitation, the lien or retained security title of a
conditional vendor and any easement, right of way or other encumbrance on title
to real property).

"Material Subsidiary" means any Subsidiary of the Company which at the time
of determination either (a) had net assets which, as of the date of the
Company's most recent quarterly consolidated balance sheet, constituted at least
10% of the Company's total net assets on a consolidated basis as of such date or
(b) had net revenues for the 12-month period ending on the date of the Company's
most recent quarterly consolidated statement of income which constituted at
least 10% of the Company's total net revenues on a consolidated basis for such
period.

"Mortgages" means each security deed, deed of trust, trust deed, mortgage
or leasehold mortgage made by the Company or any of its Subsidiaries in favor of
the Trustee for the benefit of the holders.

"Permitted Liens" means such of the following as to which no enforcement,
collection, execution, levy or foreclosure proceeding shall have been commenced
(other than pursuant to clause (ii)(y) below):

(i) Liens for taxes not yet due or Liens for taxes being contested in
good faith and by appropriate proceedings for which adequate reserves
including any penalties and interest in connection therewith (in the good
faith judgment of the Board of Directors) have been established;

(ii) Liens in respect of property or assets of the Company or any
Subsidiary of the Company imposed by law, which were incurred in the
ordinary course of business securing sums which are not overdue, such as
carriers, warehousemen's, landlords' and mechanics' liens, easements,
reservations, rights of way, zoning and restrictions on use and other
similar Liens arising in the ordinary course of business, and (x) which do
not (in the good faith judgment of the Board of Directors) in the aggregate
materially detract from the value of such property or assets or materially
impair the use thereof in the

68
<PAGE> 74

operation of the business of the Company or any Subsidiary of the Company
or (y) which are being contested in good faith by appropriate proceedings,
which proceedings have the effect of preventing the forfeiture or sale of
the property or assets subject to such Lien;

(iii) purchase money Liens or purchase money security interests upon
or in any property acquired or held by the Company or any Subsidiary in the
ordinary course of business to secure the purchase price of such property
which Liens are limited to the specific property so purchased;

(iv) Liens or security interests existing on property at the time of
its acquisition or on property of a Subsidiary existing at the time of
acquisition of such Subsidiary (in each case other than any such Lien or
security interest created in contemplation of such acquisition unless such
Lien or security interest is as described in clause (iii) above);

(v) Liens existing on the date of the Indenture as shown on a schedule
thereto after giving effect to the provisions of the Indenture and Liens in
connection with any refinancing thereof;

(vi) Liens securing the Gift Mart Financing, the AMM Escrow Bonds and
the Antecedent Debt Bonds existing on the date of the Indenture;

(vii) Liens arising in connection with the incurrence of Capitalized
Lease Obligations permitted under Sections 4.13 and 4.30 of the Indenture;

(viii) Liens created under the Revolver or any replacement thereof;
and

(ix) Liens securing the Notes pursuant to the Indenture.

"Person" means an individual, a corporation, a partnership, an association,
a trust, a limited liability company or any other entity or organization,
including a government or political subdivision or an agency or instrumentality
thereof.

"Subsidiary," with respect to any Person, means (i) a corporation a
majority of whose Capital Stock with voting power, under ordinary circumstances,
to elect directors is at the time, directly or indirectly, owned by such Person,
by such Person and one or more Subsidiaries of such Person or by one or more
Subsidiaries of such Person or (ii) any other Person (other than a corporation)
in which such Person or one or more Subsidiaries of such Person, directly or
indirectly, at the date of determination thereof has at least a majority
ownership interest.

EXCHANGE AND REGISTRATION RIGHTS AGREEMENT

The following description of the Exchange and Registration Rights Agreement
summarizes certain portions of such agreement, but does not purport to be
complete and is subject to, and qualified in its entirety by, reference to, all
provisions of the agreement. A copy of the Exchange and Registration Rights
Agreement is filed as an exhibit to the Registration Statement of which this
Prospectus is a part, and a copy of such agreement is available upon request
from the Company.

The Company has granted the holders of the Private Placement Notes certain
registration rights, which are set forth in the Exchange and Registration Rights
Agreement. Under the terms of such agreement, the Company agreed to use its best
efforts to file a registration statement covering the offer by the Company to
exchange Private Placement Notes for Exchange Notes and accordingly has filed
the Registration Statement of which this Prospectus is a part. Further, the
Company has agreed to accept for exchange Private Placement Notes or portions
thereof properly tendered and not validly withdrawn pursuant to the Exchange
Offer and to cause the Trustee to promptly authenticate and mail to each holder
of Exchange Notes equal in principal amount to the principal amount of the
Private Placement Notes tendered by such holder.

The Exchange and Registration Rights Agreement requires that the Company
pay all expenses incurred in connection with the filing of the Registration
Statement. Each holder is required to pay all brokerage fees and commissions and
transfer taxes, if any, relating to the sale or disposition of such holder's
Private Placement Notes in the Exchange Offer.

69
<PAGE> 75

THE SHAREHOLDERS AGREEMENT

The following description of the Shareholders Agreement summarizes certain
portions of the Shareholders Agreement, but does not purport to be complete and
is subject to, and qualified in its entirety by, reference to, all provisions of
the Shareholders Agreement. A copy of the Shareholders Agreement is filed as an
exhibit to the Registration Statement of which this Prospectus is made a part,
and a copy of such agreement is available upon request from the Company.

The Shareholders Agreement contains provisions relating to the election of
directors of the Company. In addition, pursuant to the terms and provisions of
the Shareholders Agreement, the Company has granted the shareholders
registration rights relating to its Common Stock and has restricted its ability
to issue securities.

Under the terms of the Shareholders Agreement, initially, the members of
the Board of Directors shall be nominated or designated by Portman Holdings,
provided that four of such directors are Independent Directors, two of whom
shall belong to Class III, and one of whom shall belong to each of Class I and
Class II. Additionally, there shall be one of the three remaining directors in
each of the three classes.

Until the 1997 annual shareholders' meeting, Portman Holdings shall have
the right to nominate or designate all seven directors (including directors of
all classes previously nominated or designated by Portman Holdings), of whom
four shall be Independent Directors. Each year thereafter, until the 2000 annual
shareholders' meeting, the number of directors to be nominated or designated by
Portman Holdings shall decrease by one and the number of such nominees or
designees who must be Independent Directors shall decrease by one. Accordingly,
commencing at the 2000 annual shareholders' meeting and at all times thereafter,
Portman Holdings shall designate or nominate three directors, none of whom must
be Independent Directors.

Any person nominated or designated by Portman Holdings to replace an
Independent Director must be approved by a majority of the then remaining
Independent Directors, or if there are no remaining Independent Directors, by
the holders of a majority of the Common Stock outstanding.

The right of Portman Holdings to nominate or designate any directors shall
cease upon the death of Mr. Portman, the failure of Mr. Portman to be Chief
Executive Officer and Chairman of the Board of the Company and to be actively
involved in the management of the Company or the failure of Portman Holdings and
other Portman affiliates to own at least fifteen percent (15%) of the
outstanding Common Stock of the Company. Further, the right of Portman Holdings
to nominate or designate Independent Directors shall cease upon the resignation
or removal, for any reason other than death or disability, or the refusal to
stand for reelection of any two Independent Directors within any consecutive
12-month period. The right of Portman Holdings to nominate or designate any
members of the Board of Directors also shall terminate in the event that by the
date two hundred fifty (250) days from October 2, 1995, the Registration
Statement has not been declared effective by the Commission. In such event, the
Board of Directors would be elected by the shareholders as provided in the
Georgia Business Corporation Act.

The Company has agreed to use its best efforts to conduct a registered
initial public offering of Common Stock upon receipt of a request therefor from
holders of more than thirty-five percent (35%) of the then outstanding shares of
Common Stock and the opinion of certain underwriters that such offering is
feasible and would generate gross proceeds of at least $20 million under the
then current market conditions. If such request is received prior to April 2,
1998, and if the underwriter's opinion does not indicate an issue price of at
least $1.00 per share, then the written request for registration must be signed
by holders of sixty percent (60%) of the then outstanding shares of Common
Stock.

During the term of the Shareholders Agreement, the Company will not
authorize or issue any securities other than the outstanding shares of Common
Stock, grant any option or right to purchase any security of the Company, issue
any security convertible into such security or grant any option or right to
purchase any such convertible security, or agree to do any of the foregoing,
except: (a) pursuant to and in accordance with the terms and conditions of the
warrants issued in conjunction with the Formation; (b) Common Stock sold in an

70
<PAGE> 76

initial public offering; (c) the issuance of the Exchange Notes pursuant to the
Exchange Offer; and (d) the issuance of Common Stock in connection with the
Formation.

The Shareholders Agreement shall automatically terminate upon October 2,
2015 or an initial public offering, except that the rights of the shareholders
to demand a registration subsequent to an initial public offering shall continue
in full force and effect.

71
<PAGE> 77

CERTAIN FEDERAL INCOME TAX CONSIDERATIONS

The following discussion is based upon the provisions of the Code,
regulations promulgated under the Code by the Treasury Department ("Treasury
Regulations"), rulings, and judicial decisions now in effect, all of which are
subject to change. The following discussion does not discuss all aspects of
federal income taxation that may be relevant to a particular holder of the Notes
in light of personal investment circumstances or to certain types of investors
subject to special treatment under the federal income tax laws (for example,
life insurance companies, tax-exempt organizations, taxpayers subject to the
alternative minimum tax, and foreign taxpayers), nor does such discussion
address any aspects of state, local, or foreign tax laws.

CONSEQUENCES OF EXCHANGE OF NOTES TO THE HOLDERS

Under proposed Treasury Regulations, a modification of a debt instrument
that is a "significant modification" is deemed to result in a sale or exchange
therefor for federal income tax purposes, resulting (in appropriate
circumstances) in gain or loss to the holder of the modified debt instrument,
cancellation of indebtedness to the issuer of the modified debt instrument, and
various changes under the OID rules and bond premium amortization.

Although there is no precedent directly on point or closely analogous,
because the economic rights of the holders against the Company are not being
modified, the Company intends to take the position that the exchange of Exchange
Notes for Private Placement Notes is not a significant modification for these
purposes and that instead the Exchange Notes should be treated as a continuation
of the corresponding Private Placement Notes. The Company intends to report the
transaction in this manner for federal income tax purposes. Even if the exchange
of Notes is not treated as a continuation of the Private Placement Notes, any
exchange of Notes should constitute a recapitalization of the Company within the
meaning of Section 368(a)(1)(E) of the Code, which would be a tax-free
transaction to the holders, except to the extent the principal amount of
securities received exceeds the principal amount of securities surrendered
therefor. Thus, the Company has obtained an opinion of Jones, Day, Reavis &
Pogue to the effect that the holder of a Private Placement Note should not
recognize gain or loss upon the exchange of such Private Placement Notes for
Exchange Notes; the holder's basis in the Exchange Notes should be the same as
its basis in the Private Placement Notes; and the holder's holding period for
the Exchange Notes for federal income tax purposes should include any holding
period for the Private Placement Notes. Such opinion is not binding on the
Service or any court, and there can be no assurance that the Service will not
assert successfully a contrary position.

If the issue price of the Exchange Notes were less than that of the Private
Placement Notes (see "-- Interest Income to Holders of Exchange Notes"), the
holder would have greater OID with respect to the Exchange Notes than with
respect to the Private Placement Notes exchanged therefor, but also would have a
greater bond premium in the Exchange Notes than in the Private Placement Notes.
For holders with a basis in their Private Placement Notes equal to their face
amounts, these two changes may offset one another, leaving the holder with the
same taxable interest income for each period under the Exchange Notes as it
would have had under the Private Placement Notes. See "-- Interest Income to
Holders of Exchange Notes."

CONSEQUENCES OF EXCHANGE OF NOTES TO THE COMPANY

As noted above, although there is no precedent directly on point or closely
analogous, because the economic rights of the holders against the Company are
not being modified, the Company intends to take the position that the exchange
of Exchange Notes for Private Placement Notes should not be deemed a significant
modification for federal income tax purposes and that instead the Exchange Notes
should be treated as a continuation of the Private Placement Notes exchanged
therefor. The Company intends to report the transaction in this manner for
federal income tax purposes. If this position is correct, the Company will not
recognize any cancellation of indebtedness income as a result of issuance of the
Exchange Notes pursuant to the Exchange Offer.

If the Exchange Notes issued in the Exchange Offer are not treated as a
continuation of the Private Placement Notes exchanged therefor, however, despite
treatment as a recapitalization, the Company could recognize cancellation of
indebtedness income. Section 108(e)(10) of the Code provides that, if a debtor

72
<PAGE> 78

issues a debt instrument in satisfaction of another debt instrument, there will
be cancellation of indebtedness to the extent the issue price of the old debt
exceeds the issue price of the new instrument. For these purposes, if the
Exchange Notes are not treated as a continuation of the Private Placement Notes,
the issue price of the Exchange Notes will be equal to (i) their fair market
value at the time of issuance, if the Exchange Notes are treated as "traded on
an established securities market" within the meaning of Section 1273(b)(3) of
the Code ("Publicly Traded"); and (ii) their face amount in all other cases.
Similarly, the issue price of the Private Placement Notes will be equal to (i)
their fair market value at the time of issuance, if the Private Placement Notes
are Publicly Traded, and (ii) their face amount in all other cases. Thus if
neither the Exchange Notes nor the Private Placement Notes are Publicly Traded,
there will be no cancellation of indebtedness income from an exchange of such
Notes pursuant to the Exchange Offer; but if either is Publicly Traded, there
could be such income. The amount of any such cancellation of indebtedness income
cannot be determined prior to the exchange, but could be substantial.

Under final Treasury Regulations, the Exchange Notes or Private Placement
Notes will be treated as Publicly Traded if, during the 60-day period ending 30
days after their respective initial issuances, such Notes (i) are listed on a
national securities exchange, an interdealer quotation system (such as The
Nasdaq National Market), or certain foreign exchanges; or (ii) appear on a
system of general circulation (a "Quotation Medium"), including a computer
listing disseminated to subscribing brokers, dealers or traders, that provides a
reasonable basis to determine fair market values by disseminating either (a)
recent price quotations (including rates, yields or other pricing information)
of one or more identified brokers, dealers or traders, or (b) actual prices
(including rates, yields or other pricing information) of recent sales
transactions. (For these purposes, a Quotation Medium does not include a
directory or listing of brokers, dealers or traders for specific securities,
such as yellow sheets, that provides neither price quotations nor actual prices
of recent sales transactions.) There are no cases and no public or private
rulings casting light on the determination of whether a Quotation Medium exists.
The Company is not presently aware of any indication that a Quotation Medium
exists for the Private Placement Notes, but can give no assurance that there is
no such Quotation Medium or that one will not develop prior to the Expiration
Date.

Even if the Exchange Notes are not treated as a continuation of the Private
Placement Notes and one or both of such types of Notes is Publicly Traded, the
Company believes that any cancellation of indebtedness income should be deemed
income to the previous owners of the Apparel Mart and the Merchandise Mart and
not to the Company. Final Treasury Regulations provide that if the terms of a
debt instrument are modified in connection with a sale or exchange of property
and the modification triggers an exchange of notes under Section 1001 of the
Code, unless the parties elect to the contrary, the modification is treated as a
separate transaction taking place immediately before the sale or exchange and is
attributed to the seller of the property, so that the seller (and not the
transferee) recognizes any cancellation of indebtedness income generated by the
modification. The Company received the Apparel Mart and the Merchandise Mart in
a sale or exchange transaction in which the debt to which such properties were
subject was modified by issuance of the Private Placement Notes and the parties
agreed to report such transaction in accordance with the above regulations. At
the time of such transactions, the Company was required as a condition of the
transactions to agree to use its best efforts to conduct the Exchange Offer.
Thus it can be argued that any cancellation of indebtedness income resulting
from the exchange of Notes must be treated, under the above referenced Treasury
Regulations, as occurring immediately prior to the transfer of the two Mart
properties, and as giving rise to income to the prior owners of such properties
rather than to the Company.

There is, however, no authority directly supporting or contradicting such a
conclusion beyond the language of the regulations themselves.

Given the legal and factual uncertainties described above concerning the
existence of a Quotation Medium and of which taxpayer would properly be required
to recognize any cancellation of indebtedness income, the Company has not sought
or obtained any opinion of counsel concerning the risks of cancellation of
indebtedness income. No ruling has been sought from the Service on this subject,
and there can be no assurance that the Service will not assert successfully a
position contrary to that of the Company. In the event that tax treatment is not
in accordance with the Company's interpretation, it is possible that the Company
would recognize material cancellation of indebtedness income in connection with
an exchange of Notes

73
<PAGE> 79

pursuant to the Exchange Offer. If it were required to recognize such income,
the Company could face a substantial tax liability which could have a material
adverse impact on the Company and its ability to pay interest and principal on
the Notes.

INTEREST INCOME TO HOLDERS OF EXCHANGE NOTES

The following discussion does not address all aspects of United States
federal income taxation laws that may be relevant to holders of Notes subject to
special rules under the United States federal income tax laws, such as
individual retirement and other tax-deferred accounts, life insurance companies,
tax exempt organizations, dealers in securities or currencies, financial
institutions, persons holding Notes as part of a hedging, straddle, or
conversion transaction, or persons whose functional currency is not the United
States dollar. This discussion deals only with Exchange Notes held as capital
assets and, except as otherwise noted, by initial purchasers.

HOLDERS OF PRIVATE PLACEMENT NOTES SHOULD CONSULT THEIR OWN TAX ADVISORS AS
TO THE PARTICULAR TAX CONSEQUENCES OF TENDERING SUCH PRIVATE PLACEMENT NOTES IN
THE EXCHANGE OFFER IN LIGHT OF THEIR PARTICULAR SITUATIONS, INCLUDING THE
APPLICABILITY AND EFFECT OF ANY FEDERAL, STATE, LOCAL, OR FOREIGN TAX LAWS, THE
TAX BASIS OF SUCH HOLDER IN ITS EXCHANGE NOTES, ANY ELECTIONS MADE OR METHODS OF
ACCOUNTING CHOSEN BY SUCH HOLDER, AND THE PROSPECTS FOR, AND THE POTENTIAL
IMPACT OF, ANY CHANGES IN THE APPLICABLE TAX LAWS.

Stated Interest. Unless otherwise provided by the OID rules discussed
below, all interest payments on Exchange Notes will be includable in a holder's
gross income as ordinary interest income in accordance with such holder's
regular method of accounting for tax purposes. For cash basis holders, such
payments will be includable in income when received (or when made available for
receipt, if earlier). For accrual basis holders, such payments will be
includable in income when all events necessary to establish the right to receive
such payments have occurred.

Original Issue Discount Rules. For federal income tax purposes, a debt
instrument has OID if its "stated redemption price at maturity" exceeds its
"issue price" by more than a specified de minimis amount. For OID purposes, the
"stated redemption price at maturity" of a debt instrument is equal to its
principal amount as of the date of original issuance plus all amounts (other
than "qualified stated interest") payable prior to or at maturity. The term
"qualified stated interest" generally means stated interest that is
unconditionally payable in cash or in property (other than debt instruments of
the issuer), or that will be constructively received under Section 451 of the
Code, at least annually in an amount equal to the product of the outstanding
principal amount of the debt instrument and a single fixed rate of interest
(adjusted to reflect differing lengths of time between payments, as
appropriate), certain variable rates of interest, or certain combinations
thereof. Under this definition, the scheduled interest payments on the Exchange
Notes will be qualified stated interest only to the extent they do not exceed
7.5% of the principal balance each year. (See "THE NOTES -- The
Indenture -- Interest" for details of payments of interest.) Thus the stated
redemption price at maturity for the Exchange Notes will include both the
principal of the Exchange Notes and the amount of interest payable in excess of
7.5% per year. If the Private Placement Notes are Publicly Traded when issued,
the Exchange Notes will have an issue price equal to the fair market value of
the Private Placement Notes. If the Exchange Notes are not viewed as a
continuation of the Private Placement Notes but such Exchange Notes are Publicly
Traded, the Exchange Notes will have an issue price equal to their fair market
value when issued. In all other cases, the issue price of the Exchange Notes
should be equal to their face amount. Because the stated redemption price at
maturity will exceed the face amount of the Exchange Notes (and their fair
market value when issued), the Exchange Notes will be debt instruments with OID
and will be subject to the rules governing such instruments.

The amount of OID will vary depending upon whether either the Exchange
Notes or the Private Placement Notes are Publicly Traded. The Exchange Notes
will have OID at least equal to the interest payable in excess of 7.5% under the
terms of the Indenture (i.e., the excess of the stated redemption price at
maturity, which equals such excess interest plus the principal amount due, over
the issue price which is no greater than the face amount). If either the
Exchange Notes or the Private Placement Notes are Publicly Traded, the Exchange
Notes may have greater total OID.

74
<PAGE> 80

As noted above, the Company is not presently aware whether the Private
Placement Notes are Publicly Traded. Moreover, until 30 days after the issuance
of the Exchange Notes, it will not be possible to conclusively determine that
the Exchange Notes are not Publicly Traded. Thus, the total amount of OID cannot
presently be determined.

Because the Exchange Notes will have OID, holders of such Exchange Notes
will be required to include OID in income as interest over the term of the
Exchange Notes under a constant yield method. In general, OID must be included
in income in advance of the receipt of cash representing that income, but such
inclusions may be offset by amortization of bond premium as discussed below.
Each holder should consult its own tax advisor regarding the impact to the
holder of the OID rules and amortizable bond premium rules.

Amortizable Bond Premium. If a holder purchases a debt instrument with OID
for an amount that is greater than its adjusted issue price at the time of
purchase, the amount includable in income as OID will generally be reduced by
the portion of such acquisition premium properly allocated to such year. Such
acquisition premium will generally be allocated to a year or other period under
the constant yield method used in allocating OID, unless the holder has made
certain contrary elections. Thus if a holder has a tax basis in its Exchange
Notes equal to their face amount but the Exchange Notes have an issue price less
than such face amount, the excess of face amount over issue price will be
treated as OID, but there will be an equal amount of amortizable bond premium.
In such a situation, unless the holder has made certain elections about the
method of amortizing bond premium, the net result of the OID rules and the bond
premium rules will be a zero inclusion in income, so that the holder will
generally take interest into income as if the OID rules did not apply. Holders
who amortize bond premium must reduce their tax bases in the related obligations
by the amount of the aggregate allowable accruals of amortizable bond premium.
Amortizable bond premium is treated for federal income tax purposes as an offset
to interest income on the Exchange Notes, rather than as interest expense. Each
holder is urged to consult its own tax advisor regarding the impact to the
holder of the amortizable bond premium rules.

POSSIBLE WITHHOLDING TAX ON INTEREST AND OTHER CONSEQUENCES FOR NON-U.S. HOLDERS

Except as discussed below, Non-U.S. Holders will generally be subject to
U.S. withholding tax at the rate of thirty percent (30%). As used herein, a
"Non-U.S. Holder" means a holder that is not one of the following: a citizen or
resident of the United States; a corporation, partnership, or other entity
created or organized in or under the laws of the United States or any political
subdivision thereof; or an estate or trust the income of which is subject to
United States federal income tax regardless of its source.

If a Non-U.S. Holder is engaged in a trade or business in the United States
and interest or OID on its Exchange Notes is "effectively connected" with such
trade or business, no withholding tax will apply if the holder submits to the
paying agent (and the paying agent provides the Company with) a properly
executed Internal Revenue Service Form 4224 (Exemption from Withholding of Tax
on Income Effectively Connected With the Conduct of a Trade or Business in the
United States) or successor form stating that interest paid on the Exchange Note
is not subject to withholding tax because it is effectively connected with the
owner's conduct of a trade or business in the United States.

If the interest is not "effectively connected" with a United States trade
or business of a Non-U.S. Holder, such interest may nevertheless qualify for an
exemption from U.S. withholding tax for "portfolio interest." However, the
portfolio interest exemption is not available if the Non-U.S. Holder owns,
directly or indirectly, ten percent (10%) or more of the outstanding Common
Stock of the Company; if the Non-U.S. Holder is a controlled foreign corporation
related to the Company through stock ownership; or if the Non-U.S. Holder is a
bank which receives the interest "on an extension of credit made pursuant to a
loan agreement entered into in the ordinary course of its trade or business." If
a Non-U.S. Holder is a bank which received its Private Placement Notes in
modification of and in exchange for loans previously made to the partnerships
which transferred the Marts to the Company, the portfolio interest exception may
not be available. Each such Non-U.S. Holder is urged to consult with its tax
advisors about the availability of portfolio interest treatment.

To obtain an exemption from withholding for portfolio interest, the Company
must be provided with certification under penalties of perjury either (a) from
the beneficial owner of the Exchange Note certifying that the beneficial owner
is not a United States person and the owner's name and address, and United
States

75
<PAGE> 81

taxpayer identification number, if any, are provided, or (b) in the case of an
Exchange Note held by a securities clearing organization, a bank, or other
financial institution that holds customers' securities in the ordinary course of
its trade or business (a "financial institution"), from the financial
institution certifying that it or a financial institution between it and the
beneficial owner has received a certificate from the beneficial owner and a copy
of such certificate is furnished to the Company or its agent. Such certification
should generally be provided on an IRS Form W-8 or a substantially similar form.
A certificate described in this paragraph is effective only with respect to
payments (including all OID) made to the certifying Non-U.S. Holder after
issuance of the certificate in the calendar year of its issuance and the two
immediately succeeding calendar years.

If interest paid on the Notes is not "effectively connected" with a United
States "trade or business" of a Non-U.S. Holder and the portfolio interest
exemption is not available, U.S. withholding tax at the rate of thirty percent
(30%) will apply. However, the rate of withholding tax may be reduced or
eliminated by an applicable income tax treaty in effect between the United
States and the home country of the Non-U.S. Holder. In order to take advantage
of any such benefit under an applicable tax treaty, the Non-U.S. Holder must
submit to the paying agent a completed IRS Form 1001 (Ownership, Exemption, or
Reduced Rate Certificate).

Proposed regulations ("Withholding Proposals") issued by the Service were
published in the Federal Register on April 22, 1996. If finalized, the
Withholding Proposals would substantially modify the existing rules summarized
above for the withholding of U.S. tax on payments of certain kinds of income
(including interest and OID paid by U.S. obligors) to foreign persons. The
Withholding Proposals would, if finalized in their current form and upon
becoming effective, make significant changes to certain of the procedures and
certification requirements described above in order to secure a reduction in, or
an exemption from, U.S. withholding tax otherwise due with respect to payments
on Exchange Notes or Private Placement Notes to Non-U.S. Holders. Subject to
certain exceptions and transition rules, if finalized in their current form the
Withholding Proposals would be effective for payments made after December 31,
1997, regardless of the date of issuance of the instrument with respect to which
those payments are made. There can be no assurance that the Withholding
Proposals will be finalized (whether before or after their proposed effective
date) or, if they are finalized, that they will not be materially modified from
their current form. Prospective Non-U.S. Holders are urged to consult their own
tax advisors with respect to the possible impact of the Withholding Proposals on
their particular situations.

Any gain or income realized by a Non-U.S. Holder upon the sale or
disposition (including by reason of redemption or retirement) of an Exchange
Note (other than amounts representing stated interest or accrued OID, the
treatment of which is described above) will not be subject to United States
federal income tax if (i) such gain or income is not effectively connected with
a trade or business in the United States of such holder, and (ii) in the case of
an individual holder, the holder is not present in the United States for a
period or periods aggregating 183 days in the taxable year of the sale or
disposition.

An individual holder of an Exchange Note who is not a citizen or resident
of the United States at the time of his or her death will not be subject to
United States federal estate tax as a result of such individual's death, if (i)
(a) such holder does not own, actually or constructively, on the date of death
10% or more of the total combined voting power of all classes of the voting
stock of the Company, and (b) any interest received on the Exchange Note, if
received by such holder at the time of his or her death, would not be
effectively connected with the conduct of a trade or business in the United
States or (ii) an exemption is otherwise available.

GAIN OR LOSS ON DISPOSITION OF EXCHANGE NOTES

Subject to the discussion of market discount below, if an Exchange Note is
sold, exchanged, or otherwise disposed of, the selling holder will recognize
gain or loss equal to the difference between the amount realized on the sale,
exchange, or other disposition and its adjusted tax basis in such Exchange Note.
Any such gain or loss will be capital gain or loss if the Exchange Note was held
as a capital asset.

76
<PAGE> 82

MARKET DISCOUNT

The market discount rules generally provide that if a subsequent holder
purchases the Exchange Note at a "market discount," such holder will be required
to treat any principal payments (or any payment that does not constitute
qualified stated interest) on, or any gain recognized on the sale or exchange
(including by reason of redemption or retirement) of an Exchange Note as
ordinary interest income to the extent of the market discount that has accrued
during the time the holder held the Exchange Note and that has not previously
been included in income. The accrual of market discount is generally calculated
on a straight-line basis. However, a holder may elect to calculate the accrual
of market discount on a constant interest rate basis. In general, "market
discount" will equal the excess (if any) of the Exchange Note's adjusted issue
price over such holder's tax basis for the Exchange Note immediately after its
acquisition. Under a de minimis exception, if the market discount is less than
one quarter of one percent of the stated redemption price at maturity multiplied
by the number of complete years to maturity, market discount is deemed to be
zero. The market discount rules also provide that a holder who acquires an
Exchange Note at a market discount may be required to defer a portion of any
interest expense that may otherwise be deductible on any indebtedness incurred
or maintained to purchase or carry such Exchange Note until the holder disposes
of the Exchange Note in a taxable transaction.

The Exchange Notes provide that they may be redeemed, in whole or in part,
prior to maturity under certain circumstances. If these securities were redeemed
in part, the former holder, as the holder of market discount securities, would
be required to include in gross income (as ordinary income) the portion of the
principal payment attributable to accrued market discount on the Exchange Notes.

BACKUP WITHHOLDING AND INFORMATION REPORTING

Payments of principal, interest, OID, and premium made within the United
States by the Company or any paying agent are generally subject to information
reporting and possibly to "backup" withholding at a rate of 31%. The amount
required to be reported by the Company may not be the same as the amounts of OID
required to be included in the gross income of a holder who is not an original
purchaser. A U.S. holder will be subject to 31% backup withholding in respect of
a payment, unless such holder provides its taxpayer identification number (e.g.,
social security number in the case of an individual) in the manner prescribed in
applicable Treasury Regulations and certain other conditions are met. Such
certification may be made on an IRS Form W-9 or substantially similar form.

Backup withholding generally does not apply to payments to certain "exempt
recipients" such as corporations. Non-U.S. Holders generally may establish an
exemption from backup withholding with respect to payments by the Company or any
paying agency thereof by providing the certification described in the fourth
paragraph under "-- Possible Withholding Tax on Interest and Other Consequences
for Non-U.S. Holders" above. Such certification may be made on an IRS Form W-8
or substantially similar form.

Payments of principal, interest, OID or premium to the beneficial owner of
an Exchange Note by the United States office of a custodian, nominee, or agent,
or payment of the proceeds of a sale of an Exchange Note to the seller thereof
by the United States office of a "broker" (as that term is defined in applicable
Treasury Regulations), will be subject to information reporting and backup
withholding unless such owner (i) certifies that he is a Non-U.S. Holder
(provided the payor does not have actual knowledge that such beneficial holder
is a United States person), (ii) provides his taxpayer identification number, or
(iii) otherwise establishes an exemption. Payment of principal, interest, OID or
premium to the beneficial owner of an Exchange Note by the non-United States
office of a foreign custodian, foreign nominee, or other foreign agent of such
beneficial owner, or payment of the proceeds of a sale of an Exchange Note to
the seller thereof by the non-United States office of a foreign broker,
generally, will not be subject to backup withholding or information reporting.
If, however, such nominee, custodian, agent, or broker is, for United States
federal income tax purposes, a controlled foreign corporation, a foreign person
that derives 50% or more of its gross income for certain specified periods from
the conduct of a trade or business in the United States, or, in the case of a
nominee, custodian, or agent, a United States person, such payment will be
subject to information reporting, unless the custodian, nominee, agent, or
broker has documentary evidence in its records that the

77
<PAGE> 83

beneficial owner or seller is not or was not, as the case may be, a United
States person and certain conditions are met or the beneficial owner or seller
otherwise establishes an exemption. Payment of the proceeds of a sale of an
Exchange Note to the seller thereof by the foreign office of a United States
broker will generally not be subject to backup withholding, but will be subject
to information reporting unless the broker has documentary evidence in its
records that the seller is not or was not, as the case may be, a United States
person and certain conditions are met or the seller otherwise establishes an
exemption.

The Withholding Proposals would, if finalized in their current form and
upon becoming effective, modify the foregoing rules to conform them generally to
the rules proposed therein with respect to withholding of U.S. tax on certain
payments to foreign persons and referred to in the sixth paragraph under
"-- Possible Withholding Tax on Interest and Other Consequences for Non-U.S.
Holders" above. Prospective Non-U.S. Holders are urged to consult their own tax
advisors with respect to the possible impact of the Withholding Proposals on
their particular situations.

Any amounts withheld under the backup withholding rules from a payment to a
holder will be allowed as a refund or credit against such holder's United States
federal income tax, provided that the required information is furnished to the
IRS.

The backup withholding rules are currently under review by the United
States Treasury Department, and their application to the Exchange Notes is
subject to change. Non-U.S. Holders should consult their tax advisors regarding
the application of information reporting and backup withholding in their
particular situations, the availability of an exemption therefrom, and the
procedure for obtaining such an exemption, if available.

The Company will report to the holders of the Notes and the IRS the amount
of any "reportable payments" for each calendar year and the amount of tax
withheld, if any, with respect to payments on the Exchange Notes.

THE FEDERAL INCOME TAX CONSEQUENCES SET FORTH ABOVE ARE BASED UPON THE
CODE, THE TREASURY REGULATIONS AND THE INTERPRETATIONS OF THE CODE AND TREASURY
REGULATIONS BY THE COURTS AND THE INTERNAL REVENUE SERVICE, ALL AS THEY EXIST AS
OF THE DATE HEREOF. THE FOREGOING DISCUSSION DOES NOT DISCUSS ALL ASPECTS OF
FEDERAL INCOME TAXATION THAT MAY BE RELEVANT TO A PARTICULAR HOLDER IN LIGHT OF
ITS INDIVIDUAL INVESTMENT CIRCUMSTANCES OR TO CERTAIN TYPES OF HOLDERS SUBJECT
TO SPECIAL TREATMENT UNDER THE FEDERAL INCOME TAX LAWS NOR DOES SUCH DISCUSSION
ADDRESS ANY ASPECTS OF STATE, LOCAL, OR FOREIGN TAX LAWS. ACCORDINGLY, HOLDERS
OF PRIVATE PLACEMENT NOTES ARE URGED TO CONSULT THEIR OWN TAX ADVISORS AS TO THE
PARTICULAR TAX CONSEQUENCES TO THEM OF TENDERING IN THE EXCHANGE OFFER,
INCLUDING THE APPLICATION OF FEDERAL, STATE, LOCAL, FOREIGN, AND OTHER TAX LAWS
AND POSSIBLE FUTURE CHANGES IN SUCH TAX LAWS.

LEGAL MATTERS

The validity of the Exchange Notes offered pursuant hereto will be passed
upon for the Company by Jones, Day, Reavis & Pogue, Atlanta, Georgia ("Jones
Day"). Certain tax matters have been passed upon for the Company by Jones Day.

EXPERTS

The consolidated balance sheet of AMC, Inc. and subsidiaries, as of October
2, 1995 and the combined financial statements and schedule of the Atlanta Market
Center Companies as of October 1, 1995 and December 31, 1994 and 1993, and for
the period from January 1, 1995 through October 1, 1995 and each of the years in
the three-year period ended December 31, 1994 have been included herein and in
the Registration Statement in reliance upon the reports of KPMG Peat Marwick
LLP, independent certified public accountants, appearing elsewhere herein, and
upon the authority of said firm as experts in accounting and auditing.

78
<PAGE> 84

INDEX TO FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
PAGE NO.
--------
<S> <C>
AMC, INC. AND SUBSIDIARIES
Independent Auditors' Report....................................................... F-2
Consolidated Balance Sheet as of October 2, 1995................................... F-3
Notes to Consolidated Balance Sheet................................................ F-4
Consolidated Balance Sheet as of February 29, 1996 (Unaudited)..................... F-15
Consolidated Statements of Operations and Retained Earnings for the Period from
October 2, 1995 through February 29, 1996 (Unaudited)............................ F-16
Consolidated Statement of Operations and Retained Earnings for the Three-Month
Period ended February 29, 1996 (Unaudited)....................................... F-17
Consolidated Statement of Cash Flows for the Period from October 2, 1995 through
February 29, 1996 (Unaudited).................................................... F-18
Notes to Unaudited Consolidated Financial Statements............................... F-19
THE ATLANTA MARKET CENTER COMPANIES
Combined Statement of Operations for the Period from October 1, 1994 through
February 28, 1995 (Unaudited).................................................... F-16
Combined Statement of Operations for the Three-Month Period ended February 28, 1995
(Unaudited)...................................................................... F-17
Combined Statement of Cash Flows for the Period from October 1, 1994 through
February 28, 1995 (Unaudited).................................................... F-18
Independent Auditors' Report....................................................... F-21
Combined Balance Sheets as of October 1, 1995 and December 31, 1994 and 1993....... F-22
Combined Statements of Operations for the Period from January 1, 1995 through
October 1, 1995 and for the Years ended December 31, 1994, 1993, and 1992........ F-23
Combined Statements of Equity (Deficit) for the Period from January 1, 1995 through
October 1, 1995 and for the Years ended December 31, 1994, 1993, and 1992........ F-24
Combined Statements of Cash Flows for the Period from January 1, 1995 through
October 1, 1995 and for the Years ended December 31, 1994, 1993, and 1992........ F-25
Notes to Combined Financial Statements............................................. F-26
</TABLE>

F-1
<PAGE> 85

INDEPENDENT AUDITORS' REPORT

The Board of Directors
AMC, Inc.:

We have audited the accompanying consolidated balance sheet of AMC, Inc.
and subsidiaries as of October 2, 1995. This consolidated financial statement is
the responsibility of the Company's management. Our responsibility is to express
an opinion on this consolidated financial statement based on our audit.

We conducted our audit in accordance with generally accepted auditing
standards. 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 of a balance sheet includes examining, on a test basis,
evidence supporting the amounts and disclosures in that balance sheet. An audit
of a balance sheet 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 consolidated
balance sheet provides a reasonable basis for our opinion.

As discussed in note 1, AMC, Inc. was formed and organized effective
October 2, 1995 principally to own and operate the businesses of certain
affiliated companies as part of a restructuring of the existing indebtedness of
such companies. The assets and liabilities have been recorded at their
historical cost. Included in stockholders' deficit are accumulated net losses of
the previously separately owned companies of approximately $51,116,000.

In our opinion, the consolidated balance sheet referred to above presents
fairly, in all material respects, the financial position of AMC, Inc. and
subsidiaries as of October 2, 1995 in conformity with generally accepted
accounting principles.

KPMG PEAT MARWICK LLP

Atlanta, Georgia
December 8, 1995

F-2
<PAGE> 86

AMC, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEET
OCTOBER 2, 1995

<TABLE>
<S> <C>
ASSETS
Current assets:
Cash.............................................................................................. $ 1,689,792
Restricted cash (note 8).......................................................................... 2,541,154
Restricted escrow deposits........................................................................ 4,765,453
Current maturities of notes receivable (notes 6 and 7)............................................ 1,050,632
Receivables:
Tenants......................................................................................... 3,746,094
Affiliate (note 3).............................................................................. 1,452,781
Other........................................................................................... 43,703
-------------
5,242,578
Less allowance for doubtful receivables......................................................... 2,647,816
-------------
Net receivables............................................................................. 2,594,762
-------------
Prepaid interest.................................................................................. 933,334
Prepaid property taxes............................................................................ 1,049,884
Other assets (note 8)............................................................................. 520,645
Deferred income taxes (note 11)................................................................... 1,661,954
-------------
Total current assets........................................................................ 16,807,610
-------------
Commercial property, at cost (notes 5, 7, and 8).................................................... 313,001,013
Less accumulated depreciation..................................................................... 112,112,403
-------------
Net commercial rental property.............................................................. 200,888,610
-------------
Notes receivable, less current maturities (notes 6 and 7)........................................... 3,151,894
Investment in affiliates (notes 4 and 7)............................................................ 33,796
Deferred income taxes (note 11)..................................................................... 23,927,785
Other assets (note 8)............................................................................... 2,561,653
-------------
$ 247,371,348
============
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
Current installments of corporate notes payable (note 7):
Mart Bonds interest payments.................................................................... $ 12,000,000
AMM Escrow Bonds................................................................................ 1,050,632
-------------
Total current installments of corporate notes payable....................................... 13,050,632
-------------
Accounts payable:
Trade and other................................................................................. 3,474,049
Affiliates (note 3)............................................................................. 203,633
-------------
Total accounts payable...................................................................... 3,677,682
-------------
Accrued interest payable.......................................................................... 3,268,256
Deferred revenue.................................................................................. 2,346,019
Accrued closing and other costs (note 8).......................................................... 2,954,026
-------------
Total current liabilities................................................................... 25,296,615
-------------
Corporate notes payable, excluding current installments (note 7):
Mart Bonds (face amount of $160,000,000).......................................................... 213,133,334
AMM Escrow Bonds.................................................................................. 605,375
Antecedent Debt Bonds............................................................................. 7,303,273
-------------
Total corporate notes payable, excluding current installments............................... 221,041,982
-------------
Mortgage loan payable (note 8)...................................................................... 107,282,009
Security deposits................................................................................... 3,715,620
Accrued loan extension fees, excluding current installments (note 8)................................ 536,410
-------------
Total liabilities........................................................................... 357,872,636
-------------
Stockholders' deficit (note 12)..................................................................... (110,501,288)
Commitments and contingencies (notes 3, 9, 12, 14, and 15)
-------------
$ 247,371,348
============
</TABLE>

See accompanying notes to consolidated balance sheet.

F-3
<PAGE> 87

AMC, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED BALANCE SHEET
OCTOBER 2, 1995

(1) ORGANIZATION, BUSINESS, AND BASIS OF PRESENTATION

AMC, Inc. (the Company) was incorporated as a Georgia corporation on
September 29, 1995 and organized effective October 2, 1995. The Company was
formed to own and manage trade marts, trade shows, special events, and consumer
shows and activities reasonably related thereto. The principal assets of the
Company are the Atlanta Apparel Mart, the Atlanta Merchandise Mart, and the
Atlanta Gift Mart buildings containing permanent showroom and exhibition space
for lease to non-related tenants over varying terms. The Company has a fiscal
year end of August 31.

Prior to October 2, 1995, the assets and businesses owned by the Company
were included in various partnerships and corporations controlled by John C.
Portman, Jr. (Portman). During 1991, Portman, Portman Properties (a
proprietorship of Portman), and certain other affiliates, including those owning
the assets and businesses contributed to the Company, restructured substantially
all of their then existing indebtedness under an Override and Collateral Pool
Agreement (OCPA). Portman and certain affiliates subsequently defaulted on
several provisions of the OCPA.

Effective October 2, 1995 (the "Formation Date"), the OCPA was terminated
and existing indebtedness of Portman and affiliates was further restructured
through a series of agreements with the applicable creditors whereby AMC, Inc.
would be formed to hold Portman's mart-related and certain other assets. In
exchange for certain net assets, with a deficit book value for accounting
purposes, contributed to the Company by Portman Holdings, L.P. (a partnership
indirectly controlled by Portman), Portman Holdings, L.P. received 17.5%
(10,880,302 shares) of the equity interest in AMC, Inc., which for accounting
purposes is regarded as a distribution to Portman of approximately $10,880,000.
The net assets contributed by Portman Holdings, L.P. for the shares of common
stock it received had been contributed to Portman Holdings, L.P. by CGS
Associates, L.P., a partnership in which Portman owned no interest but which was
wholly owned by family members, employees, and former employees of Portman.

On the Formation Date there were five classes of creditors (Classes A
through E) under the OCPA holding claims against Portman personally. In
addition, each of the Atlanta Apparel Mart, the Atlanta Merchandise Mart and the
Atlanta Gift Mart were encumbered by separate mortgage loans. As a part of the
OCPA termination, certain of this debt was forgiven and the remainder was
restructured, resulting in an extraordinary gain of approximately $68.0 million
for two of the predecessor companies, The Atlanta Apparel Mart and the Atlanta
Merchandise Mart, L.P. The debt was restructured as follows:

- Class A Claims: On the Formation Date, there were two types of Class A
claims under the OCPA. One type, in the aggregate amount of $2,706,639 held
by the lending syndicate that held the mortgage loan on the Atlanta
Merchandise Mart, was paid down to $1,656,007, which balance was modified
to become the Fixed Rate Class A AMM Escrow Notes due July 31, 1997 in the
principal amount of $1,656,007 (the "AMM Escrow Bonds"). Those bonds were
issued directly to the thirteen banks comprising the lending syndicate
which held the mortgage loan on the Atlanta Merchandise Mart. The other
type of Class A claim, in the aggregate amount of $8,033,600 held by eight
separate banks in varying amounts (being the banks which agreed to fund new
working capital to Portman when the OCPA was first put in place), was
modified to become the Class A Elevated Antecedent Debt Notes due July 31,
2000 in the principal amount of $8,033,600 (the "Antecedent Debt Bonds").

- Class B, C & D Claims: On the Formation Date, the Class B, C & D claims
under the OCPA, which represented personal obligations of Portman, were
determined to aggregate $280,329,854. These claims were extinguished in
exchange for the transfer by Portman of interests in certain assets which
had previously secured such claims. Such interests, which had a deficit
book value for accounting purposes, were then contributed to AMC by the
claimants for approximately 29,203,000 shares of common stock of the
Company. Because the transfer was in satisfaction of personal obligations,
the issuance of shares to

F-4
<PAGE> 88

AMC, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED BALANCE SHEET -- (CONTINUED)

the claimants is regarded as a distribution to Portman of approximately
$29,203,000 for accounting purposes.

- Class E Claims: On the Formation Date, the Class E claims under the OCPA
aggregated $8,483,953. These claims were extinguished for no further
consideration.

- Atlanta Apparel Mart Financing: On the Formation Date, the then existing
Atlanta Apparel Mart mortgage financing was held by a lending syndicate
comprised of seven banks and had an outstanding balance of approximately
$162,000,000. On the Formation Date, approximately $72,000,000 of this debt
(while still an obligation of the predecessor companies) was forgiven and
the balance of approximately $90,000,000 was transferred to the Company and
modified to become $80,000,000 in principal amount of the private placement
notes issued directly to the individual members of the lending syndicate.
In addition, the members of the lending syndicate received an aggregate of
approximately 10,790,000 shares of common stock of the Company, as well as
warrants to purchase an additional approximately 8,409,000 shares (see
notes 7 and 12).

- Atlanta Merchandise Mart Financing: On the Formation Date, the then
existing Atlanta Merchandise Mart mortgage financing was held by a lending
syndicate comprised of thirteen banks or other financial institutions and
had an outstanding balance of approximately $153,000,000. On the Formation
Date, approximately $60,000,000 of this debt (while still an obligation of
the predecessor companies) was forgiven. A portion of this debt in the
amount of $2,706,639 constituted a Class A claim, which was dealt with as
described above. The balance of approximately $91,000,000 was transferred
to the Company and modified to become the remaining $80,000,000 in
principal amount of the private placement notes issued directly to the
individual members of the lending syndicate. In addition, the members of
the lending syndicate received an aggregate of approximately 11,300,000
shares of common stock of the Company, as well as warrants to purchase an
additional approximately 8,807,000 shares (see notes 7 and 12).

- Atlanta Gift Mart Financing: On the Formation Date, the then existing
Atlanta Gift Mart mortgage financing was held by a lending syndicate
comprised of five banks and had an outstanding balance of $107,282,009. On
the Formation Date, this financing was modified to extend the term, to
increase the interest rate and to reflect numerous other changes from the
original loan documentation (see note 8).

AMC, Inc. common shares were issued and the debt restructuring was
finalized on November 17, 1995, however, effective control of the net assets of
the predecessor entities was transferred to the Company on October 2, 1995, from
which date the risks and rewards of ownership were those of the shareholders of
AMC, Inc. Because the measurement date for determining the restructured debt and
related amounts forgiven was October 2, 1995 and because the risks and rewards
of ownership were transferred to the AMC, Inc. shareholders effective October 2,
1995, the impact of recording the debt restructuring on its effective date
rather than the date upon which such restructuring was finalized is not material
to the Company's consolidated financial statements.

This restructuring has been accounted for as a troubled debt restructuring
in accordance with Statement of Financial Accounting Standards No. 15,
"Accounting by Debtors and Creditors for Troubled Debt Restructurings" (SFAS
15). Accordingly, the assets and liabilities of the Company have been recorded
at their historical cost and stockholders' deficit represents the excess of
liabilities over assets. Included in stockholders' deficit are accumulated net
losses of the previously separately owned businesses of approximately
$51,116,000.

The consolidated balance sheet includes the accounts of the Company and its
wholly owned subsidiaries: GMGP, Inc.; Gift Mart Limited Partner, Inc.; LFGP,
Inc.; and EC Holdings, Inc. All significant intercompany accounts have been
eliminated in consolidation.

F-5
<PAGE> 89

AMC, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED BALANCE SHEET -- (CONTINUED)

(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a) Restricted Escrow Deposits

Restricted escrow deposits represent deposits for the payment of property
taxes, insurance, and ground lease payments that are required by the Company's
lenders.

(b) Receivables

The Company's receivables primarily relate to billings to tenants who lease
space in the mart buildings and billings to affiliates for reimbursable
expenses. The Company generally provides for losses on tenant receivables that
are more than 60 days delinquent. Provisions for losses on affiliate receivables
are recorded based on specific analysis of the affiliate's ability to pay.

Commercial property is carried at cost and is depreciated using
straight-line and accelerated methods over the estimated useful lives of the
assets as follows:

<TABLE>
<S> <C>
Buildings and improvements............................................ 15 to 40 years
Tenant improvements................................................... 3 to 5 years
Furniture, fixtures, and equipment.................................... 5 to 7 years
</TABLE>

Management at least annually evaluates its commercial property and other
assets for impairment. In making such evaluation, management uses independent
appraisals, cash flow analyses and other relevant information to determine if
the carrying value of the assets are recoverable. For any asset for which the
carrying value is not considered to be recoverable, an impairment loss would be
recognized by a write-down of the asset to its fair value. The Company has not
experienced any significant impairment losses.

(d) Deferred Revenue

Trade show revenues are generally collected in advance and initially
recorded as deferred revenue. Trade show revenues are recognized in the month
the related show occurs.

(e) Income Taxes

The Company accounts for income taxes using an asset and liability approach
in accordance with Statement of Financial Accounting Standards No. 109 (SFAS
109). Under SFAS 109, deferred income taxes are recognized for the tax
consequences of "temporary differences" by applying enacted statutory tax rates
applicable to future years to differences between the financial statement
carrying amounts and the tax bases of existing assets and liabilities.
Additionally, the effect on deferred taxes of a change in tax rates is
recognized in earnings in the period that includes the enactment date.

(f) Recently Issued Accounting Pronouncements

In March 1995, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 121, "Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to be Disposed Of" ("SFAS 121")
which is effective for fiscal years beginning after December 15, 1995. This
statement requires that long-lived assets that are to be held and used by an
entity be reviewed for impairment whenever events or changes in circumstances
indicate that the carrying amount of any such asset may not be recoverable. In
the event that facts and circumstances indicate that the carrying value of
long-lived assets may be impaired, an evaluation of their recoverability would
be performed and any resulting impairment loss recorded. The implementation of
SFAS 121 is not expected to materially impact the Company's financial position
or results of operations because the Company periodically evaluates its
commercial property and other assets for impairment using independent
appraisals, cash flow analyses and other relevant information. The Company has
not experienced any significant impairment losses.

F-6
<PAGE> 90

AMC, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED BALANCE SHEET -- (CONTINUED)

(3) TRANSACTIONS WITH AFFILIATES

Transactions with affiliates are summarized as follows:

(a) Accounts Receivable

Accounts receivable from affiliates primarily represent management
fees, cash management advances, and reimbursable expenses and are
summarized as follows:

<TABLE>
<S> <C>
CGS Associates, L.P...................................... $ 63,914
Portman Holdings, L.P.................................... 320,507
Portman Apparel Associates, L.P.......................... 514,658
Race Events Joint Venture................................ 183,841
John Portman & Associates................................ 14,898
AMC Orlando, Inc......................................... 25,753
Lightfair International Associates....................... 23,925
Other.................................................... 305,285
----------
1,452,781
Less allowance for doubtful affiliate receivables... 772,535
----------
Net affiliate receivables...................... $ 680,246
=========
</TABLE>

(b) Accounts Payable

Accounts payable to affiliates represent certain reimbursable
expenses or noninterest-bearing advances and are summarized as follows:

<TABLE>
<S> <C>
Portman Holdings, L.P..................................... $173,633
Other..................................................... 30,000
--------
$203,633
========
</TABLE>

The Company has entered into various service agreements with
Portman Holdings, L.P. and other affiliates, summarized as follows:

- Telephone Service and Human Resource Service Agreements -- The
Company is to provide services which include telephone maintenance,
equipment and consulting services and human resource services based
on rates as defined in the agreements. These agreements have an
initial term of one year with an automatic extension of an
additional year if not terminated prior to November 13, 1996. These
agreements can be terminated by either party after notice, as
defined in the agreements, is given.

- Computer Service Agreement -- The Company is to provide computer
services including access and maintenance of hardware and software
at a monthly rate of $7,100, subject to

F-7
<PAGE> 91

AMC, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED BALANCE SHEET -- (CONTINUED)

increases and additional costs in certain circumstances. This
agreement has an initial term of one year with an automatic
extension of an additional year if not terminated prior to November
13, 1996. This agreement can be terminated by either party on
six-months' written notice.

- Risk Management Agreement -- Portman Holdings, L.P. will provide
risk management services for a monthly fee of $8,500 plus
reimbursable costs. Additionally, Portman Holdings, L.P. will
receive 50% of all claims management fees reimbursed to the Company
by insurance companies. This agreement expires December 31, 1996
and is subject to annual renewal.

- Financial and Strategic Planning Agreement -- Portman Holdings,
L.P. will provide financial and strategic planning services for a
monthly fee of $10,000. This agreement expires December 31, 1996
and is subject to annual renewal.

Other service agreements between the Company and Portman Holdings,
L.P. not identified above are either based on defined hourly rates for
services performed or are not significant.

(4) INVESTMENT IN AFFILIATES

The Company, through its wholly owned subsidiary LFGP, Inc., owns an
approximate 50% general partnership interest in a limited partnership, Portman
Lightfair Associates, L.P. (PLALP). The primary asset of PLALP is its one-third
ownership interest in Lightfair International Associates, a New York general
partnership. The Company's investment in PLALP and PLALP's investment in
Lightfair International Associates are accounted for using the equity method of
accounting.

The Company, through its wholly owned subsidiary EC Holdings, Inc., also
owns an interest in two mixed use complexes in San Francisco's financial
district. Embarcadero Center, in which the Company owns approximately 3.4%
interest, is comprised of four office buildings, a retail mall, and a hotel. The
adjacent Embarcadero Center West, in which the Company owns approximately 6.7%
interest, is comprised of two office buildings and a hotel. These investments
are known collectively as EC Holdings and are accounted for at cost. At October
2, 1995, these investments have no carrying value.

(5) COMMERCIAL PROPERTY

A summary of commercial property follows:

<TABLE>
<S> <C>
Land................................................................... $ 19,338,993
Buildings and improvements............................................. 242,184,657
Tenant improvements.................................................... 29,544,197
Furniture, fixtures, and equipment..................................... 19,481,933
Construction in progress............................................... 2,451,233
------------
$313,001,013
===========
</TABLE>

Construction in progress primarily relates to building and tenant
improvements under construction.

(6) NOTES RECEIVABLE

Effective October 2, 1995, Portman redeemed his entire ownership interest
in two affiliated companies (AMC Orlando, Inc. and AMC Tampa, Inc.) in exchange
for a total of $1,050,632 in cash and $4,202,526 in notes receivable. The notes
receivable were contributed by Portman and certain of his creditors to the
Company, and thus represent a component of the Company's stockholders' equity
(deficit), and are pledged

F-8
<PAGE> 92

AMC, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED BALANCE SHEET -- (CONTINUED)

as collateral to the AMM Escrow Bonds described in note 7. These notes
receivable mature on July 20, 1999, and are summarized as follows:

<TABLE>
<S> <C>
Receivable from:
AMC Orlando, Inc....................................................... $3,756,306
AMC Tampa, Inc......................................................... 446,220
----------
$4,202,526
=========
</TABLE>

The notes bear interest at 7.5% per annum and require payment of interest
quarterly. The principal amounts are payable in equal aggregate semiannual
payments of $525,316 over the term of the notes. AMC Tampa, Inc. has advised the
Company that it may have difficulty meeting its interest and principal repayment
obligations under its note payable to the Company. In the opinion of management,
non-payment by AMC Tampa, Inc. would have an insignificant effect upon the
Company's consolidated financial position or results of operations.

(7) CORPORATE NOTES PAYABLE

Effective October 2, 1995, the Company issued notes payable ("the Mart
Bonds") in the face amount of $160,000,000 to certain lenders in modification of
existing indebtedness as part of a troubled debt restructuring. The Mart Bonds
pay interest at the rate of 7.5% per annum until July 31, 1997 and 9.0% per
annum thereafter through maturity on July 31, 2000. Interest only is payable
quarterly in arrears. Over the term of the Mart Bonds, 50% of net cash flows (as
defined) in excess of $10,000,000 must be paid as principal reductions on the
Mart Bonds within 120 days after the end of each fiscal year. Additionally, net
proceeds from any future refinancing of the mortgage loan discussed in note 8,
after repayment of the Antecedent Debt Bonds discussed below, must be used to
reduce principal on the Mart Bonds. The remaining principal is due at maturity.
The Mart Bonds are secured by a deed to secure debt on both the Atlanta Apparel
Mart and the Atlanta Merchandise Mart properties and a pledge of related assets,
subject to the first lien discussed in note 9.

Covenants in the Mart Bond agreements (1) restrict the payment of dividends
or other distributions to stockholders of the Company as well as redemption by
the Company of any of its common stock; (2) restrict the incurrence of
additional debt; (3) restrict the acquisition of additional assets unless
certain net worth requirements and debt coverage ratios are maintained; (4)
place restrictions on affiliate transactions, mergers, and sale of assets; and
(5) allow for acceleration of the maturity of the Mart Bonds upon a default
under other debt agreements. In addition, the Mart Bonds become immediately
redeemable at 101% of par upon certain changes in ownership or management of the
Company as defined.

As a result of the aforementioned troubled debt restructuring in which the
previously existing debt exceeded the fair value of the equity interests in the
Company issued to the lenders and the total future principal and interest
payments called for under the Mart Bonds, the Mart Bonds have initially been
recorded at an amount equal to the total future cash payments, including
interest, specified by their terms in accordance with SFAS 15. All future cash
payments will be accounted for as a reduction of the carrying amount of the Mart
Bonds, and no interest expense will be recognized on the Mart Bonds.

Effective October 2, 1995, the Company also issued corporate notes payable
in the amount of $1,656,007 ("the AMM Escrow Bonds") to certain lenders. The AMM
Escrow Bonds bear interest at 8.5% per annum beginning November 1, 1995 and
mature on July 31, 1997. Interest on the AMM Escrow Bonds is payable quarterly
with the first payment on January 31, 1996. Principal is payable semiannually,
each January 31 and July 31, in amounts equal to the aggregate principal
installments due under the notes receivable described in note 6. Additional
principal payments are due in the amount of any prepayments received on the
notes receivable and any excess interest earned on the notes receivable over the
interest paid on the AMM Escrow Bonds plus any distributions received by the
Company relating to its investment in PLALP. The notes

F-9
<PAGE> 93

AMC, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED BALANCE SHEET -- (CONTINUED)

receivable described in note 6 and the investment in PLALP are pledged as
security against the AMM Escrow Bonds.

Required principal repayments under the AMM Escrow Bonds are as follows:

<TABLE>
<S> <C>
Fiscal year ending August 31:
1996................................................................... $1,050,632
1997................................................................... 605,375
=========
</TABLE>

Additionally, effective October 2, 1995, as part of the overall debt
restructuring of Portman and related entities, the Company issued corporate
notes payable in the amount of $8,033,600 ("the Antecedent Debt Bonds") to
certain other creditors, of which $730,327 in principal amount were issued to
Atlanta Gift Mart, L.P., a second-tier subsidiary of the Company, and pledged to
one of Atlanta Gift Mart, L.P.'s lenders of the mortgage loan discussed in note
8. The Antecedent Debt Bonds were issued in modification of an identical amount
of outstanding debt of Portman and affiliates. In conjunction with such
modification the Company also received certain investments which secure such
notes, as discussed in more detail below. In accordance with the requirements of
SFAS 15, since the payments called for under the Antecedent Debt Bonds were
equal to the previously outstanding debt's carrying value, no gain or loss was
recognized and no discount for imputed interest has been applied to the
Antecedent Debt Bonds. The Antecedent Debt Bonds are noninterest-bearing and
mature on July 31, 2000. The Antecedent Debt Bonds are secured by the Company's
investment in EC Holdings, Inc., the common stock of the Company's wholly owned
subsidiaries, GMGP, Inc. and Gift Mart Limited Partner, Inc. (which own the
partnership interests of Atlanta Gift Mart, L.P.), a portion of Portman's direct
and indirect limited partnership interest in JPA Shanghai Associates, Ltd., and
unimproved land owned by the Company. Under certain conditions as defined in the
bond agreements, such as the failure of the Company to liquidate the
above-mentioned assets, the holders of a majority of the Antecedent Debt Bonds
are entitled to direct that the trustee for the bonds foreclose upon the
aforementioned collateral (with the exception of the common stock of GMGP, Inc.
and Gift Mart Limited Partner, Inc.) at any time after October 2, 1997 relating
to EC Holdings, Inc. and the undeveloped land and after October 2, 1998 for the
limited partnership interest in JPA Shanghai Associates, Ltd., but only if the
bondholders have first exercised their rights to foreclose on the properties
held by EC Holdings, Inc. and the unimproved land.

(8) MORTGAGE LOAN PAYABLE

The mortgage loan payable is secured by a first mortgage on the land,
building, and improvements of the Atlanta Gift Mart, L.P., along with the
Atlanta Gift Mart, L.P.'s interest as lessor in all existing and future leases
of the property. The mortgage loan payable arose from a previous construction
loan payable. This loan was restructured effective August 23, 1991 with an
extension in maturity date to December 30, 1994 and further extended to December
30, 1995 during 1994. Effective October 2, 1995, the construction loan was again
restructured with an extension in maturity date to July 31, 1998. In connection
therewith, the Company incurred an extension fee equal to 1% of the principal
balance outstanding at October 2, 1995, payable in four equal annual
installments. In addition, the mortgage loan payable may be extended for one
additional year if certain performance levels are achieved. The extended loan
bears interest at a floating rate equal to prime rate plus 1% or LIBOR plus 2%
or the Interbank Offered Rate plus 2% at the option of Atlanta Gift Mart, L.P.
At October 2, 1995, the weighted average interest rate on the mortgage loan
balance outstanding approximated 7.73%. Over the term of the mortgage loan, net
cash flows of Atlanta Gift Mart, L.P., as defined, plus payments received by
Atlanta Gift Mart, L.P. on the $730,327 in Antecedent Debt Bonds it holds, must
be applied to reduce the outstanding principal balance of the mortgage loan. The
mortgage loan is partially guaranteed by Portman.

The Atlanta Gift Mart, L.P. has entered into a Rate Cap Transaction
Agreement (Rate Cap Agreement), which defines a guaranteed rate for the payment
of interest on the mortgage loan. This protected

F-10
<PAGE> 94

AMC, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED BALANCE SHEET -- (CONTINUED)

interest rate agreement has an effective term from November 1, 1995 to September
1, 1998. The cost of the Rate Agreement was $397,500, is included in other
assets at October 2, 1995, and will be amortized to interest expense over the
term of the agreement. The Rate Cap Agreement provides for the reimbursement of
interest incurred when the applicable interest rate provided for in the
agreement exceeds the guaranteed interest rate. The notional amount of the Rate
Cap Agreement is $40,000,000 through January 2, 1996, increases to $100,000,000
through January 2, 1997, and decreases to $95,000,000 and $90,000,000 through
January 2, 1998 and September 1, 1998, respectively. A guaranteed interest rate
of 9% was tied to these notional amounts. The counterparty to this Rate Cap
Agreement is considered by management to be a recognized national bank. The
Company does not anticipate a loss resulting from any credit risks associated
with counterparty nonperformance.

Certain covenants, among others, under the mortgage loan agreement require
that Atlanta Gift Mart, L.P. maintain specified quarterly levels of net
operating income and obtain approval from its lenders before making certain
capital expenditures or incurring certain operating costs. The mortgage loan
agreement requires that cash of the Atlanta Gift Mart, L.P. be held by the
lender and restricted for payment of operating expenses and other costs, as
approved by the lender based on monthly funding budgets, and interest and
principal on the mortgage loan.

At October 2, 1995, approximately $1,318,000 incurred in extending the
mortgage loan payable has been deferred and is included in other assets in the
accompanying consolidated balance sheet. These costs are to be amortized over
the remaining term of the mortgage loan payable.

(9) REVOLVING LINE OF CREDIT

The Company has available a revolving line of credit with a commercial bank
in the amount of $10,000,000. Amounts under the line of credit are available to
cover operating shortfalls, capital improvements, debt service on other
outstanding debt, and up to $2,500,000 associated with acquisition and start-up
of new trade shows. The line of credit matures on October 2, 2000 and bears
interest at the prime rate plus 1% or LIBOR plus 2.15% at the Company's option,
payable at specified intervals. In addition, a commitment fee of .5% per annum
on the average daily unused portion of the line is payable quarterly in arrears.
Amounts outstanding under the line of credit are secured by a first lien on the
Atlanta Apparel Mart and the Atlanta Merchandise Mart properties as well as
related assets.

Covenants in the revolving line of credit agreement (1) restrict the
acquisition of assets in excess of $10,000,000 for any fiscal year unless
certain net worth requirements and debt coverage ratios are maintained; (2)
restrict the payment of dividends or other distributions to stockholders; (3)
restrict the incurrence of additional debt; (4) place restrictions on affiliate
transactions, mergers, and disposal of assets; and (5) allow for acceleration of
the amounts outstanding upon a default under this agreement or other debt
agreements.

(10) FAIR VALUE OF FINANCIAL INSTRUMENTS

In accordance with Statement of Financial Accounting Standards No. 107,
"Disclosures about Fair Value of Financial Instruments," the Company is required
to disclose the fair value of financial instruments for which it is practicable
to estimate the value.

The carrying amounts reported in the accompanying consolidated balance
sheet for restricted escrow deposits, tenant, affiliate, and other receivables,
accounts payable, and the revolving line of credit approximate their fair
values.

The Company's notes receivable are from affiliated companies and have been
priced based on agreements between Portman and those affiliates. Accordingly,
the resulting fair value is not separately disclosed as there is no readily
determinable fair value for such transactions between related parties.

F-11
<PAGE> 95

AMC, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED BALANCE SHEET -- (CONTINUED)

The corporate notes payable result from the troubled debt restructuring
discussed in note 1. Accordingly, due to the unique circumstances leading to the
issuance of this debt and since there is no ready market available for this
debt, determination of its fair value is not practicable. The carrying value of
the mortgage loan payable at October 2, 1995 is a representative approximation
of its fair value as it was restructured and extended as of October 2, 1995,
with interest accruing at variable interest rates. The carrying value of the
related interest rate protection agreement approximates fair value.

(11) INCOME TAXES

Differences between accounting rules and tax laws cause differences between
the bases of certain assets and liabilities for financial reporting purposes and
tax purposes. The tax effects of these differences, to the extent that they are
temporary, are recorded as deferred income tax assets and liabilities under SFAS
109. The tax effects of temporary differences that give rise to significant
portions of the deferred income tax assets at October 2, 1995 are presented
below:

<TABLE>
<S> <C>
Deferred income tax assets:
Allowance for doubtful accounts....................................... $ 334,217
Commercial property................................................... 41,030,243
Investment in affiliates.............................................. 3,257,841
Mart bonds............................................................ 24,750,667
Antecedent Debt Bonds................................................. 839,072
-----------
Gross deferred income tax assets................................... 70,212,040
Less valuation allowance.............................................. 44,622,301
-----------
Deferred income tax assets, net............................... $25,589,739
==========
</TABLE>

The valuation allowance for deferred income tax assets as of October 2,
1995 was $44,622,301. In assessing the realizability of deferred income tax
assets, management considers whether it is more likely than not that some
portion or all of the deferred income tax assets will not be realized. The
ultimate realization of deferred income tax assets is dependent upon the
generation of future taxable income during the periods in which those temporary
differences become deductible. Management considers projected future taxable
income and tax planning strategies in making this assessment. Based upon the
projections of future taxable income over the periods in which the temporary
differences resulting in the deferred income tax assets are deductible,
management does not believe it is more likely than not that the Company will
realize the benefits of all of these deductible differences. In particular, the
benefit of the largest deferred income tax asset related to the commercial
property will occur over an extended period of time or upon disposition of the
property, if at all. Accordingly, management has recorded a valuation allowance
against all deferred income tax assets other than those relating to the
corporate notes payable, for which projections of taxable income to be recorded
during the periods in which the related differences reverse are sufficient to
support their realizability. The deferred tax assets relating to the corporate
notes payable result primarily from temporary differences between their book and
tax bases because of the treatment of interest on the corporate notes payable.
As discussed in note 7, due to the troubled debt restructuring, the carrying
value of the Mart Bonds includes the interest payments called for by the
agreements. Accordingly, all future cash payments of interest will be accounted
for as a reduction of the carrying amount of the Mart Bonds, and no interest
expense will be recognized on the Mart Bonds. For tax purposes, the Company will
deduct the interest payments in determining taxable income. Future interest
payments required by the Mart Bonds approximate $65 million during their term.
Projections of pre-tax income of the Company, before considering this interest
expense for tax purposes, during the term of the Mart Bonds exceed the amount of
the future interest payments called for under the agreements.

F-12
<PAGE> 96

AMC, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED BALANCE SHEET -- (CONTINUED)

(12) STOCKHOLDERS' DEFICIT

The following is a summary of the components of the beginning stockholders'
deficit of AMC, Inc. as of October 2, 1995:

<TABLE>
<S> <C>
(Deficit)/equity of predecessor companies:
The Atlanta Apparel Mart............................................ $ (47,015,555)
Atlanta Merchandise Mart, L.P....................................... (77,141,641)
Atlanta Gift Mart, L.P.............................................. (28,955,019)
Atlanta Market Center Management Company, Inc....................... 516,419
Pisa Associates, L.P................................................ 397,153
Investment in Portman Lightfair Associates, L.P..................... 33,796
-------------
(152,164,847)
-------------
Equity issued to The Atlanta Apparel Mart and the Atlanta Merchandise
Mart, L.P. lenders in restructuring of debt (see below)............. 22,090,121
-------------
Assets of other than predecessor companies contributed -- notes
receivable (see note 6)............................................. 4,202,526
-------------
Liabilities of other than predecessor companies assumed:
Antecedent Debt Bonds (see note 7).................................. (7,303,273)
AMM Escrow Bonds (see note 7)....................................... (1,656,007)
-------------
(8,959,280)
-------------
Assets (liabilities) resulting from formation of the Company and
termination of the OCPA (see note 1):
Deferred income taxes............................................... 25,589,739
Accrued closing and other costs..................................... (3,490,436)
Other............................................................... 2,230,889
-------------
24,330,192
-------------
Stockholders' deficit as of October 2, 1995........................... $(110,501,288)
============
</TABLE>

In connection with the formation of the Company, all assets contributed and
liabilities assumed have been recorded at historical cost. The deferred income
tax assets resulting from differing financial statement and tax bases for assets
and liabilities contributed to the Company and the Company's status as a
corporation filing under Subchapter C of the Internal Revenue Code have been
recorded as a component of the capital deficit as such deferred income tax
assets were effectively contributed in the restructuring.

As part of the troubled debt restructuring discussed in notes 1 and 7, the
Company issued 22,090,121 shares of common stock to creditors of The Atlanta
Apparel Mart and the Atlanta Merchandise Mart, L.P. in replacement of
$22,090,121 in principal amount of debt outstanding to such creditors. The
shares of common stock were issued to the creditors on November 17, 1995. This
transaction has been recorded in the accompanying consolidated balance sheet of
AMC, Inc. as of October 2, 1995, the effective date of the restructuring and the
date upon which effective control and the risks and rewards of ownership of the
shares were transferred to the creditors.

In connection with the aforementioned troubled debt restructuring as
discussed in notes 1 and 7, a part of which resulted in the formation of the
Company and the issuance of 62,173,153 shares of common stock, $1 par value per
share, to Portman Holdings, L.P. and certain creditors of Portman and
affiliates, the Company has issued warrants to purchase 29,171,178 additional
shares of Company common stock to Portman and certain shareholders. The warrants
will be exercisable (i) only during such time as the equity value of the Company
(as determined by an independent valuation) equals or exceeds 150% of its equity
value at formation and (ii) only during the five-year period commencing October
2, 1997. The exercise price for each additional share of Company common stock is
$1.

Because the exercisability of the warrants is contingent upon the equity
value of the Company exceeding 150% of its value at the time of formation and at
the present time it cannot be assumed that such condition is likely to occur,
the issuance of the warrants has not been recorded in the Company's financial
statements. In

F-13
<PAGE> 97

AMC, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED BALANCE SHEET -- (CONTINUED)

the event that such condition is met in the future or the Company determines it
is likely to occur, the Company will record the cost of the warrants at such
time. Such cost will be the difference between the per share equity value of the
Company at the date this condition is met and the exercise price of $1 per share
multiplied by the number of warrants then outstanding. Such cost will be
amortized as additional interest cost over the remaining term of the corporate
notes payable or expensed at the time of determination if the corporate notes
payable have matured.

(13) RENTAL REVENUES

The Company is the lessor of showroom space in the Atlanta Merchandise
Mart, Atlanta Gift Mart, and Atlanta Apparel Mart.

Approximate annual future rental payments to be received under existing
noncancelable leases for the next five years and thereafter are summarized
below:

<TABLE>
<S> <C>
Fiscal year ending August 31:
1996.................................................................. $36,253,000
1997.................................................................. 28,176,000
1998.................................................................. 16,205,000
1999.................................................................. 7,014,000
2000.................................................................. 2,774,000
Thereafter............................................................ 459,000
-----------
$90,881,000
==========
</TABLE>

(14) COMMITMENTS

The Company is obligated under various long-term operating leases,
primarily land leases. Approximate commitments under noncancelable long-term
leases for the next five years and thereafter are summarized below:

<TABLE>
<S> <C>
Fiscal year ending August 31:
1996.................................................................. $ 314,000
1997.................................................................. 283,000
1998.................................................................. 283,000
1999.................................................................. 283,000
2000.................................................................. 280,000
Thereafter............................................................ 22,623,000
-----------
$24,066,000
==========
</TABLE>

(15) CONTINGENCIES

The Company and certain affiliates are defendants in various matters of
litigation generally incidental to their business. Although it is difficult to
predict the ultimate outcome of these cases, management believes, based on
discussions with counsel, that any ultimate liability will not materially affect
the consolidated financial position, results of operations, or liquidity of the
Company.

(16) EMPLOYEE RETIREMENT PLANS

Employees of the Company participate in defined contribution retirement
plans that cover substantially all employees over age 21.

F-14
<PAGE> 98

AMC, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEET
FEBRUARY 29, 1996
(UNAUDITED)

<TABLE>
<S> <C>
ASSETS
Current assets:
Cash...................................................................................... $ 1,393,200
Restricted cash........................................................................... 2,274,421
Restricted escrow deposits................................................................ 2,166,111
Current maturities of notes receivable.................................................... 1,050,632
Receivables:
Tenants................................................................................. 4,409,206
Affiliate............................................................................... 778,299
-------------
5,187,505
Less allowance for doubtful receivables................................................. 2,627,841
-------------
Net receivables..................................................................... 2,559,664
-------------
Deferred income taxes..................................................................... 1,851,954
Other assets.............................................................................. 516,038
-------------
Total current assets................................................................ 11,812,020
-------------
Commercial property, at cost................................................................ 316,715,382
Less accumulated depreciation........................................................... 117,232,636
-------------
Net commercial property............................................................. 199,482,746
-------------
Notes receivable, less current maturities................................................... 2,672,542
Deferred income taxes....................................................................... 22,124,785
Other assets................................................................................ 2,066,788
-------------
$ 238,158,881
============
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
Current installments of corporate notes payable:
Mart Bonds interest payments............................................................ $ 12,000,000
AMM Escrow Bonds........................................................................ 1,050,632
-------------
Total current installments of corporate notes payable............................... 13,050,632
-------------
Accounts payable:
Trade and other......................................................................... 2,452,657
Affiliates.............................................................................. 46,045
-------------
Total accounts payable.............................................................. 2,498,702
-------------
Accrued property taxes.................................................................... 531,977
Accrued interest payable.................................................................. 665,274
Deferred revenue.......................................................................... 3,124,881
Accrued closing and other costs........................................................... 902,729
-------------
Total current liabilities........................................................... 20,774,195
-------------
Corporate notes payable, excluding current installments:
Mart Bonds (face amount of $160,000,000).................................................. 209,200,000
AMM Escrow Bonds.......................................................................... 66,492
Antecedent Debt Bonds..................................................................... 7,303,273
-------------
Total corporate notes payable, excluding current installments....................... 216,569,765
-------------
Mortgage loan payable..................................................................... 105,702,222
Security deposits......................................................................... 2,432,806
Accrued loan extension fees, excluding current installments............................... 536,410
-------------
Total liabilities................................................................... 346,015,398
-------------
Stockholders' equity (deficit):
Common stock -- $1 par value; 100,000,000 shares authorized and 62,173,153 shares issued
and outstanding......................................................................... 62,173,153
Capital deficit........................................................................... (172,660,874)
Retained earnings since formation......................................................... 2,631,204
-------------
Total stockholders' deficit......................................................... (107,856,517)
-------------
$ 238,158,881
============
</TABLE>

See accompanying notes to consolidated financial statements.

F-15
<PAGE> 99

AMC, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF OPERATIONS AND RETAINED EARNINGS
FOR THE PERIOD FROM OCTOBER 2, 1995 THROUGH FEBRUARY 29, 1996

ATLANTA MARKET CENTER COMPANIES (NOTE 1)

COMBINED STATEMENT OF OPERATIONS
FOR THE PERIOD FROM OCTOBER 1, 1994 THROUGH FEBRUARY 28, 1995

(UNAUDITED)

<TABLE>
<CAPTION>
OCTOBER 2, 1995 OCTOBER 1, 1994
THROUGH THROUGH
FEBRUARY 29, 1996 FEBRUARY 28, 1995
------------------ ------------------
<S> <C> <C>
Revenues (note 2):
Rental............................................. $ 19,832,626 $ 19,200,104
Trade shows........................................ 7,311,154 6,960,181
Other revenues..................................... 1,789,643 1,912,199
------------ ------------
Total revenues............................. 28,933,423 28,072,484
------------ ------------
Operating expenses:
Building operations................................ 3,770,890 3,738,213
Trade shows........................................ 1,593,095 1,046,102
Marketing.......................................... 1,748,226 2,053,275
General and administrative......................... 6,114,035 6,183,069
Bad debt expense................................... 656,408 136,756
Property taxes..................................... 1,841,527 1,975,664
Depreciation and amortization...................... 5,568,782 6,016,806
------------ ------------
Total operating expenses................... 21,292,963 21,149,885
------------ ------------
Operating income........................... 7,640,460 6,922,599
------------ ------------
Other (income) expenses:
Interest expense................................... 3,553,258 13,041,835
Interest income.................................... (190,798) (175,181)
Loss from investment in affiliates................. 33,796 186,504
------------ ------------
Total other expenses, net.................. 3,396,256 13,053,158
------------ ------------
Income (loss) before income taxes.......... 4,244,204 (6,130,559)
Deferred income tax expense.......................... 1,613,000 --
------------ ------------
Net income (loss).......................... 2,631,204 $ (6,130,559)
============
Retained earnings at beginning of period............. --
------------
Retained earnings at end of period................... $ 2,631,204
============
Net income per share -- primary (note 3)............. $ .04
============
Net income per share -- fully diluted (note 3)....... $ .04
============
</TABLE>

See accompanying notes to consolidated financial statements.

F-16
<PAGE> 100

AMC, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF OPERATIONS AND RETAINED EARNINGS
FOR THE THREE-MONTH PERIOD ENDED FEBRUARY 29, 1996

ATLANTA MARKET CENTER COMPANIES (NOTE 1)

COMBINED STATEMENT OF OPERATIONS
FOR THE THREE-MONTH PERIOD ENDED FEBRUARY 28, 1995

(UNAUDITED)

<TABLE>
<CAPTION>
THREE MONTHS THREE MONTHS
ENDED ENDED
FEBRUARY 29, 1996 FEBRUARY 28, 1995
----------------- -----------------
<S> <C> <C>
Revenues:
Rental....................................................... $12,051,117 $11,661,440
Trade shows.................................................. 6,668,993 6,266,121
Other revenues............................................... 1,425,875 1,293,312
----------- -----------
Total revenues....................................... 20,145,985 19,220,873
----------- -----------
Operating expenses:
Building operations.......................................... 2,469,871 2,321,162
Trade shows.................................................. 1,277,654 724,662
Marketing.................................................... 1,043,148 1,726,528
General and administrative................................... 4,121,774 3,997,812
Bad debt expense............................................. 592,424 101,052
Property taxes............................................... 1,147,966 1,027,004
Depreciation and amortization................................ 3,323,199 3,521,265
----------- -----------
Total operating expenses............................. 13,976,036 13,419,485
----------- -----------
Operating income..................................... 6,169,949 5,801,388
----------- -----------
Other (income) expenses:
Interest expense............................................. 2,109,245 8,063,558
Interest income.............................................. (122,346) (101,501)
Loss from investment in affiliates........................... 9,216 62,168
----------- -----------
Total other expenses, net............................ 1,996,115 8,024,225
----------- -----------
Income (loss) before income taxes.................... 4,173,834 (2,222,837)
Deferred income tax expense.................................... 1,586,000 --
----------- -----------
Net income (loss).................................... 2,587,834 $(2,222,837)
===========
Retained earnings at beginning of period....................... 43,370
-----------
Retained earnings at end of period............................. $ 2,631,204
===========
Net income per share -- primary (note 3)....................... $ .04
===========
Net income per share -- fully diluted (note 3)................. $ .04
===========
</TABLE>

See accompanying notes to consolidated financial statements.

F-17
<PAGE> 101

AMC, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE PERIOD FROM OCTOBER 2, 1995 THROUGH FEBRUARY 29, 1996

ATLANTA MARKET CENTER COMPANIES (NOTE 1)

COMBINED STATEMENT OF CASH FLOWS
FOR THE PERIOD FROM OCTOBER 1, 1994 THROUGH FEBRUARY 28, 1995

(UNAUDITED)

<TABLE>
<CAPTION>
OCTOBER 2, 1995 OCTOBER 1, 1994
THROUGH THROUGH
FEBRUARY 29, 1996 FEBRUARY 28, 1995
----------------- -----------------
<S> <C> <C>
Net income (loss).............................................. $ 2,631,204 $(6,130,559)
Adjustments to reconcile net income (loss) to net cash provided
by operating activities:
Depreciation and amortization................................ 5,568,782 6,016,806
Loss from investment in affiliates........................... 33,796 186,504
Deferred income tax expense.................................. 1,613,000 --
Decrease in net receivables.................................. 35,098 484,894
Decrease in prepaid expenses and other assets................ 1,071,178 122,520
(Decrease) increase in accrued interest payable.............. (2,602,982) 9,455,443
Decrease in accounts payable, affiliate payables and other
accrued expenses.......................................... (3,981,114) (871,215)
Increase in deferred revenue................................. 778,862 547,946
----------- -----------
Net cash provided by operating activities............ 5,147,824 9,812,339
----------- -----------
Cash flows from investing activities:
Additions to commercial property............................. (3,684,740) (6,128,717)
Decrease in restricted cash.................................. 266,733 --
----------- -----------
Net cash used in investing activities................ (3,418,007) (6,128,717)
----------- -----------
Cash flows from financing activities:
Decrease in restricted escrow deposits....................... 2,599,342 298,871
Payments received from notes receivable...................... 479,352 --
Principal payments of AMM Escrow Bonds....................... (525,316) --
Mart Bond payments........................................... (3,000,000) --
Principal repayments of mortgage loan........................ (1,579,787) (3,378,353)
------------ -----------
Net cash used in financing activities................ (1,759,676) (3,079,482)
------------ -----------
(Decrease) increase in cash.......................... (296,592) 604,140
Cash at beginning of period.................................... 1,689,792 3,260,186
------------ -----------
Cash at end of period.......................................... $ 1,393,200 $ 3,864,326
============ ===========
Noncash financing activities:
Prepaid interest applied against Mart Bonds.................. $ 933,334 $ --
============ ===========
Principal repayment on AMM Escrow Bonds through contribution
from stockholder.......................................... $ 13,567 $ --
============ ===========
Supplemental disclosure -- cash paid during the period for
interest..................................................... $ 9,156,240 $ 3,970,586
============ ===========
</TABLE>

See accompanying notes to consolidated financial statements.

F-18
<PAGE> 102

AMC, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FEBRUARY 29, 1996
(UNAUDITED)

(1) BASIS OF PRESENTATION

The accompanying financial statements reflect the consolidated accounts of
AMC, Inc. and subsidiaries (the "Company") for periods beginning on or after
October 2, 1995 and the combined accounts of the Atlanta Market Center Companies
(the predecessor companies of AMC, Inc.) for earlier periods reported. The
financial statements as of February 29, 1996 and for the periods from October 2,
1995 through February 29, 1996, and from October 1, 1994 through February 28,
1995 and for the three-month periods ended February 29, 1996 and February 28,
1995 are unaudited; however, in the opinion of management, all adjustments,
consisting of normal recurring accruals, necessary for a fair presentation of
the financial position at February 29, 1996; the results of operations for the
period from October 2, 1995 through February 29, 1996, the period from October
1, 1994 through February 28, 1995, and for the three-month periods ended
February 29, 1996 and February 28, 1995; and the cash flows for the period from
October 2, 1995 through February 29, 1996 and the period from October 1, 1994
through February 28, 1995 have been included.

(2) REVENUE RECOGNITION

Rental revenues are recorded monthly based on amounts billed to tenants.
The leases with the Company's tenants generally require equal monthly rents. The
effects of not recording rental income on a straight-line basis for leases that
contain variable payment amounts during the terms of the leases does not result
in significant impact to the Company's consolidated financial statements.

Trade show revenues are generally collected in advance and initially
recorded as deferred revenue. Trade show revenues are recognized in the month
the related show occurs.

Management fee revenues are recorded as earned in accordance with the
related management agreements.

(3) MARKETING COSTS

The Company incurs costs for various marketing and advertising efforts. All
costs related to marketing and advertising are expensed in the period incurred
or, if directly related to specific trade shows, are expensed in the month the
related show occurs.

(4) INCOME PER SHARE

Weighted average shares outstanding for the period from October 2, 1995
through February 29, 1996 and for the three-month period ended February 29, 1996
were 62,173,153. Primary net income per share has been calculated assuming no
common stock equivalents resulting from outstanding warrants since such warrants
are exercisable only upon certain conditions and such conditions have not yet
occurred. Even though the exercise price for the warrants is equal to the
assumed market price for a share of AMC, Inc. common stock, as a result of total
warrants exceeding 20% of current outstanding shares, fully diluted net income
per share has been calculated assuming 16,736,548 additional shares issuable and
outstanding and assuming earnings increases of approximately $342,000 and
$205,000 for the period from October 2, 1995 through February 29, 1996 and the
three months ended February 29, 1996, respectively. Such assumed earnings
increases have been determined using a tax-effected interest rate of 4.9%,
applied to the proceeds that would have been received from the additional
16,736,548 shares assumed to be issued.

F-19
<PAGE> 103

AMC, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FEBRUARY 29, 1996 -- (CONTINUED)
(UNAUDITED)

(5) AFFILIATE RECEIVABLES

Subsequent to October 2, 1995, the Company has written off a receivable
from Portman Apparel Associates, L.P. There was no impact to the consolidated
financial statements resulting from such write-off as this affiliate receivable
had previously been fully reserved.

F-20
<PAGE> 104

INDEPENDENT AUDITORS' REPORT

The Partners and Stockholders
The Atlanta Market Center Companies:

We have audited the accompanying combined balance sheets of the Atlanta
Market Center Companies as of October 1, 1995 and December 31, 1994 and 1993,
and the related combined statements of operations, equity (deficit), and cash
flows for the period from January 1, 1995 through October 1, 1995 and for each
of the years in the three-year period ended December 31, 1994. These combined
financial statements are the responsibility of the Atlanta Market Center
Companies' management. Our responsibility is to express an opinion on these
combined financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

As discussed in note 1, effective October 2, 1995 certain debt of the
Atlanta Market Center Companies was forgiven by the lenders and the assets,
remaining liabilities, and businesses of the Atlanta Market Center Companies
were contributed to AMC, Inc., a corporation formed principally for the purpose
of operating the businesses of the companies, in connection with a restructuring
of their indebtedness. Under the terms of the restructuring, certain lenders of
the Atlanta Market Center Companies received equity in AMC, Inc. and corporate
notes of AMC, Inc. that mature on July 31, 2000, in exchange for existing
indebtedness. A gain of $67,995,635 resulting from the restructuring of debt has
been recorded as of October 1, 1995, the last date of operations for the
previously separate companies to which the gain relates.

In our opinion, the combined financial statements referred to above present
fairly, in all material respects, the financial position of the Atlanta Market
Center Companies as of October 1, 1995 and December 31, 1994 and 1993, and the
results of their operations and their cash flows for the period from January 1,
1995 through October 1, 1995 and for each of the years in the three-year period
ended December 31, 1994, in conformity with generally accepted accounting
principles.

KPMG PEAT MARWICK LLP

Atlanta, Georgia
December 8, 1995

F-21
<PAGE> 105

ATLANTA MARKET CENTER COMPANIES

COMBINED BALANCE SHEETS
OCTOBER 1, 1995 AND DECEMBER 31, 1994 AND 1993

<TABLE>
<CAPTION>
1995 1994 1993
------------- ------------- -------------
<S> <C> <C> <C>
ASSETS
Cash.............................................. $ 1,689,792 $ 1,149,864 $ 2,144,944
Restricted cash (note 6).......................... 2,541,154 2,202,378 2,657,422
Restricted escrow deposits (note 6)............... 4,443,256 1,719,890 1,213,194
Working capital advances to affiliate (note 3).... -- -- 1,145,386
Cash management advances to affiliate (note 3).... -- -- 592,273
OCPA cash management advances to affiliate (note
3).............................................. 236,593 202,052 409,672
Receivables:
Tenants......................................... 3,746,094 3,358,660 3,162,215
Affiliates (note 3)............................. 1,132,274 463,012 1,234,967
Accrued interest from affiliate (note 3)........ -- -- 397,303
Other........................................... 43,703 463,457 494,770
------------- ------------- -------------
4,922,071 4,285,129 5,289,255
Less allowance for doubtful receivables......... 2,647,816 2,428,372 2,549,441
------------- ------------- -------------
Net receivables......................... 2,274,255 1,856,757 2,739,814
------------- ------------- -------------
Commercial property, at cost (notes 5 and 6)...... 313,001,013 306,823,925 295,547,816
Less accumulated depreciation................... 112,112,403 102,656,637 90,596,480
------------- ------------- -------------
Net commercial rental property.......... 200,888,610 204,167,288 204,951,336
------------- ------------- -------------
Investment in affiliates (note 4)................. 33,796 46,707 23,439
Prepaid interest.................................. 933,334 -- --
Other assets...................................... 2,307,404 2,330,015 4,025,176
------------- ------------- -------------
$ 215,348,194 $ 213,674,951 $ 219,902,656
============= ============= =============
LIABILITIES AND EQUITY (DEFICIT)
Liabilities:
Mortgage loans payable (notes 1, 6 and 13)...... $ 354,505,464 $ 407,531,714 $ 410,540,677
Working capital notes payable (note 3).......... -- -- 1,145,386
Interest-bearing advances from affiliate (note
3)........................................... -- 12,048,000 12,048,000
Accounts payable:
Trade and other.............................. 7,189,669 5,644,029 3,950,353
Affiliates (note 3).......................... 203,633 145,370 119,032
------------- ------------- -------------
Total accounts payable.................. 7,393,302 5,789,399 4,069,385
------------- ------------- -------------
Accrued interest payable -- affiliate (note
3)........................................... -- 6,644,226 5,176,861
Other accrued interest payable.................. 3,268,256 6,643,313 1,147,245
Deferred revenue................................ 2,346,019 6,033,717 5,984,801
------------- ------------- -------------
Total liabilities....................... 367,513,041 444,690,369 440,112,355
------------- ------------- -------------
Equity (deficit) -- (notes 1, 7 and 13):
Stockholder's equity:
Common stock................................. 1,500 1,500 1,500
Retained earnings............................ 548,715 330,389 257,023
------------- ------------- -------------
Total stockholder's equity.............. 550,215 331,889 258,523
Partners' deficit............................... (152,715,062) (231,347,307) (220,468,222)
------------- ------------- -------------
Total deficit........................... (152,164,847) (231,015,418) (220,209,699)
Commitments and contingencies (notes 11 and 12)
------------- ------------- -------------
$ 215,348,194 $ 213,674,951 $ 219,902,656
============= ============= =============
</TABLE>

See accompanying notes to combined financial statements.

F-22
<PAGE> 106

ATLANTA MARKET CENTER COMPANIES

COMBINED STATEMENTS OF OPERATIONS
FOR THE PERIOD FROM JANUARY 1, 1995 THROUGH OCTOBER 1, 1995
AND FOR THE YEARS ENDED DECEMBER 31, 1994, 1993, AND 1992

<TABLE>
<CAPTION>
1995 1994 1993 1992
----------- ------------ ------------ ------------
<S> <C> <C> <C> <C>
Revenues:
Rental (note 10)....................... $35,706,832 $ 44,949,775 $ 44,509,567 $ 45,477,067
Trade shows............................ 14,661,566 14,619,351 14,429,730 12,687,321
Other revenues (note 2(e))............. 4,471,882 4,632,329 4,237,472 3,765,638
----------- ------------ ------------ ------------
Total revenues................. 54,840,280 64,201,455 63,176,769 61,930,026
----------- ------------ ------------ ------------
Operating expenses:
Building operations (note 11).......... 8,555,835 10,738,706 10,326,085 10,611,336
Trade shows............................ 2,994,067 3,602,680 3,921,937 3,183,066
Marketing.............................. 5,649,206 6,968,250 5,282,815 5,948,206
General and administrative............. 8,769,884 9,484,123 9,023,770 7,573,171
Bad debt expense....................... 667,830 1,182,613 755,312 1,745,542
Property taxes......................... 2,487,036 5,701,646 5,895,049 5,715,211
Depreciation and amortization.......... 9,549,041 13,526,586 14,471,493 12,811,305
----------- ------------ ------------ ------------
Total operating expenses....... 38,672,899 51,204,604 49,676,461 47,587,837
----------- ------------ ------------ ------------
Operating income............... 16,167,381 12,996,851 13,500,308 14,342,189
----------- ------------ ------------ ------------
Other (income) expenses:
Interest expense -- affiliated
indebtedness (note 3)............... 1,433,437 1,467,365 1,281,900 1,386,857
Interest expense -- other indebtedness
(note 6)............................ 24,126,266 24,478,396 22,735,845 27,453,061
Interest income (note 3)............... (350,049) (493,010) (665,602) (910,296)
(Earnings) loss from investment in
affiliates (note 4)................. (89,985) 457,362 (79,251) (28,791)
Other.................................. 241,511 408,840 435,629 524,074
----------- ------------ ------------ ------------
Total other expenses, net...... 25,361,180 26,318,953 23,708,521 28,424,905
----------- ------------ ------------ ------------
Loss before extraordinary
item......................... (9,193,799) (13,322,102) (10,208,213) (14,082,716)
Extraordinary item -- gain on debt
restructuring (notes 1 and 6).......... 67,995,635 -- -- --
----------- ------------ ------------ ------------
Net income (loss).............. $58,801,836 $(13,322,102) $(10,208,213) $(14,082,716)
========== =========== =========== ===========
</TABLE>

See accompanying notes to combined financial statements.

F-23
<PAGE> 107

ATLANTA MARKET CENTER COMPANIES

COMBINED STATEMENTS OF EQUITY (DEFICIT)
FOR THE PERIOD FROM JANUARY 1, 1995 THROUGH OCTOBER 1, 1995
AND FOR THE YEARS ENDED DECEMBER 31, 1994, 1993, AND 1992

<TABLE>
<CAPTION>
TOTAL
COMMON RETAINED STOCKHOLDER'S PARTNERS'
STOCK EARNINGS EQUITY DEFICIT TOTAL
------ ----------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
Balance at December 31, 1991.... $1,500 $ 1,351,235 $ 1,352,735 $(192,376,695) $(191,023,960)
Net income (loss)............... -- 1,444,349 1,444,349 (15,527,065) (14,082,716)
Interest on capital contribution
receivable from partner
(note 3)...................... -- -- -- (333,393) (333,393)
Distributions to stockholder
(note 3)...................... -- (2,526,088) (2,526,088) -- (2,526,088)
------ ----------- ------------- ------------- -------------
Balance at December 31, 1992.... 1,500 269,496 270,996 (208,237,153) (207,966,157)
Net income (loss)............... -- 1,681,175 1,681,175 (11,889,388) (10,208,213)
Interest on capital contribution
receivable from partner
(note 3)...................... -- -- -- (341,681) (341,681)
Distributions to stockholder
(note 3)...................... -- (1,693,648) (1,693,648) -- (1,693,648)
------ ----------- ------------- ------------- -------------
Balance at December 31, 1993.... 1,500 257,023 258,523 (220,468,222) (220,209,699)
Net income (loss)............... -- 1,150,397 1,150,397 (14,472,499) (13,322,102)
Contributions (note 3).......... -- -- -- 3,863,618 3,863,618
Interest on capital contribution
receivable from partner
(note 3)...................... -- -- -- (270,204) (270,204)
Distributions to stockholder
(note 3)...................... -- (1,077,031) (1,077,031) -- (1,077,031)
------ ----------- ------------- ------------- -------------
Balance at December 31, 1994.... 1,500 330,389 331,889 (231,347,307) (231,015,418)
Net income...................... -- 321,222 321,222 58,480,614 58,801,836
Contribution of capital through
forgiveness of debt
(note 3)...................... -- -- -- 20,125,663 20,125,663
Contributions (note 3).......... -- -- -- 103,534 103,534
Interest on capital contribution
receivable from partner
(note 3)...................... -- -- -- (77,566) (77,566)
Distributions to stockholder
(note 3)...................... -- (102,896) (102,896) -- (102,896)
------ ----------- ------------- ------------- -------------
Balance at October 1, 1995...... $1,500 $ 548,715 $ 550,215 $(152,715,062) $(152,164,847)
====== ========== ========== ============ ============
</TABLE>

See accompanying notes to combined financial statements.

F-24
<PAGE> 108

ATLANTA MARKET CENTER COMPANIES

COMBINED STATEMENTS OF CASH FLOWS
FOR THE PERIOD FROM JANUARY 1, 1995 THROUGH OCTOBER 1, 1995
AND FOR THE YEARS ENDED DECEMBER 31, 1994, 1993, AND 1992

<TABLE>
<CAPTION>
1995 1994 1993 1992
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Cash flows from operating activities:
Net income (loss)............................... $ 58,801,836 $(13,322,102) $(10,208,213) $(14,082,716)
Adjustments to reconcile net income (loss) to
net cash provided by operating activities:
Extraordinary item -- gain on debt
restructuring............................ (67,995,635) -- -- --
Amortization of protected interest rate
agreement................................ 587,067 1,067,248 1,065,114 335,571
Depreciation and other amortization......... 9,769,445 13,821,265 14,766,172 13,302,437
(Earnings) loss from investment in
affiliates............................... (89,985) 457,362 (79,251) (28,791)
Loss on disposal of assets.................. -- -- 6,794 2,617
(Increase) decrease in net receivables...... (417,498) 883,057 1,338,432 130,001
Increase in other assets.................... (878,135) (378,589) (12,231) (196,637)
Increase (decrease) in accounts payable..... 1,603,903 1,720,014 (1,169,711) (175,027)
Increase in accrued interest payable........ 8,548,149 6,963,433 874,822 1,131,649
Increase in unpaid interest added to
mortgage loan payable.................... 6,471,907 5,321,236 1,710,195 1,591,904
(Decrease) increase in deferred revenue..... (3,687,698) 48,916 752,814 587,585
Increase in accrued interest on contribution
receivable from partner.................. (77,566) (270,204) (341,681) (333,393)
------------ ------------ ------------ ------------
Net cash provided by operating
activities............................. 12,635,790 16,311,636 8,703,256 2,265,200
------------ ------------ ------------ ------------
Cash flows from investing activities:
(Increase) decrease in restricted cash.......... (338,776) 455,044 (354,214) (2,303,208)
Investment in joint venture..................... -- (559,516) -- --
Additions to commercial property................ (6,177,088) (12,030,716) (4,293,783) (10,601,716)
(Increase) decrease in cash management advances
to affiliate.................................. (34,541) 799,893 989,102 801,547
------------ ------------ ------------ ------------
Net cash used in investing activities.... (6,550,405) (11,335,295) (3,658,895) (12,103,377)
------------ ------------ ------------ ------------
Cash flows from financing activities:
Partner contributions........................... 103,534 3,863,618 -- --
Principal repayments of mortgage loan........... (3,232,357) (8,330,199) (5,263,362) --
Proceeds from mortgage loan payable............. 306,732 -- -- 13,062,175
(Increase) decrease in restricted escrow
deposits, net of deposits used to reduce the
mortgage loan
payable....................................... (2,723,366) (506,696) 894,994 (520,945)
Distributions to stockholder.................... -- (998,144) (1,615,067) (2,526,088)
------------ ------------ ------------ ------------
Net cash (used in) provided by financing
activities............................. (5,545,457) (5,971,421) (5,983,435) 10,015,142
------------ ------------ ------------ ------------
Increase (decrease) in cash.............. 539,928 (995,080) (939,074) 176,965
Cash at beginning of period....................... 1,149,864 2,144,944 3,084,018 2,907,053
------------ ------------ ------------ ------------
Cash at end of period............................. $ 1,689,792 $ 1,149,864 $ 2,144,944 $ 3,084,018
============= ============= ============= =============
Supplemental disclosure of cash flow
information -- cash paid during the year for
interest........................................ $ 9,952,580 $ 12,593,844 $ 20,367,614 $ 25,780,794
============= ============= ============= =============
Supplemental disclosure of noncash investing and
financing activities:
Decrease in working capital advances to
affiliate through repayment of working
capital notes
payable..................................... $ -- $ 1,145,386 $ 606,567 $ 34,407
============= ============= ============= =============
Contribution of capital through forgiveness of
interest-bearing advances from affiliate,
inclusive of accrued interest of $8,077,663
(note 3).................................... $ 20,125,663 $ -- $ -- $ --
============= ============= ============= =============
</TABLE>

See accompanying notes to combined financial statements.

F-25
<PAGE> 109

ATLANTA MARKET CENTER COMPANIES

NOTES TO COMBINED FINANCIAL STATEMENTS
OCTOBER 1, 1995 AND DECEMBER 31, 1994 AND 1993

(1) ORGANIZATION, BUSINESS, AND BASIS OF PRESENTATION

The Atlanta Market Center Companies (AMC) represent a combination of
businesses which principally own and manage trade marts, trade shows, special
events, and consumer shows and activities reasonably related thereto. Included
in the Atlanta Market Center Companies are The Atlanta Apparel Mart (AAM) -- (a
limited partnership); Atlanta Merchandise Mart, L.P. (AMM) -- (a limited
partnership); Atlanta Gift Mart, L.P. (AGM) -- (a limited partnership); and
Atlanta Market Center Management Company, Inc. (AMCMC) -- (an S Corporation).

AMC is controlled by John C. Portman, Jr. (Portman) who is a general
partner in each of the partnerships and the sole stockholder of AMCMC. Other
partnership interests in AAM, AMM, and AGM are owned by Portman or by Portman
affiliates. AAM, AMM, and AGM are collectively referred to as "the Marts."

AMC owns and operates three buildings in Atlanta, Georgia which contain
permanent showroom space as well as exhibitor space used during trade shows.

AMCMC provides leasing, management, and trade show development services to
the Marts and trade shows operated by Portman and affiliates and, to a lesser
extent, trade show management services to third-party trade shows.

In addition to the Marts and AMCMC, included in AMC is Portman's indirect
ownership interest in Lightfair International Associates (see note 4) and EC
Holdings, Inc. Lightfair International Associates is a New York general
partnership which manages an annual trade show featuring commercial lighting
products and services for professionals involved in design, planning,
maintenance and/or construction industries. EC Holdings, Inc. consists of two
mixed-use complexes in San Francisco's financial district, Embarcadero Center
and Embarcadero Center West. Embarcadero Center is comprised of four office
buildings, a retail mall, and a hotel. The adjacent Embarcadero Center West is
comprised of two office buildings and a hotel. Portman's interest in EC
Holdings, Inc. has no carrying value at October 1, 1995 and December 31, 1994
and 1993.

Also, included in AMC is Pisa Associates, L.P. (Pisa) which owns and
maintains a 14,460 square foot parcel of unimproved property, used for surface
parking, located near the Marts in Atlanta, Georgia.

In 1991, Portman, Portman Properties (a proprietorship of Portman), and
certain other affiliates, including those owning the assets and businesses
discussed above, restructured substantially all of their then existing
indebtedness under an Override and Collateral Pool Agreement (OCPA). Portman and
certain affiliates subsequently defaulted on several provisions of the OCPA.

Effective October 2, 1995, Portman and certain affiliates entered into
agreements with lenders that resulted in termination of the OCPA, forgiveness of
certain indebtedness, and restructure of remaining indebtedness. Following the
forgiveness and the restructuring of certain debt, an affiliate and certain
creditors of Portman have contributed the remaining net assets of AAM, AMM, AGM,
AMCMC, Pisa, an indirect ownership in Lightfair International Associates and EC
Holdings, Inc., and certain notes receivable to AMC, Inc., a Georgia corporation
formed principally for the purpose of operating the businesses comprising AMC
(also see note 13). Because the last date of operations for the former AAM and
AMM partnerships was October 1, 1995, the resulting gain on restructuring of
debt has been recorded in the accompanying combined financial statements as of
October 1, 1995.

The aforementioned debt restructuring has been accounted for as a troubled
debt restructuring in accordance with Statement of Financial Accounting
Standards No. 15, "Accounting by Debtors and Creditors for Troubled Debt
Restructurings" (SFAS 15).

F-26
<PAGE> 110

ATLANTA MARKET CENTER COMPANIES

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

All significant intercompany accounts and transactions have been eliminated
in the combined financial statements.

(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a) Method of Accounting

The accompanying combined financial statements have been prepared on the
accrual basis of accounting. No provision for income taxes is made because any
liability for income taxes is that of Portman and the other partners of the
Marts.

(b) Receivables

AMC's receivables primarily relate to billings to tenants who lease space
in the Marts and billings to affiliates for services and reimbursable expenses.
AMC generally provides for losses on tenant receivables that are more than 60
days delinquent. Provisions for losses on affiliate receivables are recorded
based on specific analysis of the affiliate's ability to pay.

Commercial property is carried at cost and is depreciated using
straight-line and accelerated methods over the estimated useful lives of the
assets as follows:

Management at least annually evaluates its commercial property and other
assets for impairment. In making such evaluation, management uses independent
appraisals, cash flow analyses, and other relevant information to determine if
the carrying value of the assets are recoverable. For any asset for which the
carrying value is not considered to be recoverable, an impairment loss would be
recognized by a write-down of the asset to its fair value. AMC has not
experienced any significant impairment losses.

(d) Trade Show Revenue and Expense

Trade show revenues are generally collected in advance and initially
recorded as deferred revenue. Trade show revenues are recognized in the month
the related show occurs. Direct costs of trade shows, including salary and
administrative costs, are capitalized as prepaid expense and recognized in the
month the related trade show occurs.

(e) Leasing Commissions and Management Fees

AMCMC recognizes leasing and management fee income in accordance with the
terms of its management agreements. AMCMC has entered into management agreements
with certain affiliates: Portman Apparel Associates, L.P.; CGS Associates, L.P.;
AMC Orlando, Inc.; AMC Tampa, Inc.; and an unrelated party, Inforum Associates.

Under the terms of the agreements with Portman Apparel Associates, L.P.,
AMC Tampa, Inc., and AMC Orlando, Inc., AMCMC earns a management fee equal to 3%
of the managed company's gross revenue, as defined. Under the terms of the
agreement with CGS Associates, L.P., AMCMC earns a management fee equal to 1.5%
of gross revenues, as defined. AMCMC earns a procurement fee during the initial
term of the leases procured for Portman Apparel Associates, L.P. equal to the
first month's base rent. In addition, AMCMC earns a lease commission of 5% of
all rent collected thereafter during the initial term of the lease. For renewals
and extensions, leasing commissions equal to 3% of all rent collected are earned
during the renewal or extension period. In the event a tenant leases additional
space, commissions are earned as if a new lease were being executed for the
additional space leased. Procurement fees are paid when the first month's

F-27
<PAGE> 111

ATLANTA MARKET CENTER COMPANIES

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

rent is collected; additional lease commissions are paid monthly during the
lease term. Procurement fees and additional lease commissions are recognized as
revenue when received. AMCMC only receives leasing commissions determined in
accordance with the foregoing from Portman Apparel Associates, L.P. if such
leasing commissions exceed leasing costs, as defined. Otherwise, AMCMC receives
an amount equal to the leasing costs.

Under the terms of the agreement with Inforum Associates for the year ended
December 31, 1992, AMCMC earned a management fee equal to 4% of Inforum
Associates' gross revenue, as defined. Effective November 1, 1992, this
agreement was extended, but only as it pertained to the management of the
convention facilities and food service contractor of the Inforum facility. Under
the terms of the January 1, 1993 agreement, AMCMC only manages the convention
facilities and food service contractor and receives as a management fee 40% of
the combined net cash flow (as defined) of the convention facilities and food
service operations.

AMCMC earned approximately $584,000, $783,000, $898,000, and $910,000 in
leasing commissions and management fees for the 274-day period ended October 1,
1995 and for the years ended December 31, 1994, 1993, and 1992, respectively.

(f) Marketing Costs

AMC incurs costs for various marketing and advertising efforts. All costs
related to marketing and advertising are expensed in the period incurred or if
directly related to specific trade shows are expensed in the month the related
show occurs.

(g) Recently Issued Accounting Pronouncements

In March 1995, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 121, "Accounting for the Impairment of
Long-Lived Assets and for Long-lived Assets to be Disposed Of" ("SFAS 121")
which is effective for fiscal years beginning after December 15, 1995. This
statement requires that long-lived assets that are to be held and used by an
entity be reviewed for impairment whenever events or changes in circumstances
indicate that the carrying amount of any such asset may not be recoverable. In
the event that facts and circumstances indicate that the carrying value of
long-lived assets may be impaired, an evaluation of their recoverability would
be performed and any resulting impairment loss recorded. The implementation of
SFAS 121 is not expected to materially impact AMC's financial position or
results of operations because AMC periodically evaluates its commercial property
and other assets for impairment using independent appraisals, cash flow
analyses, and other relevant information. AMC has not experienced any
significant impairment losses.

In October 1995, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 123, "Accounting for Stock-Based
Compensation" which is effective for fiscal years beginning after December 15,
1995. This standard defines a fair value-based method of measuring employee
stock options or similar equity instruments. In lieu of recording the value of
such options as compensation expense, companies may provide pro forma
disclosures quantifying the difference between compensation cost included in net
income as prescribed by current accounting standards and the related cost
measured by such fair value-based method. AMC currently does not have any
stock-based employee compensation plans or any outstanding equity instrument to
which this standard relates.

F-28
<PAGE> 112

ATLANTA MARKET CENTER COMPANIES

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

(3) TRANSACTIONS WITH AFFILIATES

Transactions with affiliates are summarized as follows:

(a) Working Capital Notes Payable/Working Capital Advances to
Affiliate and OCPA Cash Management Advances to Affiliate

Working capital notes payable represent amounts loaned to AMM, AAM,
and AGM in connection with the OCPA (see note 1). The proceeds of these
notes payable were immediately loaned to Portman Properties by AMM, AAM,
and AGM as working capital advances. The working capital notes payable
and working capital advances both bear interest at the prime rate plus
1%. As of December 31, 1994, the working capital advances had been
collected and the working capital notes payable had been repaid.

Cash management advances to affiliate relate to the investment of
excess cash through a cash management system maintained by Portman
Properties prior to 1992. These advances from AAM and AMM earned
interest at the prime rate. As of December 31, 1994, the cash management
advances from AAM and AMM had been collected.

Interest income earned on the working capital and cash management
advances was approximately $42,500, $163,000, and $375,500 during the
years ended December 31, 1994, 1993, and 1992, respectively.

The OCPA cash management advances relate to amounts advanced from
AMCMC to Portman Properties under the OCPA and are noninterest-bearing.
Under the provisions of the OCPA, these advances, net of outstanding
checks, were distributed to Portman, AMCMC's sole stockholder, from time
to time and charged to retained earnings. AMCMC made total distributions
in the amounts of $998,144, $1,615,067, and $2,526,088 in 1994, 1993,
and 1992, respectively.

(b) Accounts Receivable

Accounts receivable from affiliates primarily represent billings
for services and reimbursable expenses and are summarized as follows:

<TABLE>
<CAPTION>
DECEMBER 31,
OCTOBER 1, -----------------------
1995 1994 1993
---------- -------- ----------
<S> <C> <C> <C>
CGS Associates, L.P................... $ 63,914 $ 11,370 $ 28,183
Portman Apparel Associates, L.P....... 514,658 356,596 186,570
California Trade Show Associates,
L.P................................. -- -- 553,173
San Francisco Wine Market Week,
Ltd................................. -- -- 98,549
Wine Show Associates.................. -- -- 284,019
Race Events Joint Venture............. 183,841 -- --
John Portman & Associates............. 14,898 -- --
AMC Orlando, Inc...................... 25,753 17,077 --
Lightfair International Associates.... 23,925 9,392 --
Other................................. 305,285 68,577 84,473
---------- -------- ----------
1,132,274 463,012 1,234,967
Less allowance for doubtful
affiliate receivables.......... 772,535 359,635 995,430
---------- -------- ----------
Net affiliate receivables... $ 359,739 $103,377 $ 239,537
========= ======== =========
</TABLE>

F-29
<PAGE> 113

ATLANTA MARKET CENTER COMPANIES

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

Interest-bearing advances from affiliate represent advances from
Portman Properties and bear interest at the prime rate plus 1%. The
weighted average interest rate on interest-bearing advances at December
31, 1994 and 1993 approximated 8.15% and 7.0%, respectively. Interest
expense recorded on affiliate advances approximated $1,433,000,
$1,467,000, $1,170,000, and $1,131,000 for the 274-day period ended
October 1, 1995 and for the years ended December 31, 1994, 1993, and
1992, respectively. These interest-bearing advances and related accrued
interest were forgiven during 1995 resulting in a contribution of
capital of $20,125,663.

Accounts payable to affiliates represent certain reimbursable
expenses or noninterest-bearing advances and are summarized as follows:

<TABLE>
<CAPTION>
DECEMBER 31,
OCTOBER 1, ---------------------
1995 1994 1993
---------- -------- --------
<S> <C> <C> <C>
Atlanta Decorative Arts Center, L.P...... $ -- $ 95,000 $ 26,920
Portman Properties....................... 173,633 8,436 40,260
Other.................................... 30,000 41,934 51,852
---------- -------- --------
$ 203,633 $145,370 $119,032
======== ======== ========
</TABLE>

(d) Contributions from Affiliate

With the development of the Atlanta Gift Mart in 1990, the Atlanta
Merchandise Mart discontinued leasing space to gift industry tenants.
Due to the significant impact of this event on AMM's cash flow, AMM's
lenders required escrow deposits by AMM, guaranteed by Portman, which
were to be paid by AGM as compensation to AMM for the lost revenue from
the displaced gift industry tenants and to reimburse AMM for marketing
and associated costs to renovate space for new tenants.

The Escrow Agreements provided for an initial deposit of
$15,331,000, which was funded from the AGM construction loan. Of this
amount, $3,911,271 was distributed to Portman on December 29, 1989 and
was recorded as a capital contribution receivable from partner. The
remainder was funded during 1990 and treated as a capital contribution
from Portman to AMM. The $3,911,271, initially distributed to Portman,
was contributed to an affiliate by Portman. The outstanding amount of
the capital contribution receivable, plus accrued interest at 8.5%, has
been included as a component of partners' deficit. Interest income
earned related to this capital contribution receivable was $77,566,
$270,204, $341,681, and $333,393 for the 274-day period ended October 1,
1995 and for the years ended December 31, 1994, 1993, and 1992,
respectively. During 1995 and 1994, Portman made contributions to AMM
amounting to $61,069 and $2,670,636, respectively, which reduced the
total capital contribution receivable to $2,706,638 as of October 1,
1995.

(4) INVESTMENT IN AFFILIATES

In March 1994, AMCMC entered into a joint venture agreement with two
affiliates. AMCMC was a 25% joint venturer. The joint venture was formed for the
purpose of developing and producing an interactive fan event for racing fans.
The joint venture incurred significant losses during the ten months ended
December 31, 1994. Accordingly, AMCMC's loss from this joint venture of $559,516
is included in (earnings) loss from investment in affiliates in the accompanying
combined statement of operations for the year ended December 31, 1994. AMCMC has
received no distributions from its investment in the joint venture.

Portman owns an approximate 50% general partnership interest in a limited
partnership, Portman Lightfair Associates, L.P. (PLALP). The primary asset of
PLALP is its one-third ownership interest in

F-30
<PAGE> 114

ATLANTA MARKET CENTER COMPANIES

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

Lightfair International Associates, a New York general partnership. PLALP's
investment in Lightfair International Associates and Portman's investment in
PLALP are accounted for using the equity method of accounting. Earnings of
$89,985, $102,154, $79,251, and $28,791 for the 274-day period ended October 1,
1995 and the years ended December 31, 1994, 1993, and 1992, respectively,
relating to Portman's indirect investment in Lightfair International Associates
are included in (earnings) loss from investment in affiliates in the
accompanying combined statements of operations. During the 274-day period ended
October 1, 1995 and the years ended December 31, 1994 and 1993, Portman received
distributions from PLALP in the amounts of $102,896, $78,887, and $78,581,
respectively.

(5) COMMERCIAL PROPERTY

A summary of commercial property follows:

<TABLE>
<CAPTION>
DECEMBER 31,
OCTOBER 1, -----------------------------
1995 1994 1993
------------ ------------ ------------
<S> <C> <C> <C>
Land....................................... $ 19,338,993 $ 19,338,993 $ 19,338,993
Buildings and improvements................. 242,184,657 237,552,308 233,533,686
Tenant improvements........................ 29,544,197 27,856,439 24,582,560
Furniture, fixtures, and equipment......... 19,481,933 19,029,699 18,092,577
Construction in progress................... 2,451,233 3,046,486 --
------------ ------------ ------------
$313,001,013 $306,823,925 $295,547,816
=========== =========== ===========
</TABLE>

Construction in progress primarily relates to building and tenant
improvements under construction.

(6) MORTGAGE LOANS PAYABLE

Mortgage loans payable are summarized as follows:

<TABLE>
<CAPTION>
DECEMBER 31,
OCTOBER 1, -----------------------------
1995 1994 1993
------------ ------------ ------------
<S> <C> <C> <C>
AGM(a)..................................... $107,282,009 $110,146,565 $115,248,730
AMM(b)..................................... 141,687,296 141,748,365 144,976,399
AAM(c)..................................... 162,108,691 155,636,784 150,315,548
------------ ------------ ------------
411,077,996 407,531,714 410,540,677
Reduction to reflect AAM and AMM debt
restructuring (see note 1)............... 56,572,532 -- --
------------ ------------ ------------
$354,505,464 $407,531,714 $410,540,677
=========== =========== ===========
</TABLE>

(a) This loan payable represents outstanding balances under a construction
loan agreement with an original funding obligation of up to $137,000,000. This
construction loan is secured by a first mortgage on the land, building, and
improvements owned by AGM, along with AGM's interest as lessor in all existing
and future leases of the property. This loan was restructured effective August
23, 1991 with an extension in maturity date to December 30, 1994 and further
extended to December 30, 1995 during 1994. Effective October 2, 1995, the
construction loan was again restructured with an extension in maturity date to
July 31, 1998. An extension fee equal to 1% of the principal balance outstanding
at October 2, 1995, payable in four equal annual installments, was incurred in
connection with the extension. In addition, the loan may be extended one
additional year if certain performance levels are achieved. Over the term of the
loan, net cash flows of AGM, as defined, must be applied to reduce its
outstanding principal balance. The loan is partially guaranteed by Portman.

F-31
<PAGE> 115

ATLANTA MARKET CENTER COMPANIES

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

The interest rate through December 31, 1994 on this loan payable was
determined based on the Interest Rate and Currency Exchange Agreement, discussed
below. The loan bears interest at a floating rate equal to LIBOR plus 1.375% for
the extended period ending October 1, 1995. After October 1, 1995, the loan
bears interest at a floating rate equal to prime rate plus 1% or LIBOR plus 2%
or the Interbank Offered Rate plus 2% at the option of AGM. The weighted average
rates on amounts outstanding at October 1, 1995 and December 31, 1994 and 1993
approximated 7.73%, 8.10%, and 5.04%, respectively.

AGM previously entered into an Interest Rate and Currency Exchange
Agreement (Rate Agreement) which defined a guaranteed rate for the payment of
interest on the construction loan. This protected interest rate agreement had an
effective term from April 1992 to December 1994. The cost of the Rate Agreement
was $1,305,000. The Rate Agreement provided for the reimbursement of interest
incurred when the applicable interest rate provided for in the agreement (one
month LIBOR) exceeds the guaranteed interest rate. The notional amount of the
Rate Agreement was $120,000,000 through January 1993, and increased to
$124,000,000 and $127,000,000 during January 1993 and 1994, respectively. A
guaranteed interest rate of 9% was tied to these notional amounts.

As part of the restructuring of this loan payable, AGM has entered into a
Rate Cap Transaction Agreement (Rate Cap Agreement) which defines a guaranteed
rate for the payment of interest on the loan. This protected interest rate
agreement has an effective term from November 1, 1995 to September 1, 1998. The
cost of the Rate Agreement was $397,500, is included in other assets at October
1, 1995, and will be amortized to interest expense over the term of the
agreement. The Rate Cap Agreement provides for the reimbursement of interest
incurred when the applicable interest rate provided for in the agreement exceeds
the guaranteed interest rate. The notional amount of the Rate Cap Agreement is
$40,000,000 through January 2, 1996, increases to $100,000,000 through January
2, 1997, and decreases to $95,000,000 and $90,000,000 through January 2, 1998
and September 1, 1998, respectively. A guaranteed interest rate of 9% was tied
to these notional amounts. The counterparty to this Rate Cap Agreement is
considered by management to be a recognized national bank. AMC does not
anticipate a loss resulting from any credit risks associated with counterparty
nonperformance.

Certain covenants, among others, under this mortgage loan agreement require
that AGM maintain specified quarterly levels of net operating income and obtain
approval from its lenders before making certain capital expenditures or
incurring certain operating costs. The mortgage loan agreement requires that
cash of the Atlanta Gift Mart, L.P. be held by the lender and restricted for
payment of operating expenses and other costs as approved by the lender based on
monthly funding budgets and interest and principal on the mortgage loan.

(b) On December 21, 1988, AMM closed a mortgage loan (AMM Mortgage Loan)
from a bank in the amount of $152,500,000. Of this amount, $147,800,000 was
disbursed to AMM as of December 31, 1990. The purpose of this loan was to retire
two then existing mortgage loans and provide additional working capital for the
partners. This loan was restructured effective September 6, 1991 with an
extension in maturity date from December 20, 1991 to December 31, 1995.

The loan is secured by a first mortgage on the land, building, and
improvements of AMM. The loan had been partially guaranteed by Portman in the
amount of approximately $7,900,000, subject to increases or decreases in certain
limited instances.

The terms of the AMM Mortgage Loan call for interest to accrue at a
floating rate equal to the prime rate or LIBOR plus 1.25%. Interest on
$130,000,000 was fixed at 7.56% from August 30, 1991 until January 4, 1993. The
weighted average rates on amounts outstanding at December 31, 1994 and 1993
approximated 5.78% and 5.31%, respectively. The loan agreement provided that any
undisbursed portions of the loan were available on a revolving basis to cover
interest and capital items not covered by net operating revenues. In turn,
Excess Project Cash Flow (as defined) was required to be applied as a loan
prepayment on a quarterly basis.

F-32
<PAGE> 116

ATLANTA MARKET CENTER COMPANIES

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

The loan agreement also contained certain covenants with regard to restrictions
on additional indebtedness and required the achievement of certain performance
standards. Events of default have occurred on this loan payable regarding
certain performance standards and required payments of interest.

AMM entered into various protected interest rate agreements related to the
AMM Mortgage Loan as required by the loan agreement. These agreements provide
for the reimbursement of interest incurred when the reference interest rate
provided for in the agreement (generally one month LIBOR) exceeds certain
guaranteed interest rates. The protected interest rate agreements entered into
during 1991 have effective terms from January 1993 to January 1996. The
guaranteed interest rates are tied to notional amounts totaling $140,000,000 and
vary from 7.4% to 9.0% from January 1993 to January 1996. Effective with the
debt restructuring as discussed below, the remaining unamortized costs relating
to these agreements have been written off.

A portion of this debt was forgiven by the lenders effective October 2,
1995. As a result of such partial forgiveness accounted for in accordance with
SFAS 15, accrued interest of $11,423,103 has been eliminated and the principal
amount of the AMM Mortgage Loan has been reduced by $17,820,659, resulting in a
gain on restructuring of debt as more fully described in (e) below (also see
note 13).

(c) On February 17, 1987, AAM closed a mortgage loan (AAM Mortgage Loan)
from a bank in the amount of $140,000,000. The purpose of this loan was to
retire the then existing debt and provide construction financing for the
expansion of the Atlanta Apparel Mart. This loan was restructured effective
September 6, 1991 with an extension in maturity date from December 28, 1991 to
December 31, 1995. The loan is secured by all real and personal property of AAM
as well as an assignment of AAM's interest in the tenant leases, and a partial
guaranty of payment by Portman.

The terms of the AAM Mortgage Loan call for interest to accrue at a
floating rate equal to the prime rate plus 0.25% or, at the election of AAM, at
a rate equal to LIBOR plus 1.5% or a certificate of deposit rate plus 1.5%, as
defined in the loan agreement. The weighted average interest rate on amounts
outstanding at December 31, 1994 and 1993 approximated 5.80% and 5.20%,
respectively. The terms of the AAM Mortgage Loan called for unpaid interest to
become part of the principal amount on a monthly basis and to thereafter accrue
interest. The agreement also contained certain covenants with regard to
restrictions on additional indebtedness and required the achievement of certain
performance standards. Events of default have occurred on the AAM Mortgage Loan
regarding certain performance standards.

A portion of this debt was forgiven by the lenders effective October 2,
1995. As a result of such partial forgiveness accounted for in accordance with
SFAS 15, the principal amount of the AAM Mortgage Loan has been reduced by
$38,751,873, resulting in a gain on restructuring of debt as more fully
described in (e) below (also see note 13).

(d) Restricted escrow deposits at October 1, 1995 and December 31, 1994 and
1993 represent deposits for the payment of property taxes, insurance, and ground
lease payments that are required by the lenders on the aforementioned mortgage
loans.

(e) The components of the extraordinary gain on debt restructuring as
discussed in (b) and (c) above are summarized as follows:

<TABLE>
<CAPTION>
AMM AAM TOTAL
------------ ------------ ------------
<S> <C> <C> <C>
Outstanding mortgage loan payable and
related accrued interest immediately
preceding debt restructuring............. $153,110,399 $162,108,691 $315,219,090
Extraordinary gain on debt restructuring... (29,243,762) (38,751,873) (67,995,635)
------------ ------------ ------------
Carrying value of debt after
restructuring............................ $123,866,637 $123,356,818 $247,223,455
=========== =========== ===========
</TABLE>

F-33
<PAGE> 117

ATLANTA MARKET CENTER COMPANIES

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

(7) EQUITY (DEFICIT)

The following is a summary of the components of the combined deficit of AMC
as of October 1, 1995 and December 31, 1994 and 1993:

<TABLE>
<CAPTION>
1995 1994 1993
------------- ------------- -------------
<S> <C> <C> <C>
Partners' deficit:
Partners' excess (withdrawals)
contributions:
AMM.................................. $ (99,148,144) $ (99,131,647) $(101,532,079)
AAM.................................. 15,816,649 (4,334,661) (4,774,800)
AGM.................................. (18,087,804) (18,104,622) (18,857,465)
Pisa................................. 369,314 369,314 369,314
------------- ------------- -------------
Total partners' excess
withdrawals................... (101,049,985) (121,201,616) (124,795,030)
------------- ------------- -------------
Accumulated Partners' earnings (losses):
AMM.................................. 22,006,503 (6,028,230) (1,561,394)
AAM.................................. (62,832,204) (92,803,716) (84,038,213)
AGM.................................. (10,867,215) (11,327,707) (10,072,173)
Pisa................................. 27,839 13,962 (1,412)
------------- ------------- -------------
Total accumulated Partners'
losses........................ (51,665,077) (110,145,691) (95,673,192)
------------- ------------- -------------
Total partners' deficit......... (152,715,062) (231,347,307) (220,468,222)
------------- ------------- -------------
Stockholder's equity:
Common stock............................ 1,500 1,500 1,500
Retained earnings:
AMCMC................................ 514,919 283,682 233,584
PLALP................................ 33,796 46,707 23,439
------------- ------------- -------------
Total retained earnings......... 548,715 330,389 257,023
------------- ------------- -------------
Total stockholder's equity...... 550,215 331,889 258,523
------------- ------------- -------------
Total deficit................... $(152,164,847) $(231,015,418) $(220,209,699)
============ ============ ============
</TABLE>

(8) FAIR VALUE OF FINANCIAL INSTRUMENTS

In accordance with Statement of Financial Accounting Standards No. 107,
"Disclosures about Fair Value of Financial Instruments," AMC is required to
disclose the fair value of financial instruments for which it is practicable to
estimate the value.

The carrying amounts reported in the accompanying combined balance sheet as
of October 1, 1995 for restricted escrow deposits, tenant, affiliate, and other
receivables, and accounts payable approximate their fair values.

The AAM and AMM mortgage loans payable discussed in notes 6(b) and 6(c)
result from the troubled debt restructuring discussed in note 1. Accordingly,
due to the unique circumstances leading to the issuance of this debt and since
there is no ready market available for this debt, determination of its fair
value is not practicable. The carrying value of the AGM loan at October 1, 1995
discussed in note 6(a) is a representative approximation of its fair value as it
was restructured and extended as of October 2, 1995, with interest accruing at
variable interest rates. The carrying value of the related interest rate
protection agreement approximates fair value.

F-34
<PAGE> 118

ATLANTA MARKET CENTER COMPANIES

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

(9) EMPLOYEE RETIREMENT PLAN

AMC participates in a multiemployer defined contribution retirement plan.
The plan was established effective January 1, 1982 and covers substantially all
employees over age 21. Retirement plan expense approximated $326,000, $397,000,
$388,000, and $463,000 for the 274-day period ended October 1, 1995 and for the
years ended December 31, 1994, 1993, and 1992.

(10) RENTAL REVENUES

AMC derives its rental revenues from the leasing of showroom space in the
Atlanta Merchandise Mart, Atlanta Gift Mart, and Atlanta Apparel Mart.

Approximate annual future rental payments to be received under existing
noncancelable leases for the next five years and thereafter are summarized
below:

(11) COMMITMENTS

AMC is obligated under various long-term operating leases, primarily land
leases. Total rental expense for the 274-day period ended October 1, 1995 and
for the years ended December 31, 1994, 1993, and 1992 was approximately
$373,000, $440,000, $424,000, and $397,000, respectively. Approximate
commitments under noncancelable long-term leases for the next five years and
thereafter are summarized below:

(12) CONTINGENCIES

AMC and certain affiliates are defendants in various matters of litigation
generally incidental to their business. Although it is difficult to predict the
ultimate outcome of these cases, management believes, based on discussions with
counsel, that any ultimate liability will not materially affect the financial
position, results of operations, or liquidity of AMC.

(13) FORMATION OF AMC, INC.

Following the partial forgiveness of debt of AAM and AMM discussed in notes
1 and 6, as part of a troubled debt restructuring, the creditors of Portman and
certain of his affiliates, including the creditors of AMC, received 82.5%
(51,292,851 shares) of the equity interest of AMC, Inc. and corporate notes

F-35
<PAGE> 119

ATLANTA MARKET CENTER COMPANIES

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

approximating $168,959,000. Portman Holdings, L.P. (a partnership indirectly
owned by Portman) received the remaining 17.5% (10,880,302 shares) equity
interest in AMC, Inc. The fiscal year end of AMC was December 31. The fiscal
year end of AMC, Inc. is August 31.

AMC, Inc. common shares were issued on November 17, 1995; however,
effective control of the net assets of AMC was transferred to AMC, Inc. on
October 2, 1995, from which date the risks and rewards of ownership were those
of the shareholders of AMC, Inc. As a result of the aforementioned troubled debt
restructuring, the lenders of the AMM Mortgage Loan and the AAM Mortgage Loan
accepted corporate notes (the "Mart Bonds"), in the face amount of $160,000,000,
and an equity interest in AMC, Inc. in modification of outstanding principal and
interest on the AMM Mortgage Loan and the AAM Mortgage Loan. The Mart Bonds earn
interest at the rate of 7.5% per annum until July 31, 1997 and 9.0% per annum
thereafter through maturity on July 31, 2000, payable quarterly in arrears.

Over the term of the Mart Bonds, 50% of net cash flow (as defined) in
excess of $10,000,000 must be paid as principal reductions on the Mart Bonds
within 120 days after the end of each fiscal year. The remaining principal is
due at maturity. The Mart Bonds are secured by a deed to secure debt on both the
AAM and AMM properties and a pledge of related assets, subject to a first lien
securing a revolving line of credit entered into by AMC, Inc. effective October
2, 1995.

Covenants in the Mart Bond agreements (1) restrict the payment of dividends
or other distributions to shareholders of AMC, Inc. as well as redemption by
AMC, Inc. of any of its common stock; (2) restrict the incurrence of additional
debt; (3) restrict the acquisition of additional assets unless certain net worth
requirements and debt coverage ratios are maintained; (4) place restrictions on
affiliate transactions, mergers, and sales of assets; and (5) allow for
acceleration of the maturity of the Mart Bonds upon a default under other debt
agreements. In addition, the Mart Bonds become immediately redeemable at 101% of
par upon certain changes in ownership or management of AMC, Inc. as defined.

F-36
<PAGE> 120

APPENDIX E

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS.

Article VII of the Company's Articles of Incorporation provides that to the
fullest extent permitted by the Georgia Business Corporation Code a director of
the Company shall not be liable to the Company or its shareholders for monetary
damages for breach of duty of care or other duty as a director. Article VIII of
the Company's Articles of Incorporation provides that to the fullest extent
permitted by the Georgia Business Corporation Code, each person who is or was or
had agreed to become a director or officer of the Company, or each such person
who is or was serving or who had agreed to serve at the request of the Board of
Directors or an officer of the Company as an employee or agent of the Company or
as a director, officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise (including the heirs, executors,
administrators or estate of such person), shall be indemnified by the Company.

Article 9 of the By-laws of the Company provides that the Company shall
indemnify any person who was or is a party to a proceeding because he is or was
a director or officer against liability incurred in the proceeding if he acted
in a manner he believed in good faith to be in or not opposed to the best
interests of the Company, and, in the case of any criminal proceeding, he had no
reasonable cause to believe his conduct unlawful. The termination of a
proceeding by judgment, order, settlement, conviction, or a plea of nolo
contendere or its equivalent, is not, of itself, determinative that the director
or officer did not meet the standard of conduct set forth in the Georgia
Business Corporation Code. However, no indemnification shall be made to an
officer or director in connection with a proceeding by or in the right of the
Company in which the director or officer was adjudged liable to the Company in
connection with any other proceeding in which he was adjudged liable on the
basis that personal benefit was improperly received by him. Indemnification in
connection with a proceeding by or in the right of the Company is limited to
reasonable expenses incurred in connection with the proceeding.

The Company shall not indemnify an officer or director unless authorized in
the specific case upon a determination that indemnification of the director or
officer is permissible in the circumstances because he has met the applicable
standard of conduct set forth above. Such determination shall be made: (a) by
the Board of Directors, by a majority vote of a quorum consisting of directors
who were not parties to the proceeding or, if such quorum is not obtainable, by
majority vote of a committee duly designated by the Board of Directors (in which
designation directors who are parties may participate), consisting solely of two
or more directors not at the time parties to the proceedings; or (b) by special
legal counsel (i) selected by the Board of Directors or its committee in the
manner described in (a) above, or (ii) if a quorum cannot be obtained or a
committee appointed as described in (a) above, selected by a majority vote of
the full Board of Directors (in which selection directors who are parties may
participate); or (c) by the shareholders, but shares owned by or voted under the
control of directors or officers who are at the time parties to the proceeding
may not be voted on the determination. Authorization of indemnification or an
obligation to indemnify and an evaluation as to reasonableness of expenses shall
be made in the same manner as the determination that indemnification is
permissible, except that if the determination is made by special legal counsel,
authorization of indemnification and evaluation as to reasonableness of expenses
shall be made by those entitled under (b)(ii) above to select counsel.

To the extent that a director or officer of the Company has been
successful, on the merits or otherwise, in defense of any action, suit or
proceeding or in defense of any claim, issue or matter therein, he shall be
indemnified against expenses (including attorneys' fees) actually and reasonably
incurred by him in connection therewith. The Company may pay for or reimburse
the reasonable expenses incurred by a director or officer who is a party to a
proceeding in advance of the final disposition of the proceeding if the director
or officer furnishes the Company a written affirmation of his good faith belief
that he has met the standard of conduct set forth above, and the director or
officer furnishes the Company a written undertaking, executed

II-1
<PAGE> 121

personally or on his behalf, to repay any advances if it is ultimately
determined that he is not entitled to indemnification by the Company as
authorized in Article 9 of the Company's By-laws.

A resolution of the shareholders approved by a majority of the votes
entitled to be cast shall permit the Company to indemnify or obligate itself to
indemnify a director or officer made a party to a proceeding, including a
proceeding brought by or in the right of the Company, without regard to the
limitations set forth in Article 9 of the By-laws. However, the Company shall
not indemnify the director or officer for any liability incurred in a proceeding
in which the director or officer is adjudged liable to the Company or is
subjected to injunctive relief in favor of the Company: (a) for any
appropriation, in violation of his duties, of any business opportunity of the
Company; (b) for acts or omissions which involve intentional misconduct or a
knowing violation of law; (c) for the types of liability set forth in the
Georgia Business Corporation Code sec.14-2-832 or any successor provision
thereto; or (d) for any transaction from which he received an improper personal
benefit.

The Company has the power to purchase and maintain insurance on behalf of
any person who is or was a director, officer, employee or agent of the Company
or who is or was serving at the request of the Company as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust or
other enterprise, against any liability asserted against him and incurred by him
in that capacity, or arising out of his status as such, whether or not the
Company would have the power to indemnify him against such liability under the
provisions of Article 9 of the Company's By-laws.

The Company maintains directors and officers liability insurance which,
subject to the terms and exclusions of the policies, cover any claim or claims
made during the period the policies are in force, against all persons who were,
now are or shall be duly elected directors or officers of the Company for any
actual or alleged act, error, omission, misstatement, misleading statement or
breach of duty by a director or officer in his or her capacity as a director or
officer, or any matter not excluded by the terms and conditions of the policies,
asserted against them solely by reason of such person's status as an officer or
director of the Company, the limit of liability under the policies is $10
million per policy year.

ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.

(A) EXHIBITS.

Pursuant to Item 601 of Regulations S-K, 17 C.F.R.
sec. 229.601(b)(4)(iii)(A), the Company has excluded from Exhibit No. 4
instruments defining the rights of holders of long-term debt with respect to
debt that does not exceed 10% of the total assets of the Company. The Company
agrees to furnish copies of such instruments to the Commission upon request.

<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
- ----------- ---------------------------------------------------------------------------------
<C> <C> <S>
3.1 -- Articles of Incorporation
3.2 -- Articles of Amendment
3.3 -- By-laws
4.1 -- Exchange and Registration Rights Agreement, dated as of October 2, 1995, by and
between the Company and the initial holders of the Private Placement Notes named
therein
4.2 -- Shareholders Agreement, dated as of October 2, 1995, by and between the Company
and the initial shareholders of the Company named therein, as amended
4.3 -- Indenture dated as of October 2, 1995 between the Company and Reliance Trust
Company as Trustee, relating to the Exchange Notes (including the form of the
Exchange Notes)
4.4 -- First Amendment to Indenture, dated as of April 4, 1996, between the Company and
Reliance Trust Company, as Trustee
4.5 -- Form of Warrants
5.1 -- Opinion of Jones, Day, Reavis & Pogue re: legality
8.1 -- Opinion of Jones, Day, Reavis & Pogue re: tax matters
10.1 -- Amended and Restated Credit Agreement dated as of October 2, 1995, by and among
Atlanta Gift Mart, L.P., Bank of America National Trust and Savings Association,
as Agent, and the other financial institutions named therein
</TABLE>

II-2
<PAGE> 122

<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
- ----------- ---------------------------------------------------------------------------------
<C> <C> <S>
10.2 -- Rate Cap Transaction Agreement dated as of July 28, 1995, between Atlanta Gift
Mart, L.P. and NationsBank, N.A. (Carolinas)
10.3 -- Modification and Second Amended and Restated Deed to Secure Debt and Security
Agreement dated as of October 2, 1995, by and among Atlanta Gift Mart, L.P. and
Bank of America National Trust and Savings Association, as Agent
10.4 -- First Amended and Restated Sequestration Agreement dated as of October 2, 1995,
by and among Atlanta Gift Mart, L.P., Bank of America National Trust and Savings
Association, as Agent, and the Company
10.5 -- Credit Agreement dated as of September 30, 1995, by and among the Company, The
Provident Bank as Agent, and the other lenders named therein
10.6 -- Deed to Secure Debt and Security Agreement dated as of October 2, 1995, between
the Company and The Provident Bank
10.7 -- Risk Management Agreement dated November 13, 1995, between the Company and
Portman Holdings
10.8 -- Financial and Strategic Planning Agreement dated January 24, 1996, between the
Company and Portman Holdings
10.9 -- Executive Office Staff Support Agreement dated January 24, 1996, between the
Company and Portman Holdings
10.10 -- Tax Services Agreement dated November 14, 1995, between the Company and Portman
Holdings
10.11 -- Cash Management Services Agreement dated October 25, 1995, between the Company
and Portman Holdings
10.12 -- Telephone Service Agreement dated November 13, 1995, between the Company and
Portman Holdings
10.13 -- Human Resource Service Agreement dated November 13, 1995, between the Company and
Portman Holdings
10.14 -- Legal Services Agreement dated November 13, 1995, between the Company and Portman
Holdings
10.15 -- Computer Service Agreement dated November 13, 1995, between the Company and
Portman Holdings
10.16 -- First Restatement of Management Agreement dated as of October 2, 1995, by and
between AMC Orlando and AMCMC
10.17 -- First Restatement of Management Agreement dated as of October 2, 1995, by and
between AMC Tampa and AMCMC
10.18 -- First Restatement of Management Agreement dated as of October 2, 1995, by and
between CGS and AMCMC
10.19 -- Indenture of Lease dated as of November 1, 1968, by and between Mary Templis and
Belle Frank as Trustees under the terms of the Will of Louis Templis, as Lessor,
and the Company (by virtue of assignment), as Lessee
10.20 -- Indenture of Lease dated as of December 30, 1966, by and between The 250 Spring
Corp., as Lessor, and the Company (by virtue of assignment), as Lessee
10.21 -- Indenture of Lease dated as of September 1, 1972, by and between Bonnie Gordon
Roe, as Lessor, and the Company (by virtue of assignment), as Lessee
10.22 -- Indenture of Lease dated as of October 27, 1969, by and between Shepard Bryan, as
Lessor, and the Company (by virtue of assignment), as Lessee
10.23 -- Indenture of Lease dated as of November 1, 1969, by and between Jules G. Edwards,
as Lessor, and the Company (by virtue of assignment), as Lessee, as amended by an
Amendment to Indenture of Lease dated January 16, 1970
</TABLE>

II-3
<PAGE> 123

<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
- ----------- ---------------------------------------------------------------------------------
<C> <C> <S>
10.24 -- Indenture of Lease dated as of September 1, 1969, by and between Mrs. Dorothy
Fielder Ewing, Frank K. Ewing, Morris M. Ewing, Nancy C. Ewing Hembrough, and
Trust Company of Georgia, as Trustee, under the Will of Charles A. Ewing, as
Lessor, and the Company (by virtue of assignment), as Lessee
10.25 -- Indenture of Lease dated as of July 1, 1969, by and between Alice L. Weeks, and
James C. Weeks, as Lessor, and the Company (by virtue of assignment), as Lessee,
as amended by a First Amendment to Indenture of Lease dated as of February 28,
1987
10.26 -- Indenture of Lease dated as of September 1, 1968, by and between Paul A. Clark,
as Lessor, and the Company (by virtue of assignment), as Lessee
10.27 -- Indenture of Lease dated as of September 1, 1969, by and between Sara K. Bernath,
Myer Caplan, Elias Margoles, Alvin Saul, and Felice G. Silberstein, as Lessor,
and the Company (by virtue of assignment), as Lessee
10.28 -- Indenture of Lease dated as of October 16, 1963, by and between Methodist
Children's Home of North Georgia, Inc., as Lessor, and the Company (by virtue of
assignment), as Lessee
10.29 -- Indenture of Lease dated October 1, 1963, by and between Mrs. Eula Sikes
Hamilton, as Lessor, and the Company (by virtue of assignment), as Lessee
10.30 -- Indenture of Lease dated as of August 1, 1975, by and between William T. Davis as
Lessor, and the Company (by virtue of assignment), as Lessee
10.31 -- Indenture of Lease dated October 16, 1963, by and between J.W. O'Neal, as Lessor,
and the Company (by virtue of assignment), as Lessee
10.32 -- Indenture of Lease dated November 7, 1963, by and among Mrs. Anne Grant Owens, as
Lessor, and the Company (by virtue of assignment), as Lessee
10.33 -- Lease Agreement dated May 20, 1992, by and between Metropolitan Atlanta Rapid
Transit Authority, as Lessor, and the Company (by virtue of assignment), as
Lessee
10.34 -- Promissory Note dated October 2, 1995, by and between AMC Tampa, Inc. and the
Company (by virtue of assignment)
10.35 -- Promissory Note dated October 2, 1995, by and between AMC Orlando, Inc. and the
Company (by virtue of assignment)
10.36 -- Noncompetition Agreement dated as of October 2, 1995, between John C. Portman,
Jr. and the Company
10.37 -- Construction Management Services Agreement dated April 1, 1996, between Portman
Holdings and the Company
10.38 -- Security Services Agreement dated January 1, 1996, between Portman Holdings and
the Company
10.39 -- Security Services Agreement dated May 1, 1996 between Portman Holdings and the
Company
12.1 -- Statement re: computation of ratios
21.1 -- Subsidiaries of the Company
23.1* -- Consents of KPMG Peat Marwick LLP
23.2 -- Consent(s) of Jones, Day, Reavis & Pogue (included in Exhibits 5.1 and 8.1)
24.1 -- Power of Attorney (included in signature page)
25.1 -- Statement re: eligibility of trustee on Form T-1 of Reliance Trust Company, as
Trustee (bound separately)
99.1* -- Letter of Transmittal
</TABLE>

- ---------------

* Filed herewith. All other exhibits have been filed previously.

II-4
<PAGE> 124

(B) FINANCIAL STATEMENT SCHEDULES.

Report of Independent Auditors
Schedule II -- Valuation and Qualifying Accounts

Schedules not listed above have been omitted because the information
required to be set forth therein is not applicable or is shown in the financial
statements or notes thereto.

ITEM 22. UNDERTAKINGS.

The undersigned registrant hereby undertakes:

(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:

(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;

(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20% change in the
maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement; and

(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the registration statement
or any material change to such information in the registration
statement.

provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if the
registration statement is on Form S-3 or Form S-8, and the information
required to be included in a post-effective amendment by those paragraphs
is contained in periodic reports filed with or furnished to the Commission
by the registrant pursuant to Sections 13 or 15(d) of the Securities
Exchange Act of 1934 that are incorporated by reference in the registration
statement.

(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.

(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.

Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Registrant of expenses incurred
or paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnifica-

II-5
<PAGE> 125

tion by it is against public policy as expressed in the Act and will be governed
by the final adjudication of such issue.

The undersigned Registrant hereby undertakes to respond to requests for
information that is incorporated by reference into the prospectus pursuant to
Item 4, 10(b), 11, or 13 of this Form, within one business day of receipt of
such request, and to send the incorporated documents by first class mail or
other equally prompt means. This includes information contained in documents
filed subsequent to the effective date of the Registration Statement through the
date of responding to the request.

The undersigned Registrant hereby undertakes to supply by means of a
post-effective amendment all information concerning a transaction, and the
company being acquired involved therein, that was not the subject of and
included in the Registration Statement when it became effective.

II-6
<PAGE> 126

SIGNATURES

Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Amendment to its Registration Statement to be signed on its behalf
by the undersigned, thereunto duly authorized, in the City of Atlanta, State of
Georgia, on the 23rd day of May, 1996.

AMC, INC.

By: /s/ JOHN C. PORTMAN, JR.
------------------------------------
John C. Portman, Jr.
Chairman of the Board and Chief
Executive Officer

Pursuant to the requirements of the Securities Act of 1933, this Amendment
to Registration Statement has been signed by the following persons in the
capacities and on the date indicated.

<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- --------------------------------------------- --------------------------------- -------------
<C> <S> <C>
/s/ JOHN C. PORTMAN, JR. Chairman of the Board and Chief May 23, 1996
- --------------------------------------------- Executive Officer (principal
John C. Portman, Jr. executive officer)

/s/ JOHN M. RYAN President and Director May 23, 1996
- ---------------------------------------------
John M. Ryan

* Treasurer (principal financial
- --------------------------------------------- and accounting officer)
David J. Nadeau

* Director
- ---------------------------------------------
R. Charles Loudermilk, Sr.

* Director
- ---------------------------------------------
D. Raymond Riddle

* Director
- ---------------------------------------------
A.J. Robinson

* Director
- ---------------------------------------------
Stanley P. Steinberg

* Director
- ---------------------------------------------
Andrew Young

By: /s/ JOHN C. PORTMAN, JR. May 23, 1996
- ---------------------------------------------
John C. Portman, Jr.
Attorney-in-Fact

By: /s/ JOHN M. RYAN May 23, 1996
- ---------------------------------------------
John M. Ryan
Attorney-in-Fact
</TABLE>

II-7
<PAGE> 127

INDEPENDENT AUDITORS' REPORT

The Partners and Stockholder
The Atlanta Market Center Companies:

Under date of December 8, 1995, we reported on the combined balance sheets
of the Atlanta Market Center Companies as of October 1, 1995 and December 31,
1994 and 1993, and the related combined statements of operations, equity
(deficit), and cash flows for the period from January 1, 1995 through October 1,
1995 and for each of the years in the three-year period ended December 31, 1994,
which are included in the prospectus. In connection with our audits of the
aforementioned combined financial statements, we also audited the related
combined financial statement schedule in the registration statement. This
financial statement schedule is the responsibility of the Companies' management.
Our responsibility is to express an opinion on this financial statement schedule
based on our audits.

In our opinion, such financial statement schedule, when considered in
relation to the basic combined financial statements taken as a whole, presents
fairly, in all material respects, the information set forth therein.

KPMG PEAT MARWICK LLP

Atlanta, Georgia
December 8, 1995
<PAGE> 128

SCHEDULE II

ATLANTA MARKET CENTER COMPANIES

VALUATION AND QUALIFYING ACCOUNTS
FOR THE PERIOD FROM JANUARY 1, 1995 THROUGH OCTOBER 1, 1995 AND
FOR THE YEARS ENDED DECEMBER 31, 1994, 1993, AND 1992

<TABLE>
<CAPTION>
ADDITIONS
------------------------
ALLOWANCE AT BAD RECOVERIES ALLOWANCE
BEGINNING DEBT OF PREVIOUS RECEIVABLES AT END OF
OF PERIOD EXPENSE WRITE-OFFS WRITTEN OFF PERIOD
------------ ---------- ----------- ----------- ----------
<S> <C> <C> <C> <C> <C>
Allowance for
doubtful receivables:
1995............................ $ 2,428,372 $ 667,830 $ 78,947 $ (527,333) $2,647,816
1994............................ 2,549,441 1,182,613 25,385 (1,329,067) 2,428,372
1993............................ 2,874,697 755,312 131,633 (1,212,201) 2,549,441
1992............................ 1,978,293 1,745,542 32,889 (882,027) 2,874,697
</TABLE>

<PAGE> 1

EXHIBIT 23.1

INDEPENDENT AUDITORS' CONSENTS
The Board of Directors
AMC, Inc.:

We consent to the use of our report included herein and to the reference to
our firm under the headings "Summary Selected Financial Data," "Selected
Historical Financial Data" and "Experts" in the prospectus.

KPMG PEAT MARWICK LLP

Atlanta, Georgia

May 23, 1996

The Partners and Stockholder
The Atlanta Market Center Companies:

We consent to the use of our reports included herein and to the reference
to our firm under the headings "Summary Selected Financial Data," "Selected
Historical Financial Data" and "Experts" in the prospectus.

KPMG PEAT MARWICK LLP

Atlanta, Georgia

May 23, 1996

<PAGE> 1

AMC, INC.
LETTER OF TRANSMITTAL
TO TENDER $1.00 PRINCIPAL AMOUNT OF
FIXED RATE CLASS A SECURED NOTES
DUE JULY 31, 2000
IN EXCHANGE FOR
$1.00 PRINCIPAL AMOUNT OF
FIXED RATE CLASS A SECURED NOTES
DUE JULY 31, 2000
OF
AMC, INC.

PURSUANT TO ITS PROSPECTUS DATED MAY 24, 1996

- --------------------------------------------------------------------------------
THE EXCHANGE OFFER AND WITHDRAWAL PERIOD WILL
EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON

JUNE 25, 1996, UNLESS EXTENDED.

- --------------------------------------------------------------------------------

The Exchange Agent:

RELIANCE TRUST COMPANY

<TABLE>
<S> <C>
BY FACSIMILE: BY MAIL/HAND/OVERNIGHT DELIVERY:
(404) 266-1572 ONE ATLANTA PLAZA
SUITE 2840
CONFIRMATION: 950 EAST PACES FERRY ROAD
(800) 749-0752 OR ATLANTA, GEORGIA 30326-1142
(404) 266-0663
</TABLE>

DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET
FORTH ABOVE, OR TRANSMISSION OF THIS LETTER OF TRANSMITTAL VIA A FACSIMILE
NUMBER OTHER THAN AS SET FORTH ABOVE, WILL NOT CONSTITUTE A VALID DELIVERY.

The undersigned acknowledges receipt of the Prospectus dated May 24, 1996
(the "Prospectus") of AMC, Inc. (the "Company") and this Letter of Transmittal,
which together constitute the Company's offer (the "Exchange Offer") to exchange
$1.00 principal amount of Fixed Rate Class A Secured Notes due July 31, 2000
(the "Private Placement Notes") for each $1.00 principal amount of Fixed Rate
Class A Secured Notes due July 31, 2000 (the "Exchange Notes") of the Company.

This Letter of Transmittal is to be used (a) if certificates for Private
Placement Notes are to be physically delivered to the Exchange Agent herewith,
or (b) if tenders are to be made according to the guaranteed delivery procedures
set forth in the Prospectus under "The Exchange Offer -- Guaranteed Delivery
Procedures." Holders of Private Placement Notes whose certificates are not
immediately available or who cannot deliver their certificates and all other
documents required hereby to the Exchange Agent before the Expiration Date (as
defined below) must tender their Private Placement Notes according to the
guaranteed delivery procedures set forth in the "The Exchange
Offer -- Guaranteed Delivery Procedures" in the Prospectus. See Instruction 1.

The Exchange Offer will expire at 12:00 Midnight, New York City time, on
June 25, 1996 (the "Expiration Date") unless extended, in which case the term
"Expiration Date" shall mean the last time and date to which the Exchange Offer
is extended. Capitalized terms used herein and not otherwise defined shall have
the respective meanings assigned to them in the Prospectus.

PLEASE READ THE ENTIRE LETTER OF TRANSMITTAL CAREFULLY BEFORE CHECKING ANY
BOX BELOW. THE INSTRUCTIONS INCLUDED WITH THIS LETTER OF TRANSMITTAL MUST BE
FOLLOWED. QUESTIONS AND REQUESTS FOR ASSISTANCE OR FOR ADDITIONAL COPIES OF THE
PROSPECTUS AND LETTER OF TRANSMITTAL SHOULD BE DIRECTED TO THE EXCHANGE AGENT AT
(800) 749-0752 OR (404) 266-0663 OR AT ITS ADDRESS SET FORTH ABOVE.

Holders who wish to tender their Private Placement Notes must complete the
table in Box One and complete and sign in Box Two.
<PAGE> 2

BOX ONE

List below the Private Placement Notes to which this Letter of Transmittal
relates. If the space provided below is inadequate, the certificate numbers and
amount of Private Placement Notes tendered should be listed on a separate signed
schedule affixed hereto.

<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------
DESCRIPTION OF PRIVATE PLACEMENT NOTES
- ----------------------------------------------------------------------------------------------------------
(1)
NAME(S) AND ADDRESS(ES)
OF REGISTERED HOLDER(S) CERTIFICATE(S) TENDERED
(PLEASE FILL IN EXACTLY AS NAME(S) (ATTACH ADDITIONAL LIST
APPEAR(S) ON CERTIFICATE(S)) IF NECESSARY)
- ----------------------------------------------------------------------------------------------------------
(3)
AGGREGATE
PRINCIPAL (4)
AMOUNT AGGREGATE
(2) REPRESENTED PRINCIPAL
CERTIFICATE BY AMOUNT
NUMBER(S) CERTIFICATE(S)* TENDERED*
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
TOTAL PRINCIPAL
AMOUNT
- ----------------------------------------------------------------------------------------------------------
* Unless otherwise indicated, the holder will be deemed to have tendered the entire stated face amount of
all Private Placement represented by tendered certificates. See Instruction 3.
- ----------------------------------------------------------------------------------------------------------
</TABLE>

2
<PAGE> 3

SPECIAL ISSUANCE INSTRUCTIONS
(SEE INSTRUCTIONS 4, 5, 6 AND 7)

To be completed ONLY if certificates for Exchange Notes are to be issued in
the name of someone other than the person whose signature appears in Box 2 of
this Letter of Transmittal.

Issue Exchange Notes To:

Name
- --------------------------------------------------------------------------------
(PLEASE PRINT)

Address
- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------
(ZIP CODE)

- --------------------------------------------------------------------------------
(TAX IDENTIFICATION OR SOCIAL SECURITY NUMBER)

(COMPLETE SUBSTITUTE FORM W-9)

SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 4, 5, 6 AND 7)

To be completed ONLY if certificates for Exchange Notes are to be sent to
someone other than the person whose signature appears in Box Two of this Letter
of Transmittal or such person at an address other than that shown in Box One,
entitled "Description of Private Placement Notes Tendered."

Mail and deliver Exchange Notes to:

Name
- --------------------------------------------------------------------------------
(PLEASE PRINT)

Address
- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------
(ZIP CODE)

- --------------------------------------------------------------------------------
(TAX IDENTIFICATION OR SOCIAL SECURITY NUMBER)

3
<PAGE> 4

NOTE: SIGNATURES MUST BE PROVIDED UNDER BOX TWO
PLEASE READ CAREFULLY THE ACCOMPANYING INSTRUCTIONS

Ladies and Gentlemen:

In accordance with the terms and subject to the conditions set forth in the
Exchange Offer, the undersigned hereby tenders to the Company the
above-described Private Placement Notes. Subject to, and effective upon,
acceptance for exchange of the Private Placement Notes tendered herewith, the
undersigned hereby exchanges, assigns and transfers to, or upon the order of,
the Company all right, title and interest in and to all the Private Placement
Notes that are being tendered hereby and that are being accepted for exchange
pursuant to the Exchange Offer, and hereby irrevocably constitutes and appoints
the Exchange Agent the true and lawful agent and attorney-in-fact of the
undersigned with respect to such Private Placement Notes (with full knowledge
that the Exchange Agent also acts as agent for the Company) with full power of
substitution (such power of attorney being deemed to be an irrevocable power
coupled with an interest), to (a)(1) deliver such Private Placement Notes to the
Company or (2) present such Private Placement Notes for transfer to the
Registrar on the Company's register, together, in each case, with all
accompanying evidences of transfer and authenticity to, or upon order of, the
Company, upon receipt by the Exchange Agent, as the undersigned's agent, of the
certificates representing Exchange Notes to which the undersigned is entitled
upon the acceptance by the Company of such Private Placement Notes pursuant to
the Exchange Offer, and (b) receive all benefits and otherwise exercise all
rights of beneficial ownership of such Private Placement Notes, all in
accordance with the terms and subject to the conditions of the Exchange Offer.

The name and address of the registered holder(s) should be printed above in
Box One under "Description of Private Placement Notes Tendered," exactly as they
appear on the certificates representing Private Placement Notes tendered hereby.
The certificate number(s) and Private Placement Notes to which this Letter of
Transmittal relates should be indicated in the appropriate boxes above under
"Description of Private Placement Notes Tendered."

The undersigned hereby represents and warrants that the undersigned has
full power and authority to tender, exchange, assign and transfer the Private
Placement Notes tendered hereby, and that when the same are accepted for
exchange by the Company, the Company will acquire good and unencumbered title
thereto, free and clear of all liens, restrictions, charges and encumbrances,
and such Private Placement Notes shall not be subject to any adverse claims. The
undersigned will, upon request, execute and deliver any additional documents
deemed by the Exchange Agent or the Company to be necessary or desirable to
complete the exchange, assignment and transfer of the Private Placement Notes
tendered hereby.

Further, the undersigned hereby represents and warrants that the
undersigned is acquiring the Exchange Notes in the ordinary course of its
business, the undersigned has no arrangement or understanding with any person to
participate in the distribution of the Exchange Notes, neither the undersigned
nor any other such person is an affiliate of the Company, and, if the
undersigned is not a broker-dealer, the undersigned is not engaged in, and does
not intend to engage in, a distribution of Exchange Notes. If the undersigned is
a broker-dealer, it acknowledges that it will deliver a copy of the Prospectus
in connection with any resale of the Exchange Notes.

All authority conferred, or agreed to be conferred, in this Letter of
Transmittal shall survive the death or incapacity of the undersigned, and any
obligation of the undersigned hereunder shall be binding upon the heirs,
executors, administrators, legal representatives, successors and assigns of the
undersigned. This tender of Private Placement Notes may be withdrawn at any time
prior to the Expiration Date. See "The Exchange Offer -- Withdrawal Rights" in
the Prospectus.

The undersigned understands that tenders of Private Placement Notes
pursuant to any of the procedures described in the Prospectus and in this Letter
of Transmittal will constitute a binding agreement between the undersigned and
the Company upon the terms and subject to the conditions of the Exchange Offer.

Private Placement Notes properly tendered and not withdrawn will be
accepted as soon as practicable after the satisfaction or waiver of all
conditions to the Exchange Offer. The undersigned understands that the Exchange
Notes will be delivered as promptly as practicable following acceptance of the
tendered Private Placement Notes by the Company. The Exchange Offer is subject
to a number of conditions, as more particularly set forth in the Prospectus. See
"The Exchange Offer -- Certain Conditions to the Exchange Offer" in the
Prospectus. The undersigned recognizes that as a

4
<PAGE> 5

result of such conditions the Company may not be required to accept any of the
Private Placement Notes tendered hereby. In such event, the Private Placement
Notes not accepted for exchange will be returned to the undersigned at the
address shown below the undersigned's signature(s), unless otherwise indicated
under "Special Delivery Instructions."

Unless otherwise indicated herein under "Special Issuance Instructions,"
please issue the certificates for the Exchange Notes with respect to the Private
Placement Notes accepted for exchange, or return the Private Placement Notes not
accepted for exchange, in the name(s) of the undersigned at the address set
forth above under "Description of Private Placement Notes Tendered." Similarly,
unless otherwise indicated under "Special Delivery Instructions," please deliver
the certificates for the Exchange Notes with respect to the Private Placement
Notes accepted for exchange, or the Private Placement Notes if not accepted for
exchange (and accompanying documents, as appropriate), to the undersigned at the
address set forth above under "Description of Private Placement Notes Tendered."
In the event that both the "Special Issuance Instructions" and the "Special
Delivery Instructions" are completed, please issue the certificates for Exchange
Notes accepted for exchange, and/or return or issue any certificates for Private
Placement Notes not tendered or not accepted for exchange, in the name(s) of,
and deliver such certificates for Exchange Notes and/or such certificates for
Private Placement Notes not tendered or accepted for exchange to the person or
persons so indicated. The undersigned recognizes that the Company has no
obligation pursuant to the "Special Issuance Instructions" to make arrangements
for the transfer of any Private Placement Notes from the name of the registered
holder(s) thereof if the Company does not accept for exchange the Private
Placement Notes so tendered. Further, the undersigned recognizes that the
undersigned must comply with all terms and conditions of the Indenture, by and
between the Company and Reliance Trust Company dated as of October 2, 1995 (the
"Indenture"), to transfer Private Placement Notes either not tendered for
exchange or not accepted for exchange from the name of the registered holder(s).

5
<PAGE> 6

SIGNATURE(S) MUST BE PROVIDED
UNDER BOX 2

(Please read the Accompanying Instructions Carefully)
/ / CHECK HERE IF TENDERED PRIVATE PLACEMENT NOTES ARE ENCLOSED
HEREWITH.

/ / CHECK HERE IF TENDERED PRIVATE PLACEMENT NOTES ARE BEING
DELIVERED PURSUANT TO A NOTICE OF GUARANTEED DELIVERY
PREVIOUSLY SENT TO THE EXCHANGE AGENT PRIOR TO THE DATE
HEREOF AND COMPLETE THE FOLLOWING:

Name(s) of Registered Owner(s):
-----------------------------------------
Date of Execution of
Notice of Guaranteed Delivery:
-----------------------------------------

Name of Eligible Institution
which Guaranteed Delivery:
-----------------------------------------

NOTICE: Signature(s) must be guaranteed by an institution which
is a participant in the Securities Transfer Agent Medallion
Program ("STAMP") or similar program.

6
<PAGE> 7

BOX TWO

PLEASE SIGN BELOW

TO BE COMPLETED BY ALL HOLDERS TENDERING
PRIVATE PLACEMENT NOTES (WHETHER OR NOT CERTIFICATES ARE
BEING PHYSICALLY TENDERED HEREBY)

<TABLE>
<S> <C>
X X
- -------------------------------------------------- --------------------------------------------------
Signature(s) of Registered Holder(s) Signature(s) of Registered Holder(s)
or Authorized Signatory or Authorized Signatory
X X
- -------------------------------------------------- --------------------------------------------------
Type or Print Name Type or Print Name

Dated: ------------------------------ , 1996 Dated: ------------------------------ , 1996
</TABLE>

Area Code and Telephone No(s).:
-------------------------------------------------

Tax Identification or Social Security No(s).:
-----------------------------------

Must be signed by the registered holder(s) exactly as the name(s) appear(s)
on the certificate(s) for Private Placement Notes or by person(s) authorized to
become registered holder(s) as evidenced by endorsements and documents
transmitted herewith. See Instructions 4 and 5. If signature is by a trustee,
executor, administrator, guardian, attorney-in-fact, officer of a corporation,
agent, or other person acting in a fiduciary or representative capacity, please
provide the following information. See Instruction 4.

Name(s):
------------------------------------------------------------------------

TYPE OR PRINT

- --------------------------------------------------------------------------------

Address(es) (including zip code):
-------------------------------------------

- --------------------------------------------------------------------------------

Capacity (Full Title):
----------------------------------------------------------

GUARANTEE OF SIGNATURE(S)

(If required -- see Instruction 4)

Name of Firm:
-------------------------------------------------------------------

Authorized Signature:
-----------------------------------------------------------

Title:
--------------------------------------------------------------------------

Dated:
--------------------------------------------------------------------------

NOTICE: Signature(s) must be guaranteed by an institution which is a participant
in the Securities Transfer Agent Medallion Program ("STAMP") or similar program.

PLEASE COMPLETE SUBSTITUTE FORM W-9 BELOW -- SEE INSTRUCTION 7

7
<PAGE> 8

PAYER'S NAME: RELIANCE TRUST COMPANY

<TABLE>
<S> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------------
SUBSTITUTE Part 1 -- PLEASE PROVIDE YOUR TIN IN Social Security Number
FORM W-9 THE BOX AT RIGHT AND CERTIFY BY SIGNING -----------------------------------
AND DATING BELOW OR
Employer Identification Number
----------------------------------------------------------------------------
Department of the Treasury Part 2 -- Check the box if you are exempt from backup withholding. / /
Internal Revenue Service
----------------------------------------------------------------------------
CERTIFICATION -- UNDER THE PENALTIES OF PERJURY, I CER-
TIFY THAT (1) the number shown on this form is my correct
taxpayer identification number (or I am waiting for a
PAYER'S REQUEST FOR TAXPAYER number to be issued to me) and (2) I am not subject to
IDENTIFICATION NUMBER (TIN) backup withholding either because I have not been
CERTIFICATION 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 the IRS
has notified me that I am no longer subject to backup
withholding. (You must cross Item (2) above if you have
been notified by the IRS that you are subject to backup
withholding because of underreporting interest or divi-
dends on your return.)
SIGNATURE ___________________________ DATE________________________________
- ----------------------------------------------------------------------------------------------------------
</TABLE>

NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING
OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE EXCHANGE 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 within sixty (60) days, 31% of all
reportable payments made to me thereafter will be withheld until I provide a
number.

<TABLE>
<S> <C>
- ----------------------------------------------------- -----------------------------------------
Signature Date
</TABLE>

8
<PAGE> 9

INSTRUCTIONS

FORMING PART OF THE TERMS AND CONDITIONS OF THE EXCHANGE OFFER

1. Delivery of this Letter of Transmittal and Certificates; Guaranteed
Delivery Procedures. This Letter of Transmittal is to be used if (a)
certificates for Private Placement Notes are to be physically delivered to the
Exchange Agent herewith, or (b) tenders are to be made according to the
guaranteed delivery procedures set forth in the Prospectus.

To validly tender Private Placement Notes pursuant to the Exchange Offer,
either (a) a properly completed and duly executed copy of this Letter of
Transmittal (or facsimile thereof) with any required signature guarantees,
together with either a properly completed and duly executed Notice of Guaranteed
Delivery or certificates for the Private Placement Notes, and any other
documents required by this Letter of Transmittal, must be received by the
Exchange Agent at its address or number set forth on the first page of this
Letter of Transmittal, or (b) a holder of Private Placement Notes must comply
with the guaranteed delivery procedures described in the next succeeding
paragraph.

Holders of Private Placement Notes who desire to tender such Private
Placement Notes pursuant to the Exchange Offer and whose certificates
representing such Private Placement Notes are not lost but are not immediately
available, or time will not permit all required documents to reach the Exchange
Agent prior to 12:00 Midnight, New York City time, on the Expiration Date may
tender their Private Placement Notes pursuant to the guaranteed delivery
procedures set forth in the Prospectus under "The Exchange Offer -- Guaranteed
Delivery Procedures." Pursuant to such procedures, (a) tender must be made by a
firm which is a member of a registered national securities exchange or of the
National Association of Securities Dealers, Inc. or by a commercial bank or
trust company having an office or correspondent in the United States and, in
each instance, which is a participant in the Securities Transfer Agent Medallion
Program ("STAMP") or similar program (an "Eligible Institution"), (b) the
Exchange Agent must have received from such Eligible Institution, prior to 12:00
Midnight, New York City time, on the Expiration Date, a properly completed and
duly executed Notice of Guaranteed Delivery (by mail, hand delivery, telegram or
facsimile transmission), and (c) the certificates for all tendered Private
Placement Notes in proper form for transfer, together with a properly completed
and duly executed Letter of Transmittal (or facsimile thereof) and all other
documents required by this Letter of Transmittal, must be received by the
Exchange Agent within five New York Stock Exchange trading days after the
Expiration Date, all as provided in the Prospectus under the caption "The
Exchange Offer -- Guaranteed Delivery Procedures."

THE METHOD OF DELIVERY OF THIS LETTER OF TRANSMITTAL, THE CERTIFICATES FOR
PRIVATE PLACEMENT NOTES AND OTHER REQUIRED DOCUMENTS IS AT THE ELECTION AND RISK
OF THE TENDERING HOLDER. EXCEPT AS OTHERWISE PROVIDED HEREIN AND IN THE
PROSPECTUS, SUCH DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE
EXCHANGE AGENT. IF DELIVERY IS BY MAIL, IT IS RECOMMENDED THAT THE HOLDER USE
PROPERLY INSURED, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, AND THAT THE
MAILING BE MADE SUFFICIENTLY IN ADVANCE OF THE EXPIRATION DATE TO PERMIT
DELIVERY TO THE EXCHANGE AGENT PRIOR TO 12:00 MIDNIGHT, NEW YORK CITY TIME, ON
THE EXPIRATION DATE.

All questions as to the validity, form, eligibility (including time of
receipt), acceptance, withdrawal and revocation of Private Placement Notes
tendered for exchange will be determined by the Company in its sole discretion,
whose determination will be final and binding. The Company reserves the absolute
right to reject any or all tenders or withdrawals of Private Placement Notes
that are not in proper form or the acceptance of which would, in the opinion of
counsel to the Company, be unlawful. The Company also reserves the absolute
right to waive any defects or irregularities in the tender or conditions of the
Exchange Offer as to particular Private Placement Notes. The interpretation of
the Company of the terms and conditions of the Exchange Offer (including the
Instructions herein) will be final and binding. Unless waived, any defects or
irregularities in connection with tenders must be cured within such time as the
Company shall determine. No alternative, conditional or contingent tenders will
be accepted. Neither the Company, the Exchange Agent nor any other person will
be under any duty to give notification of any defects or irregularities in any
tender or will incur any liability for failure to give any such notification.
Tenders of Private Placement Notes will not be deemed to have been made until
irregularities have been cured or waived. Any certificates for Private Placement
Notes received by the Exchange Agent that are not properly tendered and as to
which irregularities have not been cured or waived will be

9
<PAGE> 10

returned by the Exchange Agent to the tendering holders of such Private
Placement Notes, unless otherwise provided in this Letter of Transmittal, as
soon as practicable following the Expiration Date.

Any tendered Private Placement Notes which are not accepted for exchange
because of an invalid tender, the occurrence or nonoccurrence of certain other
events set forth in the Prospectus or otherwise will be returned without expense
to the appropriate tendering holder thereof as promptly as practicable following
the expiration, withdrawal or termination of the Exchange Offer.

2. Withdrawal Rights. Private Placement Notes tendered pursuant to the
Exchange Offer may be withdrawn, as hereinafter provided, at any time prior to
12:00 Midnight, New York City time, on the Expiration Date.

For the withdrawal of a tender to be effective, a written, telegraphic or
facsimile transmitted notice of withdrawal must be received by the Exchange
Agent at the address or number set forth on the front page of this Letter of
Transmittal prior to the Expiration Date. Any such notice of withdrawal must
specify the name of the person who tendered the Private Placement Notes, (ii)
identify the Private Placement Notes to be withdrawn (including the certificate
number or numbers and principal amount of the Private Placement Notes), and
(iii) be signed in the same manner required by the Letter of Transmittal by
which such Private Placement Notes were tendered (including any required
signature guarantees, endorsements and/or powers). All questions as to the
validity, form and eligibility (including time of receipt) of notices of
withdrawal will be determined by the Company, whose determination will be final
and binding on all parties. The Private Placement Notes so withdrawn, if any,
will be deemed not to have been validly tendered for exchange for purposes of
the Exchange Offer. Any Private Placement Notes which have been tendered for
exchange but which are withdrawn will be returned to the holder without cost to
such holder as soon as practicable after withdrawal. Properly withdrawn Private
Placement Notes may be retendered on or prior to 12:00 Midnight, New York City
time, on the Expiration Date by following any of the procedures described above
under Instruction 1.

Neither the Company, the Exchange Agent nor any other person will be under
any duty to give notification of any defects or irregularities in any notice of
withdrawal or will incur any liability for failure to give such notification.

3. Acceptance of Private Placement Notes for Exchange; No Partial
Tenders. Tenders will be accepted in denominations of $1.00 and any integral
multiples thereof. The entire aggregate principal amount of Private Placement
Notes will be deemed to have been tendered unless otherwise indicated. If less
than the entire aggregate principal amount of any Private Placement Notes
evidenced by a submitted certificate is to be tendered, the tendering holder
should fill in the aggregate principal amount of the Private Placement Notes
which is to be tendered in column (4) of the table in Box One above.

Upon the terms and subject to the conditions of the Exchange Offer, the
acceptance for exchange of Private Placement Notes validly tendered pursuant to
the Exchange Offer and not withdrawn, and delivery of the Exchange Notes, will
be made promptly after the Expiration Date.

For purposes of the Exchange Offer, the Company shall be deemed to have
accepted for exchange validly tendered Private Placement Notes when, as and if
the Company has given oral or written notice thereof to the Exchange Agent. The
Exchange Agent will act as agent for the tendering holders of Private Placement
Notes for the purpose of receiving the Exchange Notes and transmitting the
Exchange Notes to such holders. Tendered Private Placement Notes not accepted
for exchange by the Company will be returned without expense to tendering
holders as soon as practicable following the Expiration Date.

4. Signatures on this Letter of Transmittal; Stock Powers and Endorsements;
Guarantee of Signatures. With respect to a tender of Private Placement Notes,
this Letter of Transmittal must be signed by the registered holder(s) of the
Private Placement Notes tendered, and such signatures must correspond with the
name(s) of such holder(s) as written on the face of the certificate without
alteration, enlargement, or any change whatsoever. If this Letter of Transmittal
is signed by a person other than the registered holder(s) of the Private
Placement Notes tendered hereby, such Private Placement Notes must be endorsed
or accompanied by appropriate stock powers signed exactly as the name(s) of the
registered holder(s) appear(s) on such certificates. Signatures of endorsement
on any such certificate or stock powers must be guaranteed by an Eligible
Institution.

(a) If any of the Private Placement Notes tendered hereby are held of
record by two or more persons, all such persons must sign this Letter of
Transmittal.

10
<PAGE> 11

(b) If any of the Private Placement Notes tendered hereby are registered in
different names, it will be necessary to complete, sign and submit as many
separate Letters of Transmittal and any necessary accompanying documents as
there are different registrations.

(c) If this Letter of Transmittal is signed by the registered holder(s) of
the Private Placement Notes tendered hereby, no endorsements of certificates or
separate stock powers are required, unless the Private Placement Notes are not
accepted for exchange, or the certificates for Exchange Notes are to be issued
in the name of, or delivered to, any person other than the registered holder(s).
Signatures on any such certificate or stock powers must be guaranteed by an
Eligible Institution (unless signed by an Eligible Institution).

(d) If this Letter of Transmittal is signed by a person other than the
registered holder(s) of the Private Placement Notes tendered hereby,
certificates representing such Private Placement Notes must be endorsed or
accompanied by appropriate bond powers and signed exactly as the name(s) of the
registered holder(s) appear(s) on such certificates. Signatures on any such
certificate or bond powers must be guaranteed by an Eligible Institution (unless
signed by an Eligible Institution).

(e) If this Letter of Transmittal or any certificates or bond powers are
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,
unless waived by the Company, proper evidence satisfactory to the Company of the
authority of such person to so act must be submitted with this Letter of
Transmittal.

5. Brokerage Fees and Transfer Taxes. Holders of Private Placement Notes
who tender Private Placement Notes will not be required to pay transfer taxes
with respect to the exchange of Private Placement Notes pursuant to the Exchange
Offer unless the box entitled "Special Issuance Instructions" herein is marked
as described in Instruction 6. If, however, the box entitled "Special Issuance
Instructions" is marked and Exchange Notes are to be issued in the name of, or
delivered to, any person other than the registered holder(s), or if a transfer
tax is imposed for any reason other than the exchange of Private Placement Notes
for Exchange Notes pursuant to the Exchange Offer, the amount of any transfer
taxes (whether imposed on the registered holder(s), such other person or
otherwise) will be payable by the tendering holder(s). Unless satisfactory
evidence of the payment of such taxes, or exemption therefrom, is submitted
herewith, the amount of such transfer taxes will be billed directly to the
tendering holder(s). EXCEPT AS PROVIDED IN THIS INSTRUCTION 5, IT WILL NOT BE
NECESSARY FOR TRANSFER TAX STAMPS TO BE AFFIXED TO THE CERTIFICATES LISTED IN
THIS LETTER OF TRANSMITTAL.

6. Special Issuance and Delivery Instructions. If (a) certificates for
Exchange Notes are to be issued in the name of a person other than the person(s)
signing this Letter of Transmittal or (b) Private Placement Notes not accepted
for exchange are to be delivered to a person other than the person(s) signing
this Letter of Transmittal, the appropriate boxes on this Letter of Transmittal
should be completed. Further, if Private Placement Notes not accepted for
exchange are to be delivered to a person other than the person(s) signing this
Letter of Transmittal, such Private Placement Notes must be accompanied by such
documents as are required under the terms and conditions of the Indenture.

7. Substitute Form W-9. Federal income tax law requires each holder who
tenders Private Placement Notes to provide the Exchange Agent with such holder's
Taxpayer Identification Number ("TIN") and to certify that such holder is not
subject to backup withholding for underreporting interest or dividend income.
These certifications must be made by entering the TIN in the space provided on
the Substitute Form W-9 herein and signing and dating the form in the
appropriate places.

FAILURE TO PROVIDE THE INFORMATION REQUESTED ON THE SUBSTITUTE FORM W-9 MAY
SUBJECT A HOLDER TO A $50 PENALTY IMPOSED BY THE INTERNAL REVENUE SERVICE AND TO
BACKUP WITHHOLDING OF 31% OF ANY REPORTABLE PAYMENT TO BE MADE TO SUCH HOLDER.

If backup withholding applies to a holder, the Exchange Agent is required
to withhold 31% of any reportable payments made to such holder. Backup
withholding is not an additional tax. Rather, the tax liability of persons
subject to backup withholding will be reduced by the amount of tax withheld. If
withholding results in an overpayment of taxes, a refund may be obtained.

Certain holders (including, among others, all corporations and certain
foreign individuals that establish their entitlement to an exemption) are not
subject to these backup withholding and reporting requirements. In order for a

11
<PAGE> 12

foreign individual to qualify as an exempt recipient, that holder must submit a
statement, signed under penalties of perjury, attesting to that individual's
exempt status. Such statements can be obtained from the Exchange Agent.

For additional information in this regard, please refer to the enclosed
Guidelines for Certification of TIN on Substitute Form W-9.

8. Waiver of Conditions. The Company reserves the absolute right to waive
the specified conditions to the Exchange Offer, as described in, and to the
extent provided in, the Prospectus under "The Exchange Offer -- Certain
Conditions to the Exchange Offer."

9. Mutilated, Lost, Stolen or Destroyed Certificates. Any holder whose
certificates for Private Placement Notes have been mutilated, lost, stolen or
destroyed should contact the Exchange Agent at the address indicated above for
further instructions.

10. Expiration Date. The Exchange Offer will expire at 12:00 Midnight, New
York City time, on June 25, 1996, unless extended by the Company. The Company
expressly reserves the right, at any time and from time to time, to extend the
Exchange Offer for such period or periods as it may determine in its sole
discretion, in which event the Expiration Date shall be the time and date on
which such Exchange Offer, as so extended, shall expire. The Company will notify
all holders of any extension by issuing a press release prior to 9:00 a.m., New
York City time, on the next business day following the previously scheduled
Expiration Date. During any such extension, all Private Placement Notes
previously tendered and not accepted for exchange will remain subject to the
Exchange Offer and may, subject to the terms and conditions hereof, be accepted
for exchange by the Company, subject to the withdrawal rights of tendering
holders.

11. Requests for Assistance or Additional Copies. Questions and requests
for assistance may be directed to the Exchange Agent at its address and
telephone number set forth above. Additional copies of the Prospectus and this
Letter of Transmittal may be obtained from the Exchange Agent at its address and
telephone number set forth above.

Important: This Letter of Transmittal or a manually signed facsimile copy
hereof (together with certificates and all other required documents) or the
Notice of Guaranteed Delivery must be received by RELIANCE TRUST COMPANY, the
Exchange Agent, prior to 12:00 Midnight, New York City time, on the Expiration
Date.

12
<PAGE> 13

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.

<TABLE>
<CAPTION>
- ---------------------------------------------------------
GIVE THE
SOCIAL SECURITY
FOR THIS TYPE OF ACCOUNT: NUMBER OF--
- ---------------------------------------------------------
<C> <S> <C>
1. An individual's account The individual
2. Two or more individuals (joint The actual owner of
account) the account or, if
combined funds, any
one of the
individuals(1)
3. Custodian account of a minor The minor(2)
(Uniform Gift to Minors Act)
4. a. The usual revocable savings The grantor-
trust (grantor is also trustee(1)
trustee)
b. So-called trust account that The actual owner(1)
is not a legal or valid trust
under state law
5. Sole proprietorship The owner(3)
- ---------------------------------------------------------
<CAPTION>
- ---------------------------------------------------------
GIVE THE
EMPLOYER
FOR THIS TYPE OF ACCOUNT: IDENTIFICATION
NUMBER OF--
- ---------------------------------------------------------
6. Sole proprietorship The owner(3)
7. A valid trust, estate, or Legal entity (4)
pension trust
8. Corporate The corporation
9. Association, club, religious, The organization
charitable, educational or
other tax-exempt organization
10. Partnership The partnership
11. A broker or registered nominee The broker or
nominee
12. Account with the Department of The public entity
Agriculture in the name of a
public entity (such as a state
or local government, school
district, or prison) that
receives agriculture program
payments
- ---------------------------------------------------------
</TABLE>

(1) List first and circle the name of the person whose number you furnish.

(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
Employer Identification number.

(4) List first and circle the name of the legal trust, estate, or pension trust.
(Do not furnish the identifying number of the personal representative or
trustee unless the legal entity itself is not designated in the account
title.)

NOTE: If no name is circled when more than one name is listed, the number will
be considered to be that of the first name listed.

<PAGE> 14

GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION

NUMBER ON SUBSTITUTE FORM W-9

PAGE 2

Section references are to the Internal Revenue Code.

OBTAINING A NUMBER

If you don't have a taxpayer identification number or you don't know your
number, obtain Form SS-5, Application for a Social Security Number Card, or Form
SS-4, Application for Employer Identification Number, at the local office of the
Social Security Administration or the Internal Revenue Service (the "IRS") and
apply for a number.

PAYEES EXEMPT FROM BACKUP WITHHOLDING

The following is a list of payees exempt from backup withholding and for which
no information reporting is required. For interest and dividends, all listed
payees are exempted except item (9). For broker transactions, payees listed in
items (1) through (13) and a person registered under the Investment Advisers Act
of 1940 who regularly acts as a broker are exempt. Payments subject to reporting
under sections 6041 and 6041A are generally exempt from backup withholding only
if made to payees described in items (1) through (7), except that a corporation
that provides medical and health care services or bills and collects payments
for such services is not exempt from backup withholding or information
reporting. Only payees described in items (2) through (6) are exempt from backup
withholding for barter exchange transactions, patronage dividends, and payments
by certain fishing boat operators.

(1) A corporation.

(2) An organization exempt from tax under section 501(a), or an individual
retirement plan ("IRA"), or a custodial account under section 403(b)(7).

(3) The United States or any of its agencies or instrumentalities.

(4) A state, the District of Columbia, a possession of the United States, or
any of their political subdivisions or instrumentalities.

(5) A foreign government or any of its political subdivisions, agencies or
instrumentalities.

(6) An international organization or any of its agencies or instrumentalities.

(7) A foreign central bank of issue.

(8) A dealer in securities or commodities required to register in the United
States 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 listed in the
most recent publication of the American Society of Corporate Secretaries,
Inc., Nominee List.

(15) A trust exempt from tax under section 664 or described in section 4947.

Payments of dividends and patronage dividends generally not subject to backup
withholding also include the following:

- Payments to nonresident aliens subject to withholding under section 1441.

- Payments to partnerships not engaged in a trade or business in the United
States and that have at least one nonresident partner.

- Payments of patronage dividends not paid in money.

- Payments made by certain foreign organizations.

Payments of interest generally not subject to backup withholding include the
following:

- Payments of interest on obligations issued by individuals.

Note: You may be subject to backup withholding if this interest is $600 or more
and is paid in the course of the payer's trade or business and you have not
provided your correct taxpayer identification number to the payer.

- Payments of tax-exempt interest (including exempt interest dividends under
section 852).

- Payments described in section 6049(b)(5) to nonresident aliens.

- Payments on tax-free covenant bonds under section 1451.

- Payments made by certain foreign organizations.

- Mortgage interest paid by you.

Payments that are not subject to information reporting are also not subject to
backup withholding. For details see sections 6041, 6041A(a), 6042, 6044, 6045,
6049, 6050A and 6050N, and the regulations under such sections.

PRIVACY ACT NOTICE

Section 6109 requires you to give your correct taxpayer identification number 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. The IRS uses the numbers for identification
purposes and to help verify the accuracy of your tax return. You must provide
your taxpayer identification number whether or not you are required to file a
tax return. Payers must generally withhold 31% of taxable interest, dividend,
and certain other payments to a payee who does not furnish a taxpayer
identification number to a payer. Certain penalties may also apply.

PENALTIES

(1) PENALTY FOR FAILURE TO FURNISH TAXPAYER IDENTIFICATION NUMBER. If you fail
to furnish your correct taxpayer identification number to a payer, 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.

(2) 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.

(3) CRIMINAL PENALTY FOR FALSIFYING INFORMATION. Willfully falsifying
certifications or affirmations may subject you to criminal penalties including
fines and/or imprisonment.

(4) MISUSE OF TAXPAYER IDENTIFICATION NUMBERS. If the requester discloses or
uses your taxpayer identification numbers 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.