<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Schedule 13D
Under the Securities Exchange Act of 1934
(Amendment No. 3)
CLEVETRUST REALTY INVESTORS
(Name of Issuer)
SHARES OF BENEFICIAL INTEREST
(Title of Class of Securities)
186780-10-2
(CUSIP Number)
Stephen R. Kalette
3830 Kelley Avenue, Cleveland OH 44114 (216) 881-5300 X3200
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
February 19, 1997
(Date of Event which Requires Filing
of this Statement)
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition which is the subject of this Schedule 13D, and is
filing this schedule because of Rule 13d-1(b)(3)or (4), check the
following box / /.
Note: Six copies of this statement, including all exhibits, should be
filed with the Commission. See Rule 13d-1(a) for other parties to whom
copies are to be sent.
*The remainder of this cover page shall be filled out for a reporting
person's initial filing on this form with respect to the subject class of
securities, and for any subsequent amendment containing information which
would alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be
deemed to be "filed" for the purpose of Section 18 of the Securities
Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of
that section of the Act but shall be subject to all other provisions of
the Act (however, see the Notes).
Continued on the following page(s)
Page 1 of 9 Pages
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CUSIP No. 186780-10-2 13D Page 2 of 9 Pages
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Robert H. Kanner Deferred Compensation Trust B 53-0246410
2 Check the Appropriate Box if a member of a Group* (a) / /
(b) / x /
3 SEC USE ONLY
4 Source of Funds*
PF
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS
2(d) or (2e)
/ /
6 CITIZENSHIP OR PLACE OF ORGANIZATION
USA
7 SOLE VOTING POWER
NUMBER OF
SHARES 1,300,000 Shares of Beneficial Interest
BENEFICIALLY
OWNED BY 8 SHARED VOTING POWER
EACH
REPORTING None
PERSON
WITH 9 SOLE DISPOSITIVE POWER
1,300,000 Shares of Beneficial Interest
10 SHARED DISPOSITIVE POWER
None
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,300,000 Common and Common Stock equivalent
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
/ /
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
25.3% of shares outstanding
14 TYPE OF REPORTING PERSON*
00
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CUSIP No. 186780-10-2 13D Page 3 of 9 Pages
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Buckeye Business Products, Inc. Bargaining Unit Pension Trust
2 Check the Appropriate Box if a member of a Group* (a) / /
(b) / x /
3 SEC USE ONLY
4 Source of Funds*
PF
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS
2(d) or (2e)
/ /
6 CITIZENSHIP OR PLACE OF ORGANIZATION
USA
7 SOLE VOTING POWER
NUMBER OF
SHARES 5,000 Shares of Beneficial Interest
BENEFICIALLY
OWNED BY 8 SHARED VOTING POWER
EACH
REPORTING None
PERSON
WITH 9 SOLE DISPOSITIVE POWER
5,000 Shares of Beneficial Interest
10 SHARED DISPOSITIVE POWER
None
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
5,000 Common and Common Stock equivalent
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
/ /
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0.1% of shares outstanding
14 TYPE OF REPORTING PERSON*
EP
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CUSIP No. 186780102 Page 4 of 9 Pages
Item 1. Security and Issuer.
The Schedule 13D as originally filed related to shares of Beneficial Interest,
$1.00 par value (the "Shares"), of CleveTrust Realty Investors (the
"Issuer"). The Schedule 13D as originally filed reported the address of the
Issuer as 2001 Crocker Road, Suite 400, Westlake, Ohio 44145.
Item 2. Identity and Background.
The Schedule 13D as originally filed reflected The Robert H. Kanner
Deferred Compensation Trust B ("Trust B") and The Buckeye Business Products,
Inc. Bargaining Unit Pension Trust (the "Pension Trust") as reporting persons.
The Schedule 13D as originally filed indicated that Trust B invests deferred
compensation funds paid to it pending distribution to Robert H. Kanner, the
sole beneficiary of Trust B, in accordance with the terms of Trust B. The
Schedule 13D as originally filed also indicated that Mr. Kanner is not a
trustee of Trust B; rather, the trustees of Trust B are Stephen R. Kalette and
Eleonora Grmek.
The Schedule 13D as originally filed indicated that the Pension Trust is a
defined benefit pension plan for certain employees of Buckeye Business
Products, Inc. ("Buckeye"). Trustees of the Pension Trust are Mr. Kanner, Mr.
Kalette and Ms. Grmek, none of whom are participants in the pension plan.
Subsequent amendments to Schedule 13D reported that Buckeye became a division
of Bobbie Brooks, Incorporated ("Brooks") effective January 1, 1994. This
Schedule 13D is further amended to reflect that Buckeye became a Division of
Pubco Corporation ("Pubco") on June 27, 1996 as the result of the merger of
Brooks into Pubco on that date.
Trust B and the Pension Trust are sometimes collectively referred to in this
Schedule 13D as the "Reporting Persons".
The Schedule 13D as originally filed reported that Mr. Kanner was the sole
stockholder, a director and an executive officer of Buckeye. Subsequent
amendments to this Schedule 13D reported that Mr. Kanner was a director and
executive officer of Brooks and a director, executive officer and controlling
stockholder of Pubco. The Schedule 13D as originally filed reported that Mr.
Kalette was a director and executive officer of Buckeye. Subsequent
amendments to this Schedule 13D reported that Mr. Kalette was a director
and executive officer of Brooks and Pubco. The Schedule 13D as originally
filed reported that Ms. Grmek was an executive officer of Buckeye.
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CUSIP No. 186780102 Page 5 of 9 Pages
The Schedule 13D as originally filed reported that Buckeye manufactures and
distributes computer and data processing ribbons and other related office
equipment supplies. The Schedule 13D as originally filed reported that the
business of Brooks and Pubco were retail sales, commercial printing, apparel
manufacturing and commercial real estate. This Schedule 13D is further
amended to reflect that in addition to Buckeye's business, Pubco also
manufactures and distributes equipment for the construction and related
industries through a subsidiary, but no longer is involved in retail sales,
commercial printing, apparel sales or commercial real estate.
The Schedule 13D as originally filed reported that Mr. Kanner is a member of
the Board of Trustees of the Issuer.
The Schedule 13D as originally filed reported that none of the Reporting
Persons or their respective trustees have been convicted during the last five
years in a criminal proceeding of the type specified in Item 2(d) of Schedule
13D and none of the Reporting Persons or their respective trustees have been a
party during the last five years to any proceeding described in Item 2(e) of
Schedule 13D.
The Schedule 13D as originally filed reported that all of the individuals
named are citizens of the United States of America.
The Schedule 13D as originally filed reported that the business address for
the Reporting Persons and their respective trustees is 3830 Kelley Avenue,
Cleveland, Ohio 44114.
The Schedule 13D is further amended to report that on February 19, 1997, the
Issuer and its principal shareholders (the "Principal Shareholders") entered
into a letter of intent (the "Letter of Intent") with RM Crowe Company
("RMC"). Trust B is a principal shareholder of the Issuer and executed the
Letter of Intent. The Pension Trust is not and did not. The Letter of Intent
provides that RMC, the Issuer, and the Principal Shareholders intend to
negotiate definitive agreements for RMC to acquire all of the outstanding
Shares at a price of $6.42 per share, in cash.
The Letter of Intent provides that RMC shall have until March 31, 1997, to
conduct a due diligence investigation. To evidence its good faith, RMC has
deposited $300,000 in an escrow account. RMC has the sole discretion to
terminate the Letter of Intent on or before March 31, 1997 and the $300,000
will be refunded. Assuming RMC does not terminate on or before March 31,
1997, the Issuer, RMC and the Principal Shareholders intend to enter into
mutually acceptable agreements providing for the Share purchase. It is
anticipated that if the parties execute a definitive agreement, RMC would make
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CUSIP No. 186780102 Page 6 of 9 Pages
a tender offer for all of the Issuer's Shares in April, 1997. The trustees of
the Issuer have unanimously approved the terms of the Letter of Intent and
have agreed, in the event a definitive agreement is executed by the Issuer,
that they will enter into an agreement to tender the shares they own in the
tender offer. It is anticipated that the Issuer's Board of Trustees will
unanimously recommend acceptance of the tender offer to the shareholders once
the definitive agreement is executed.
The Letter of Intent provides that it may be terminated in certain
circumstances. The Issuer has the right to terminate the Letter of Intent if
RMC is unable to furnish it with evidence of preliminary approval of RMC's
financing for the transaction on or before March 10, 1997.
The Letter of Intent states that it is expected that the definitive agreements
will provide that RMC need not consummate the tender offer unless at least 90%
of the outstanding Shares are tendered. RMC has indicated to the Issuer that
if the tender offer is completed, RMC may desire to complete a merger to
acquire, for the same consideration per Share as paid in the tender offer, any
Shares not tendered. Consummation of the tender offer will be subject to the
condition, among others, that, if neccessary, the Issuer will adopt an
amendment to its declaration of trust to permit such a merger.
As a result of the execution of the Letter of Intent, the Principal
Shareholders might be deemed to have acquired, as a "group" pursuant to Rule
13d-5(b)(1) under the Securities Exchange Act of 1934, beneficial ownership of
all of the Shares of beneficial interest of the Issuer that are subject to the
Letter of Intent. Each of the Reporting Persons expressly disclaim any
beneficial ownership interest in any Shares held by any of the other Principal
Shareholders. Nothing contained in this Schedule 13D should be deemed to be
an admission by the Reporting Persons that a "group" exists within the meaning
of Rule 13d-5(b)(1) as a result of the Letter of Intent. A copy of the Letter
of Intent is filed with this Amendment No. 3 as Exhibit 1.
Item 3. Source and Amount of Funds or Other Consideration.
The Schedule 13D as originally filed reported that Trust B used its own funds
to purchase all Shares of the Issuer owned by it and the Pension Trust used
its own funds to purchase all Shares of the Issuer owned by it. See Item 5.
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CUSIP No. 186780102 Page 7 of 9 Pages
Item 4. Purpose of Transaction.
The Schedule 13D as originally filed reported that each of the Reporting
Persons purchased its own Shares for investment purposes. The Schedule
13D as originally filed also reported that neither Reporting Person had
any plans or proposals of the type described in Item 4 of Schedule 13D,
but that each reserved the right to acquire or dispose of shares and to
make such plans or proposals in the future. The Schedule 13D as
originally filed also reported that Mr. Kanner had been appointed a
Trustee of the Issuer and might influence the affairs of the Issuer in
that capacity. The Schedule 13D as originally filed also reported that
Mr. Kanner reserved the right to acquire securities of the Issuer and to
make such plans or proposals in the future.
The Schedule 13D is further amended to report, as described in Item 2
above, that Trust B is a party to the Letter of Intent. If the tender
offer contemplated by the Letter of Intent is completed, the Reporting
Persons dispose of all of their Shares for the price and in the
manner contemplated by the Letter of Intent. The Letter of Intent also
contemplates possible merger of the Issuer with another entity and
payment to all other shareholders of the Issuer of the same cash
consideration per Share as in the tender offer. The Letter of Intent
provides that RMC shall be entitled to appoint new trustees of the Issuer
upon consummation of the tender offer. If the tender offer is completed
and the merger is not completed, the Shares may no longer be eligible for
trading in any recognized market and the Issuer may be eleigible to
terminate its registration and reporting under the Securities Exchange
Act of 1934, depending on the number of shareholders of the Issuer after
the tender offer.
Item 5. Interest in Securities of the Issuer.
The Schedule 13D as originally filed reported that Trust B acquired
600,000 Shares (then 16.2% of the amount outstanding) on December 28,
1992 for $2.50 per Share in the Issuer's registered offering. Subsequent
amendments reflected that Trust B acquired an additional 300,000 shares
from the Issuer on January 14, 1994 at $3.25 per Share as part of the
Issuer's rights offering, and acquired an additional 400,000 shares from
the Issuer on February 4, 1994, pursuant to Trust B's
oversubscription rights under the rights offering. The Schedule 13D is
further amended to reflect that based upon the number of the Issuer's
Shares currently outstanding, Trust B now owns 25.3% of the Issuer's
outstanding Shares.
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CUSIP No. 186780102 Page 8 of 9 Pages
The Schedule 13D as originally filed reported that the Pension Trust
acquired 5,000 Shares (less than 1% of the amount outstanding) in the
open market in 1986.
The Schedule 13D as originally filed reported that although Mr. Kalette
and Ms. Grmek are trustees of each of Trust B and the Pension Trust, and
Mr. Kanner is the beneficiary of Trust B and a trustee of the Pension
Trust, Trust B and the Pension Trust disclaim the existence of a "group"
between them, as that term is described in Rule 13d-5(b)(1). The
purchases made by each Reporting Person were independent of one another,
the beneficiaries of each Reporting Person differ, and the trustees of
each Reporting Person act for the discreet benefit of each respective
trust.
The Schedule 13D as originally filed reported that Trust B disclaims
beneficial ownership of the Shares owned by the Pension Trust and the
Pension Trust disclaims beneficial ownership of the Shares owned by Trust
B. The Schedule 13D is further amended to reflect that both the Pension Trust
and Trust B disclaim beneficial ownership of any shares owned by any of the
other Principal Shareholders.
The Schedule 13D as originally filed reported that Mr. Kalette and Ms.
Grmek were not beneficiares of Trust B and therefore disclaimed
beneficial ownership of the Shares owned by Trust B.
The Schedule 13D as originally filed reported that although each of the
three trustees of the Pension Trust shared control over the Pension Trust
(and the Shares owned by the Pension Trust) with the other two trustees,
none was a participant in the pension plan and therefore each disclaimed
beneficial ownership of the Shares owned by the Pension Trust.
Item 6. Contracts, Arrangements, Understandings or Relationships
with Respect to Securities of the Issuer.
See Item 2 for a description of the Letter of Intent, to which Trust B is
bound.
Item 7. Material to be Filed as Exhibits.
A copy of the Letter of Intent is filed herewith a Exhibit 1.
<PAGE>
CUSIP No. 186780102 Page 9 of 9 Pages
SIGNATURES
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true,
complete and correct.
February 28, 1997 Robert H. Kanner Deferred
Compensation Trust B
By /s/ Stephen R. Kalette
-----------------------------------
Stephen R. Kalette, Trustee
February 28, 1997 Buckeye Business Products Bargaining
Unit Pension Trust
By /s/ Stephen R. Kalette
-----------------------------------
Stephen R. Kalette, Trustee
7693H1-9
<PAGE>
February 19, 1997
PERSONAL AND CONFIDENTIAL
R. Maurice Crowe, Jr., President
RM CROWE COMPANY
5944 Luther Lane, Suite 501
Dallas, Texas 75225
Re: Letter of Intent
Dear Mr. Crowe:
This letter (the "Letter of Intent") evidences the
intention of CleveTrust Realty Investors, a Massachusetts
business trust (the "Trust"), and RM Crowe Company, a Texas
corporation, or an affiliate, subsidiary or assignee thereof
(herein collectively referred to as "RMC"), to negotiate a
transaction (the "Transaction") pursuant to which RMC would
make a tender offer (the "Offer") to acquire all of the
outstanding shares of beneficial interest, par value $1.00
per share, of the Trust (the "Shares") at a price of $6.42
per Share (assuming not more than 5,136,616 Shares are
outstanding) net to the sellers in cash, without interest
thereon (such amount or any greater amount per share paid
pursuant to the Offer, being hereinafter referred to as the
"Offer Consideration"), in accordance with and subject to
the terms and conditions provided for herein, and in a
definitive tender offer agreement (the "Agreement") between
RMC and the Trust, and in a definitive shareholders
agreement (the "Shareholders Agreement") between RMC and
certain major shareholders of the Trust as identified on
Annex A attached hereto (the "Principal Shareholders"), each
of said agreements to be executed prior to the expiration of
the Due Diligence Period (as hereinafter defined).
The following is a summary of certain principal terms and
conditions of the proposed agreements:
A. Structure of the Transaction. The parties hereto
currently expect the transaction to be structured as a
purchase by RMC of all of the issued and outstanding Shares
of the Trust. The parties contemplate that such purchase
<PAGE>
shall be effected pursuant to a tender offer to purchase all
outstanding Shares of the Trust. In the event all the
outstanding Shares are not tendered in the Offer, RMC may
decide to cause the Trust to be merged with another entity,
pursuant to which the remaining shareholders of the Trust
other than RMC would receive in cash the same price per
share as was paid in the Offer. If RMC should so decide,
then RMC, the Trust and the Principal Shareholders shall
cooperate in taking all actions reasonably required to
permit and cause such merger to be effected, including,
without limitation, by using their reasonable efforts to
cause the governing documents of the Trust to be amended if
necessary to permit such merger (and to cause such matter to
be placed on the agenda for the shareholders meeting to be
held in connection with approving a plan of liquidation, as
contemplated by Paragraph I below), by including provisions
for the same in the Agreement and by the Trust using its
reasonable efforts to cause an opinion of Massachusetts
counsel to be delivered to RMC that such merger is permitted
and is valid and effective under Massachusetts law. RMC
shall use reasonable efforts to furnish the Trust, on or
prior to March 10, 1997, evidence of preliminary approval by
RMC's capital partner or partners ("Financing Partner")
addressing Financing Partner's willingness and intent to
provide financing for the transaction contemplated by this
Letter of Intent, subject to due diligence and the other
terms and conditions referenced therein, but with references
to pricing and rates of return omitted (the "Evidence of
Preliminary Approval"). The parties contemplate that the
Evidence of Preliminary Approval and the definitive
documents for the financing of the Transaction shall provide
that the obligations of the Trust under existing employment
agreements with its executive officers shall have priority
over any obligations that may be imposed on the Trust as a
result of the financing of the Transaction. RMC agrees that
RMC shall not without the prior written consent of the Trust
(i) reduce the number of Shares sought to be purchased in
the Offer, (ii) reduce the Offer Consideration, (iii)
change the form of consideration to be paid in the Offer, or
(iv) impose additional conditions to the Offer or amend any
other term of the Offer in any manner adverse to the Trust,
its employees or the holders of the Trust's shares. RMC may
without the consent of the Trust (a) extend the Offer, if at
the scheduled expiration date of the Offer any of the
conditions to the Offer shall not be satisfied, or any
applicable cure period shall not have expired, until such
time as such conditions are satisfied or waived or such cure
periods have expired and (b) extend the Offer for any period
required by any rule, regulation, interpretation or position
of the Securities and Exchange Commission or the staff
<PAGE>
thereof applicable to the Offer, but any such extension
under (a) or (b) above shall not deprive the Trust of the
right to terminate under Paragraph J(ii)(b)(II).
B. Purchase Price. The Offer Consideration shall be
$6.42 per Share net to sellers in cash, without interest
thereon, for all of the issued and outstanding Shares of the
Trust. The Trust represents that there are 5,136,616 shares
outstanding as of the date of this Letter of Intent. In
addition, the Agreement shall provide that RMC and the Trust
shall indemnify and hold the other harmless from any claim
for any finder's, brokerage, commission or other fee in
connection with the Transaction based upon arrangements made
by or on behalf of RMC or the Trust, as the case may be.
In addition to the foregoing, RMC acknowledges, subject to
investigation during its due diligence under Paragraph D
below, that following completion of the Offer, RMC will use
reasonable efforts to cause the Trust to perform and to
continue to be responsible for its outstanding liabilities
and obligations, including but not limited to obligations
with respect to the CleveTrust Realty Investors Money
Purchase Pension Plan and obligations for items such as
health insurance and unused vacation pay as set out in
CleveTrust Realty Investors Employee Handbook, to the extent
employees are retained by the Trust, and the following
obligations under existing employment agreements:
(i) Compensation to Trust employees in lieu of stock
options of approximately $925,000;
(ii) Employee severance payments of approximately
$1,250,000; and
(iii) Incentive Compensation Program payments of
approximately $1,100,000.
CleveTrust represents and warrants that the Pension Plan and
Health Plan are current and that there are no contingent
liabilities and/or amounts in arrears with respect thereto,
and that the maximum liability for unused vacation pay as of
the date hereof is $65,000.
In addition, RMC shall increase the gross amount of the
Offer by approximately $7,150 per day for each day,
commencing on and including May 6, 1997, until the Offer is
consummated.
<PAGE>
C. Good Faith Deposit. Upon full execution of this
Letter of Intent, subject to the execution of a mutually
agreeable escrow agreement, RMC shall deposit $300,000 as a
good faith deposit (such deposit plus any interest accrued
thereon being referred to as the "Good Faith Deposit") for
the Trust entering into this Letter of Intent. Subject to
the execution of such agreement, the Good Faith Deposit
shall be deposited in an interest bearing account with
Commonwealth Land Title Company, Suite 130, Dallas, Texas,
75225, Attn: Sally Ross. The Good Faith Deposit shall be
deemed "at risk" at 6:00 p.m. CST, March 31, 1997, unless
RMC terminates this Letter of Intent in writing prior to
said time pursuant to Section J (vii) below. In the event
RMC terminates this Letter of Intent on or prior to such
time under J (vii) below, or in the event the Letter of
Intent is terminated under J(i), J(ii)(a), J(iii), J(iv),
J(v) (if terminated by RMC), J(vi), J(viii) or the next to
the last sentence of J below, the Good Faith Deposit shall
be immediately returned to RMC. In the event that RMC does
not terminate and does consummate the Transaction on or
before May 30, 1997, the Good Faith Deposit shall be
returned to RMC.
D. Due Diligence Period. From and after the date hereof,
through and including March 31, 1997 (the "Due Diligence
Period"), RMC and Financing Partner shall have and retain
the right at their sole cost and determination to conduct
any and all due diligence investigations and inspections of
the Trust and its subsidiaries, assets, liabilities,
financial condition, results of operations, cash flows,
business, prospects and relationships with third parties and
shareholders that RMC, in its sole discretion, deems
appropriate and desirable. RMC, Financing Partner and their
respective financial and professional advisors shall have
access to all documents, sites, employees, books and
records, financial statements, correspondence, contracts,
tax returns, reports to any governmental or regulatory
agencies and information owned, possessed or controlled by
the Trust. The Trust shall, if requested by RMC, use
reasonable efforts to provide RMC with all documents that
are customary in real estate transactions. As part of its
investigations, RMC may conduct Phase I or Phase II
environmental audits of the Trust's properties. Without in
any way intending by negative implication or otherwise to
limit the nature of this letter of intent, the parties
hereto understand that RMC may, during the Due Diligence
Period, decline to proceed further with the Transaction or
to execute the Agreement in the event for any reason RMC is
not satisfied in its sole discretion with the results of its
due diligence investigations and inspections or the results
<PAGE>
of any such environmental or engineering audits. RMC agrees
that all third parties which it retains to conduct
environmental audits of the Trust's assets should name the
Trust as a joint party in interest, and that copies of all
investigative reports performed by such third parties on
behalf of RMC shall be simultaneously furnished to the
Trust, with language enabling the Trust to rely on such
reports. RMC's activities shall not unreasonably interfere
with the Trust's operation of its properties, or interfere
with the use of tenants or subtenants occupying the
property. The foregoing notwithstanding, the Trust's prior
written approval, which will not be unreasonably withheld,
shall be required prior to any testing or sampling of
surface or subsurface soils, ground water or any other
materials in or about the properties. RMC shall indemnify
and hold the Trust harmless of and from any costs, expenses,
or damages arising from personal injury or property damages
caused by its environmental investigations or from any
physical inspection of the Trust's properties, but each
party hereto acknowledges that the discovery of an
environmental condition by RMC in the course of its
investigation, by itself, shall not be deemed an event which
results in RMC being responsible for indemnifying or holding
the Trust harmless from the discovered environmental
condition. Said indemnification shall survive the
termination of this or any succeeding agreement. EXCEPT AS
OTHERWISE PROVIDED IN THIS LETTER OF INTENT (INCLUDING,
WITHOUT LIMITATION, PARAGRAPHS E AND Q BELOW), RMC
ACKNOWLEDGES THAT NEITHER THE TRUST NOR THE PRINCIPAL
SHAREHOLDERS HAS MADE, WILL MAKE AND THEY COLLECTIVELY
SPECIFICALLY NEGATE AND DISCLAIM ANY REPRESENTATIONS,
WARRANTIES, PROMISES, COVENANTS, AGREEMENTS OR GUARANTIES OF
ANY KIND OR CHARACTER WHATSOEVER, WHETHER EXPRESS OR
IMPLIED, ORAL OR WRITTEN, PAST, PRESENT, OR FUTURE OF, AS
TO, CONCERNING OR WITH RESPECT TO THE TRUST AND ITS
PROPERTIES, AND SPECIFICALLY THAT NEITHER THE TRUST NOR THE
PRINCIPAL SHAREHOLDERS HAS MADE, WILL MAKE AND THEY
COLLECTIVELY SPECIFICALLY DISCLAIM ANY REPRESENTATIONS
REGARDING COMPLIANCE WITH ANY ENVIRONMENTAL MATTERS, RMC
ACKNOWLEDGING AND AGREEING THAT TO THE MAXIMUM EXTENT
PERMITTED BY LAW, THE TRANSACTIONS CONTEMPLATED BY THIS
AGREEMENT ARE MADE ON AN "AS IS" BASIS WITH ALL FAULTS.
E. Representations and Warranties of the Trust and
Principal Shareholders. The Agreement shall contain
representations and warranties by the Trust, subject to
mutually agreed upon exceptions stated on schedules attached
to the Agreement, as to: (i) the Trust's organization,
qualification, capitalization, lack of subsidiaries, except
<PAGE>
for an inactive corporation which holds real estate licenses
for officers of the Trust, and authority as an organization
and the enforceability of the Agreement; (ii) the status
of the Trust's reports to the Securities and Exchange
Commission (the "Commission"), the accuracy and completeness
of the Trust's financial statements, the absence of any
undisclosed liabilities, and absence of certain changes from
items disclosed in the Trust's most recently filed report to
the Commission; (iii) governmental authorization for the
Transaction (e.g. Hart - Scott - Rodino Antitrust
Improvements Act of 1976, as Amended (the "H-S-R" Act));
(iv) no contravention of, and no defaults under or
violations of other material agreements or applicable laws;
(v) outstanding litigation, if any; (vi) the Trust's
outstanding benefit plans and other labor matters, if any;
(vii) taxes; (viii) title to property, insurance and
intellectual property; (ix) the disclosure to RMC of all
material matters known to the executive officers of the
Trust relating to the Trust and its financial condition and
business and prospects; (x) a complete listing of and a lack
of any defaults under any material contracts; and (xi) a
disclaimer of any representations, warranties and/or
indemnities with respect to environmental matters, or
compliance with environmental laws, except as to the lack of
actual knowledge regarding actual environmental liabilities,
and the Trust's status of compliance with any written notice
of violation from any governmental agency, if any. None of
such warranties shall survive the consummation of the Offer.
The Agreement shall contain provisions permitting RMC to
replace members of the Board of Trustees with its designees
immediately following the consummation of the Offer and
shall also contain covenants by the Trust, including without
limitation the covenants referenced in Paragraph H below,
regarding the conduct of the Trust's business and
prohibitions of certain specified actions, access to records
and properties of the Trust, and other covenants that are
customary in transactions of this nature. The Shareholders
Agreement shall contain representations and warranties, and
related indemnification obligations, all of which shall
survive the consummation of the Offer, regarding title to
the shares purchased, binding effect of the Shareholders
Agreement, authority to sell, the absence of liens on such
shares, and non-contravention with any agreements or laws to
which the Principal Shareholders are parties or subject that
would impair the ability of the Principal Shareholders to
deliver title to the Shares or impose financial liabilities
or obligations on RMC as a result of the purchase thereof.
In the event RMC shall decide to effect the merger
referenced in Paragraph A hereof, the Shareholders Agreement
shall also contain a covenant to vote the shares subject to
<PAGE>
the Shareholders Agreement in favor of any amendments to the
governing documents of the Trust to permit such merger.
F. Representations and Warranties of RMC. The Agreement
shall contain representations and warranties by RMC as to:
(i) RMC's corporate organization, qualification, and
corporate power and authority and the enforceability of the
Agreement (ii) governmental authorization; (iii) non-
contravention of other agreements; and (iv) RMC's financial
ability to complete the Offer and all transactions
contemplated by this Letter of Intent. None of such
warranties shall survive the consummation of the Offer.
G. Conditions to the Offer. The Agreement shall provide
that the only conditions to commencing and consummating the
Offer are those set forth on Annex B to this Letter of
Intent.
H. Conduct of Business. Except as otherwise expressly
permitted by this Letter of Intent, during the period from
the date of this Letter of Intent and continuing until its
expiration or termination or the consummation or termination
of the Agreement, the Trust will conduct its operations only
according to its ordinary and usual course of business
consistent with past practice, in order to preserve intact
its business organization. The parties acknowledge that
three of the Trust's properties, the Englewood Bank
Building, in Englewood, Colorado, the Executive Club Office
Building, in Denver, Colorado, and the Triangle Square
Shopping Center, in Hilton Head Island, South Carolina, are
subject to presently pending contracts of sale, and that the
Trust shall be permitted to consummate such sales; provided,
however, that the proceeds of such sales shall be applied
only as mutually agreed upon by the Trust and RMC. The
parties further agree that the Trust shall not enter into
any other agreements of purchase or sale or letters of
intent with respect to any of its other properties or
assets, without the prior written consent of RMC. The Trust
will also maintain its books and records in the usual
manner, consistent with past practice and not permit a
material change in any of its financial reporting, tax or
accounting practices, except as may be required by generally
accepted accounting principles. The Trust shall also not
without the prior written consent of RMC (i) make any
significant capital improvements except in the ordinary
course of business, or as a result of emergency situations,
or commitments to sell, dispose of or acquire any assets or
properties, except those that are subject to binding
contracts as aforesaid; (ii) declare or pay any dividends
on any of its shares of beneficial interest or make any
<PAGE>
changes to its present capitalization or issue, repurchase
or redeem any shares of beneficial interest; or (iii) enter
into or modify any material contract, agreement, or
commitment (other than the extensions with respect to the
above referenced existing binding purchase agreements), or
incur any debt, liability or obligation, other than in the
ordinary course of business. To the extent letters of intent
exist with respect to certain properties owned by the Trust
with potential buyers which are not binding and RMC deems
their consummation detrimental to the value of the Trust's
shares, RMC shall have the right to compel the Trust to
terminate same. Further, with respect to the three (3)
properties that are currently under contract, the Englewood
Bank Building, in Englewood, Colorado, the Executive Club
Office Building, in Denver, Colorado, and the Triangle
Square Shopping Center, in Hilton Head Island, South
Carolina, the Trust shall not (i) extend the contemplated
closing dates for such contracts beyond May 5, 1997, or such
later date which shall not be more than five (5) business
days beyond the date as to which the Offer has been
extended, or (ii) amend the contracts to provide for
reductions in the stated purchase price of more than 5%,
without the prior written consent of RMC, which shall not be
unreasonably withheld or delayed. During the period this
letter is in effect, the Trust shall use its best efforts to
maintain and preserve intact Trust's business organization
and goodwill, to retain the services of its officers and
employees and others having business relationships with the
Trust, and shall not increase the compensation of, or accrue
any bonus to, any employee, officer or trustee of the Trust.
Furthermore, the Trust shall advise RMC in writing of all
new leases that are signed and any deferred maintenance
and/or capital improvements that should or need to be done.
I. No Solicitation. During the period from the execution
date of this Letter of Intent and continuing until the
earliest of (i) the termination of this Letter of Intent in
accordance with its terms, (ii) the completion of the Offer
or (iii) the termination of the Offer in accordance with the
terms of the Agreement, the Trust shall not, nor shall it
permit any of its officers, employees, trustees,
representatives, or agents to, directly or indirectly,
engage in any discussions with, furnish any nonpublic
information to, enter into any agreement with, respond to
any proposals from, or initiate, solicit or knowingly
encourage any inquiries or the making of any proposal from
any person or entity that may reasonably be expected to lead
to, nor enter into any agreement with or respond to any
proposals from any person or entity which constitutes or
reflects, a competing bona-fide tender offer, other
<PAGE>
acquisition proposal, merger, consolidation, share exchange,
business combination or similar transaction, or sale or
disposition of all or a material portion of the Trust's
assets or equity interests (whether or not the same is
presently outstanding) (collectively, a "Competing
Transaction"), PROVIDED, HOWEVER, that nothing in this
Letter of Intent shall prohibit the Board of Trustees of the
Trust from furnishing information to, or entering into,
maintaining or continuing discussions with, any person or
entity that makes an unsolicited proposal for a Competing
Transaction in writing after the date hereof, if the Board
of Trustees, after consultation with and based upon the
written advice of the Trust's regularly engaged independent
outside legal counsel, determines in good faith that taking
such action is required in order for the Board of Trustees
to comply with its fiduciary duty to shareholders under
applicable law and provided further that actions taken by
the Trust to obtain approval of its plan of liquidation
shall not constitute a Competing Transaction so long as such
plan does not become effective while the Letter of Intent or
the Agreement is in effect. The Trust shall immediately
notify RMC of the receipt of any such proposal and shall
keep RMC reasonably informed of the status of any such
proposal and shall obtain a confidentiality agreement from
such third party that is no less favorable to the Trust than
the confidentiality agreement with RMC, unless said party
has previously executed a confidentiality agreement with the
Trust.
J. Termination; Amendment; Waiver. This Letter of
Intent may be terminated, and the Agreement and Shareholders
Agreement contemplated hereby may be abandoned at any time
notwithstanding approval thereof, in any one or more of the
following circumstances:
(i) By mutual written consent duly authorized by the
Board of Trustees of the Trust and the Board of Directors of
RMC.
(ii) By the Trust if (a) the Trust has not received the
Evidence of Preliminary Approval in the form contemplated by
Section A above on or before March 10, 1997, or on or
before March 31, 1997, the Trust's President reasonably
determines that the Trust will not be able to fulfill its
obligations referred to in Section B above, (after giving
effect to the Transaction and its financing), or (b) the
Agreement and the Shareholders Agreement have been executed
and (I) the Offer has not commenced on or before April 7,
1997, or (II) the purchase of shares pursuant to the Offer
<PAGE>
shall not have occurred on or before May 30, 1997, unless
such purchase has not occurred because the Offer has
expired, terminated or been withdrawn according to its terms
or has been extended to allow cure by the Trust or Principal
Shareholders of any breach.
(iii) By the Trust if the Offer expires, or is
terminated or withdrawn, in each case pursuant to its terms,
without any of the Shares being purchased by RMC, or by
RMC, if notwithstanding its good faith efforts to consummate
the Offer, the Offer expires, or is terminated or withdrawn,
in each case pursuant to its terms, without any of the
Shares being purchased by RMC.
(iv) By the Trust, if it shall have received a bona
fide proposal from a third party for the Shares or
substantially all the assets of the Trust at a price and on
terms that the Board of Trustees of the Trust believes are
more favorable to the Trust's shareholders than the
transactions contemplated by this Letter of Intent, and the
Board of Trustees shall have recommended such Competing
Transaction to its shareholders or resolved to do so.
(v) By the Trust if RMC, or by RMC, if the Trust or
any of the Principal Shareholders, shall have failed to
comply in any material respect with any of the covenants and
agreements contained in this Letter of Intent, or in the
Agreement or in the Shareholders Agreement to be performed
by such party at or prior to such date of termination, and
such failure continues for ten business days after the
actual receipt by such party of a written notice from the
other party setting forth in detail the nature of such
failure, or if the representations and warranties of the
Trust or the Principal Shareholders in the Agreement or the
Shareholders Agreement were untrue or incorrect when made in
any material respect, or such representations or warranties
become and remain untrue or incorrect after the date of
execution of the Agreement in any material respect, and the
Trust or the Principal Shareholders, as the case may be,
fails to cure such untrue or incorrect representation or
warranty within ten business days after the actual receipt
by the Trust or the Principal Shareholders, as the case may
be, of written notice from RMC setting forth in detail the
nature of such untruth or omission.
(vi) By RMC, if (a) the Board of Trustees of the Trust
withdraws, modifies or changes its recommendation of this
Letter of Intent or the transactions contemplated hereby in
a manner adverse to RMC or shall have resolved to do any of
the foregoing, or (b) the Board of Trustees of the Trust
<PAGE>
shall have recommended to the shareholders of the Trust any
Competing Transaction or resolved to do so or (c) a
Competing Transaction has been proposed and the Board of
Trustees of the Trust, within ten business days after such
Competing Transaction is proposed, either fails to
recommend against acceptance by the shareholders of such
Competing Transaction, or takes no position with respect to
the acceptance by its shareholders of the Competing
Transaction.
(vii) By RMC on or before March 31, 1997, if RMC in
its sole discretion deems it inadvisable for RMC to proceed
with the Offer.
(viii) By RMC, if an unsolicited, bona fide offer for
fifty percent or more of the shares of beneficial interest
or assets of the Trust is made by a third party after March
31, 1997, and such unsolicited competing offer is not
terminated or abandoned prior to the then scheduled
expiration date of the Offer.
In addition, either RMC or the Trust may terminate the
Letter of Intent if, despite good faith negotiations by the
parties, the Agreement and the Shareholders Agreement are
not executed by all the parties thereto on or before March
31, 1997, subject to the obligations of the parties set
forth in Paragraph K below. In the event the agreements are
not executed and either RMC on the one hand, or the Trust
and one or more of the Principal Shareholders on the other
hand, have not negotiated in good faith, then this Letter of
Intent may be terminated under J (v) above by the party who
did negotiate in good faith.
K. Fees and Expenses. If this Letter of Intent or the
transactions contemplated hereby are terminated by the Trust
pursuant to Section J(iv) above, or by RMC pursuant to J(v)
or J (vi) above, then the Good Faith Deposit shall be
refunded to RMC and, in addition, the Trust shall pay RMC a
fee equal to $300,000, which fee shall be inclusive of all
expenses of RMC. Such amount is agreed upon by and between
the Trust and RMC as liquidated damages, due to the
difficulty and inconvenience of measuring actual damages and
the uncertainty thereof; and no other damages, rights or
remedies shall in any case be collectible, enforceable or
available to RMC, but RMC shall accept said sum as its total
damages and relief. In the event this Letter of Intent or
the transactions contemplated hereby are terminated by the
Trust pursuant to Sections J(ii)(b) or J(v) above, the Trust
as its sole remedy therefore shall be entitled to receive
the Good Faith Deposit as liquidated damages; provided
<PAGE>
however, that if termination is pursuant to J(ii)(a), the
Good Faith Deposit shall be returned to RMC, all costs and
expenses incurred in connection with this Letter of Intent
or the transactions contemplated hereby shall be paid by the
party incurring such costs and expenses, and no party hereto
shall have any further liability to the other of any kind.
Such amount is agreed upon by and between the Principal
Shareholders, the Trust and RMC as liquidated damages, due
to the difficulty and inconvenience of measuring actual
damages and the uncertainty thereof; and no other damages,
rights or remedies shall in any case be collectible,
enforceable or available to the Trust, or any of the
Principal Shareholders, but the Trust and the Principal
Shareholders shall accept payment to the Trust of said Good
Faith Deposit as its and their total damages and relief. In
the event this Letter of Intent terminates by its terms
pursuant to the next to the last sentence of Paragraph J
hereof, the Good Faith Deposit shall be returned to RMC,
each party shall bear its own expenses in connection with
the transaction and no party shall have any further
liability one to the other of any kind. If this Letter of
Intent is terminated pursuant to J(i), J(iii), J(vii) or
J(viii) above, the Good Faith Deposit shall be returned to
RMC, all costs and expenses incurred in connection with
this Letter of Intent or the transactions contemplated
hereby shall be paid by the party incurring such costs and
expenses, and no party shall have any further liability one
to the other of any kind. The parties agree that the
Agreement shall provide for $500,000 (rather than $300,000)
in expense reimbursement to RMC (i) in the event the
Agreement has been executed and the Offer has been
commenced, but the Offer is not consummated and the
Transaction is abandoned for the reasons specified in J(iv),
J(v) (because of a breach by the Trust or the Principal
Shareholders) or J(vi), or (ii) in the event the Offer is
made as provided herein and kept open for at least 20
business days and (A) less than two-thirds of the
outstanding Shares are validly tendered and not withdrawn by
the Principal Shareholders or (B) as the result of the
failure of Principal Shareholders holding two-thirds of the
outstanding Shares to vote in favor of an amendment of the
Trust's declaration of trust to permit a merger as
contemplated by Section A hereof, such amendment is not
adopted prior to the expiration of the Offer
L. Publicity. RMC, the Trust and the Principal
Shareholders agree that none of them will make or engage in
any press release, publicity, or other public disclosure of
the matters which are the subject of this Letter of Intent
without the prior written consent of the other parties
<PAGE>
hereto (it being understood that the Trust may consent on
behalf of Principal Shareholders in this regard), unless
such party believes in good faith upon consultation with
counsel that such press release, publicity or other public
disclosure is required by law or legal process, in which
event such party shall give the other parties hereto as much
advance notice thereof as is practicable under the
circumstances (which, in the case of notice to Principal
Shareholders and Trust, shall be deemed sufficient if notice
is given to the Trust) and shall give good faith
consideration to any comments made with respect thereto by
the other parties hereto prior to the time when such press
release, publicity or other public disclosure is made. RMC
acknowledges that, pursuant to the Trust's obligations under
the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), and its Listing Agreement with the NASDAQ,
the Trust shall issue a press release in the form attached
hereto as Annex C promptly following the full execution of
this Letter of Intent.
M. HSR Filings: Other Approvals. If required, as
promptly as practicable after the execution of the
Agreement, subject to legal requirements, RMC, the Trust and
Principal Shareholders will each use their best efforts to
cause to be filed a premerger notification under the H-S-R
Act. This Letter of Intent and the obligations of Principal
Shareholders, the Trust and RMC to consummate the
transactions contemplated by this Letter of Intent are and
shall be subject to the receipt of all necessary
governmental and regulatory approvals and consents for such
transactions and to the compliance with any and all
applicable laws. Notwithstanding the foregoing, the Trust
hereby approves of and consents to this Letter of Intent and
represents that its Board of Trustees, at a meeting duly
called and held, or in a valid and effective action by
written consent, has unanimously duly adopted this Letter of
Intent, approved the Transaction, determined that the
Transaction is fair to and in the best interest of the
Trust's shareholders, and agrees that if and when the Offer
is commenced, the Board of Trustees will recommend that the
Company's shareholders accept the Offer and tender their
shares pursuant to the Offer.
N. Confidentiality. The parties acknowledge that the
confidentiality agreement between RMC and the Trust dated
December 23, 1996 exists and shall continue in effect and
shall survive the execution and delivery of this Letter of
Intent. Notwithstanding the foregoing, the parties
understand that RMC and Financing Partner shall be entitled
to, and Trust shall cooperate with RMC and Financing Partner
<PAGE>
in their efforts to, evaluate the Transaction and shall
disclose any information related to Trust and its
shareholders or affiliates and the Transaction reasonably
requested by RMC and Financing Partner, the information that
is contemplated by Section D, and any information that is
reasonably required or appropriate in connection with any
filing made by or on behalf of RMC with the Commission, any
state securities commission, the National Association of
Securities Dealers or any affiliate thereof, or any similar
agency or organization, or otherwise in connection with any
compliance by RMC with any federal or state securities or
other laws. RMC shall use reasonable efforts to submit any
supplemental information required by the Commission, and any
other submissions to the Commission under the Securities Act
of 1933, as amended (the "Securities Act"), or the Exchange
Act, in a manner that will not cause such information to
become generally available to the public except to the
extent it is not practicable or reasonably likely that such
information or submission will remain confidential under the
rules and regulations promulgated under the Securities Act
and the Exchange Act and the practices and procedures of the
Commission.
O. Governing Law. The parties hereto acknowledge and
agree that this letter and the Agreement shall be
controlled, construed and governed by the laws of the State
of Ohio, USA without regard to principles governing
conflicts of laws.
P. Counterparts; Effectiveness of Letter. This Letter of
Intent may be executed simultaneously and in any number of
counterparts, each of which shall be deemed to be an
original but all of which together shall constitute one and
the same instrument. This Letter of Intent shall become
effective when executed by RMC, the Trust and the Principal
Shareholders listed below (persons or entities), who each
individually by their execution of this Letter of Intent
represent and warrant that they either own solely and
directly the amount of shares attributable to them in Annex
A attached hereto , or have the unrestricted ability without
the consent of any other person or entity to cause such
shares to be delivered to RMC in connection with the
Transaction. The Trust and Principal Shareholders further
represent and warrant that the shares listed on Annex A
hereto constitute at least 55% of the outstanding shares of
the Trust.
Q. Obligations of Principal Shareholders. Each Principal
Shareholder by execution of this Letter of Intent agrees
that (i) until this Letter of Intent is terminated in
<PAGE>
accordance with its terms such Principal Shareholder shall
not take any of the actions referenced in Paragraph I above,
either with respect to the Trust or any of the shares they
beneficially own, nor dispose of any Shares or enter into
any arrangements for the disposition of any Shares except as
contemplated by the Letter of Intent and (ii) in the event
the Trust executes the Agreement, RMC has not terminated the
Letter of Intent under J (vii) above, and this Letter of
Intent has otherwise not been terminated, then at such time
as the Agreement is executed, such Principal Shareholder
(and/or the person or entity through which such Principal
Shareholder beneficially owns shares) shall enter into the
Shareholders Agreement pursuant to which such Principal
Shareholders shall agree, subject to the terms and
provisions of the Shareholders Agreement and the Agreement,
to tender all Shares held or beneficially owned by the
Principal Shareholder (which shall include all the shares
listed on Annex A) in the Offer and not to withdraw them and
containing the matters referenced in Paragraph E above. The
only obligations of the Principal Shareholders under this
Letter of Intent are those set forth in Sections L, M, P
and Q.
R. Exculpatory Clause. CleveTrust Realty Investors is a
Massachusetts business trust which was organized to operate
as a real estate investment trust and is governed by the
terms of a Second Amended and Restated Declaration of Trust
dated as of February 21, 1992 and as amended by Amendment
dated February 21, 1995. No obligation of the Trust is
personally binding upon, nor shall resort be had to the
private property of any of the Trustees, shareholders,
officers, employees or agents of the Trust, but the Trust
property or a specific portion thereof only shall be bound.
S. Assignment; No Third Party Beneficiaries. The
parties acknowledge that RMC may assign its rights under
this Letter of Intent to any entity in which it or one of
its affiliates has a material ownership interest, and in
which the controlling shareholder of RMC has a key
management position, provided that such entity assumes the
obligation of RMC under this Letter of Intent, and provided,
further, that no such assignment shall release RMC from its
obligations hereunder. Otherwise, no party to this Letter
of Intent shall be entitled to assign its rights or delegate
its duties hereunder without the prior written consent of
the other parties hereto. The parties hereto acknowledge
and agree that, except for RMC, the Trust, the Principal
Shareholders, and their respective permitted successors and
assigns, no other party or entity shall have any rights or
<PAGE>
interests in or under this Letter Of Intent, the Agreement
or the Shareholders Agreement.
A Schedule of all key dates in connection with this Letter
of Intent is attached hereto as Annex D.
If RMC agrees to the terms and conditions of this Letter of
Intent, please indicate such acceptance below by executing a
copy hereof and returning such copy to the undersigned.
Very truly yours,
CLEVETRUST REALTY
INVESTORS
By: /s/ John C. Kikol
-------------------------------
John C. Kikol, President and
Chairman
Accepted and agreed to this ___ day of February, 1997, by:
RM Crowe Company
BY: /s/ Maurice Crowe, Jr.
-----------------------------
R. Maurice Crowe, Jr.
PRINCIPAL SHAREHOLDERS:
(as to Sections L, M Pand Q)
____________________________________
Howard Amster, Individually
____________________________________
Tamara Gould, Individually
(wife of Howard Amster)
Amster Trading Company
By: /s/ Howard Amster
---------------------------------
Howard Amster, President
<PAGE>
The Robert H. Kanner Deferred
Compensation Trust B
By: /s/ Stephen R. Kalette
----------------------------------
Stephen R. Kallette, Co-Trustee
_______________________________________
John C. Kikol, Individually
_________________________________________
Leighton R. Rosenthal, Individually
Woodbourne Development, L.P.
By:
--------------------------------------
Clayton Management Company,
General Partner
By: /s/ John D. Weil
-----------------------------------
John D. Weil, President
Clayton Management Company
By:
--------------------------------------
John D. Weil, President
208971.1A
<PAGE>
ANNEX A
Principal Shareholder # of Shares
Howard Amster 373,712
Robert H. Kanner 1,300,000
Leighton A. Rosenthal 393,000
John D. Weil 720,000
John C. Kikol 56,045
<PAGE>
ANNEX B
CONDITIONS TO THE OFFER
Notwithstanding any other term or provision of the Offer,
Purchaser shall not be required to accept for payment or pay
for any Shares tendered, and may terminate the Offer if, (1)
there have not been validly tendered and not withdrawn prior
to the time the Offer shall otherwise expire a number of
Shares that constitute at least ninety percent (90%) of the
Shares outstanding on a fully-diluted basis on the date of
purchase ("on a fully-diluted basis" meaning, as of any
date, the number of Shares outstanding, together with Shares
the Trust is then required to issue pursuant to obligations
outstanding at that date under employee stock option or
other benefit plans or otherwise), (2) any applicable
waiting periods under the HSR Act shall not have expired or
been terminated prior to the expiration of the Offer or any
formal investigations relating to the Offer that may have
been opened by the Department of Justice or the Federal
Trade Commission (by means of a written request for
additional information or otherwise) shall not have
terminated, or (3) at any time after (date of Agreement) and
before acceptance for payment of or the payment for such
Shares any of the following events shall have occurred.
(a) there shall be threatened, instituted or pending
any action, proceeding, application or counterclaim by
any government or governmental, legislative, regulatory
or administrative authority or agency, domestic, foreign
or supranational (each, a "Governmental Entity"), or by
any other person, domestic or foreign, before any court
or Governmental Entity, (i) (A) challenging or seeking
to, or which is reasonably likely to, make illegal,
delay or otherwise directly or indirectly restrain or
prohibit, or seeking to, or which is reasonably likely
to, impose voting, procedural, price or other
requirements, in addition to those required by Federal
securities laws, applicable Massachusetts law and the
governing documents of the Trust (each as in effect on
the date of this Offer to Purchase), in connection with,
the making of the Offer or the acceptance for payment
of, or payment for, some of or all the Shares by the
Purchaser or any affiliate of Purchaser (B) seeking to
obtain material damages or (C) otherwise directly
relating to the transactions contemplated by the Offer
(ii) seeking to prohibit the ownership or operation by
<PAGE>
the Purchaser or any affiliate of Purchaser of all or
any portion of the business or assets of the Trust or of
the Purchaser or any affiliate of Purchaser or to compel
the Purchaser or any affiliate of the Purchaser to
dispose of or hold separate all or any portion of the
business or assets of the Trust or of the Purchaser or
any affiliate of the Purchaser or seeking to impose any
limitation on the ability of the Purchaser or any
affiliate of the Purchaser to conduct such business or
own such assets, (iii) seeking to impose or confirm
limitations on the ability of the Purchaser or any
affiliate of the Purchaser effectively to exercise full
rights of ownership of the Shares, including, without
limitation, the right to vote any Shares acquired or
owned by the Purchaser or any affiliate of the Purchaser
on all matters properly presented to the Trust's
shareholders, (iv) seeking to require divestiture by the
Purchaser or any other affiliate of Purchaser of any
Shares, (v) seeking any material diminution in the
benefits expected to be derived by the Purchaser or any
affiliate of the Purchaser as a result of the
transactions contemplated by the Offer or any merger or
other similar business combination with the Trust; or
(vi) in the reasonable judgment of the Purchaser, has or
is reasonably likely to have a material adverse effect
on the business, properties, assets, liabilities,
capitalization, stockholders' equity, condition
(financial or otherwise), operations, licenses or
franchises, results of operations or prospects of the
Trust or any of its subsidiaries, the value of the Trust
or the value of the Trust shares to the Purchaser;
(b) there shall be any action taken, or any statute,
rule, regulation, legislation, interpretation, judgment,
order or injunction proposed, enacted, enforced,
promulgated, amended, issued or deemed applicable to (i)
the Purchaser or any affiliate of the Purchaser or the
Trust or (ii) the Offer or any merger or other similar
business combination by the Purchaser or any affiliate
of the Purchaser with the Trust, by any court of
Governmental Entity, other than the routine application
of the waiting period provisions of the HSR Act to the
Offer, that, in the reasonable judgment of the
Purchaser, results in or is reasonably likely to result
in any of the effects or consequences referred to in
clauses (i) through (vi) of paragraph (a) above;
(c) the Purchaser shall have become aware of any facts
that, in the reasonable judgment of the Purchaser, have
or are reasonably likely to have any of the effects or
<PAGE>
consequences referred to in clauses (i) through (vi) of
paragraph (a) above, in each case as compared to
information actually known to Purchaser (or its
designated agents involved in the transaction) prior to
(date of the Agreement), or any change, event or
condition shall have occurred or been threatened (or any
condition, event or development shall have occurred or
been threatened involving a prospective change) in the
business, properties, assets, liabilities,
capitalization, shareholders' equity, condition
(financial or otherwise), operations, licenses or
franchises, results of operations or prospects of the
Trust or any of its subsidiaries that, in the reasonable
judgment of the Purchaser, is or is reasonably likely to
result in any of the effects or consequences referred to
in clauses (i) through (vi) of paragraph (a) above;
(d) there shall have occurred or been threatened (i)
any general suspension of trading in, or limitation on
prices for, securities on any national securities
exchange or in the over-the-counter market in the United
States, (ii) any extraordinary or material adverse
change in the financial markets or major stock exchange
indices in the United States or abroad or in the market
price of shares, (iii) any fundamental change in the
general political, market, economic or financial
conditions in the United States or abroad that will, in
the reasonable judgment of the Purchaser, have a
material adverse effect upon the business, properties,
assets, liabilities, capitalization, stockholders'
equity, condition (financial or otherwise), operations,
licenses or franchises, results of operations or
prospects of the Trust or the trading in, or value of,
the Shares, (iv) a declaration of a banking moratorium
or any suspension of payments in respect of banks in the
United States, (v) any limitation (whether or not
mandatory) by any Governmental Entity on, or other event
that, in the reasonable judgment of the Purchaser, is
reasonably likely to affect, the extension of credit by
banks or other lending institutions, (vi) a commencement
of a war or armed hostilities or other national or
international calamity directly or indirectly involving
the United States or (vii) in the case of any of the
foregoing existing at the time of the commencement of
the Offer, a material acceleration or worsening thereof;
(e) the Trust or any of its subsidiaries shall have
(i) split, combined or otherwise changed, or authorized
or proposed a split, combination or other change of, the
Shares or its capitalization, (ii) acquired or otherwise
caused a reduction in the number of, or authorized or
proposed the acquisition or other reduction in the
number of, outstanding Shares or other securities, (iii)
issued or sold, or authorized or proposed the issuance,
distribution or sale of, additional Shares, shares of
any other class of capital stock, other voting
securities or any securities convertible into, or
rights, warrants or options, conditional or otherwise,
to acquire, any of the foregoing, (iv) declared or paid,
or proposed to declare or pay, any dividend or other
distribution, whether payable in cash, securities or
other property, on or with respect to any shares of
capital stock of the Trust, (v) altered or proposed to
alter any material term of any outstanding security,
(vi) incurred any debt other than in the ordinary course
of business, (vii) authorized, recommended, proposed or
entered into an agreement with respect to any merger,
consolidation, liquidation, dissolution, business
combination, acquisition of a material amount of assets,
disposition of a material amount of assets or release or
relinquishment of any material contractual or other
right of the Trust, or entered into any agreement or
amended any existing agreement that in the reasonable
judgment of Purchaser has or is reasonably likely to
have a material adverse effect on the business,
properties, assets, liabilities, capitalization,
shareholder equity, condition (financial or otherwise),
operations, licenses or franchises, results of
operations or prospects of the Trust, the value of the
Trust or the value of the shares to the Purchaser,
(viii) entered into any employment, severance or similar
agreement, arrangement or plan with or for the benefit
of any of its employees other than in the ordinary
course of business or entered into or amended any
agreements, arrangements or plans so as to provide for
increased or accelerated benefits to the employees as a
result of or in connection with the transactions
contemplated by the Offer; (ix) except as may be
required by law, taken any action to terminate or amend
any employee benefit plan (as defined in Section 3(2) of
the Employee Retirement Income Security Act of 1974 as
amended) of the Trust, or (x) except as contemplated by
paragraph (k) below amended, or authorized or proposed
any amendment to, its Declaration of Trust or its
bylaws, or the Purchaser shall become aware that the
Trust or any of its subsidiaries shall have proposed or
adopted any such amendment that was not disclosed in
publicly available filings prior to March 31, 1997;
<PAGE>
(f) a tender, exchange or other offer for fifty
percent (50%) or more of the outstanding Shares shall
have been made or publicly proposed to be made by any
other person (including the Trust or any of its
subsidiaries or affiliates, but excluding the
Purchaser); or it shall have been publicly disclosed or
the Purchaser shall have otherwise learned that (i) any
person, entity (including the Trust or any of its
subsidiaries, but excluding the Purchaser) or "group"
(within the meaning of Section 13(d)(3) of the Exchange
Act) shall have acquired or proposed to acquire
beneficial ownership of more than 50% of any class or
series of capital stock of the Trust (including the
Shares), through the acquisition of stock, the formation
of a group or otherwise, or shall have been granted any
right, option or warrant, conditional or otherwise, to
acquire beneficial ownership of more than fifty percent
(50%) of any class or series of capital stock of the
Trust (including the Shares), other than acquisitions
for bona fide arbitrage purposes only and other than as
disclosed in a Schedule 13D or 13G on file with the
Commission prior to March 31, 1997, (ii) any such
person, entity or group that prior to March 31, 1997, ,
had filed such a Schedule with the Commission has
acquired or proposes to acquire, through the acquisition
of stock, the formation of a group or otherwise,
beneficial ownership of fifty percent (50%) or more of
any class or series of capital stock of the Trust
(including the Shares), or shall have been granted any
right, option or warrant, conditional or otherwise, to
acquire beneficial ownership of fifty percent (50%) or
more of any class or series of capital stock of the
Trust (including the Shares), (iii) any person or group
(other than the Purchaser) shall have entered into a
definitive agreement or an agreement in principle or
made a proposal with respect to a tender offer or
exchange offer or a merger, consolidation or other
business combination with or involving the Trust or (iv)
any person (other than the Purchaser) shall have filed a
Notification and Report Form under the HSR Act (or
amended a prior filing to increase the applicable filing
threshold set forth therein) or made an offer or
proposal or a public announcement reflecting an intent
to acquire the Trust or fifty percent (50%) or more of
the equity or the assets of the Trust;
(g) any approval, permit, license, authorization,
favorable review or consent of any Governmental Entity
or any other person or entity that would be required for
the acquisition or ownership of the Shares by the
<PAGE>
Purchaser as described herein shall not have been
obtained on terms satisfactory to Purchaser in its
reasonable discretion, or any other approval permit,
license, authorization, favorable review or consent
deemed desirable by Purchaser in connection with the
transaction shall not have been obtained on terms
satisfactory to Purchaser in its reasonable discretion,
if the failure to obtain the same, in the reasonable
judgment of Purchaser, has or is reasonably likely to
have a material adverse effect on the business,
properties, assets, liabilities, capitalization,
shareholders equity, condition (financial or otherwise),
operations, licenses or franchises, results of
operations or prospects of the Trust, the value of the
Trust, or the value of the shares in the Trust to the
Purchaser.
(h) the Purchaser shall have reached an agreement or
understanding with the Trust providing for termination
of the Offer, or the Purchaser or any affiliate of
Purchaser shall have entered into a definitive agreement
or announced an agreement in principle with the Trust
providing for a merger or other business combination
with the Trust or the purchase of stock or assets of the
Trust;
(i) the representations and warranties of the Trust or
the Principal Shareholders in the Agreement or the
Shareholders Agreement were untrue or incorrect when
made in any material respect, or such representations or
warranties become and remain untrue or incorrect after
the date of such agreement in any material respect and
the Trust fails to cure such untrue or incorrect
representation or warranty within ten (10) business days
after the actual receipt by the Trust of written notice
from the Purchaser setting forth in detail the nature of
such untruth or omission;
(j) the Trust or the Principal Shareholders shall have
breached or failed to comply in any material respect
with any of its or their obligations under the Agreement
or the Shareholders Agreement and, with respect to any
such breach or failure that can be remedied, the breach
or failure is not remedied within 10 business days after
the Purchaser has furnished the Trust written notice of
such breach or failure; or
(k) In the event Purchaser shall contemplate effecting
or causing to be effected a merger or business
combination involving the Trust following consummation
<PAGE>
of the Offer (including, without limitation, a merger of
the Trust into Purchaser or an affiliate of Purchaser)
pursuant to which the shareholders of the Trust other
than Purchaser or its affiliates shall receive an amount
in cash equal to the amount per share paid in the Offer,
and either (A) such merger and business combination
shall not be permitted under applicable law and the
governing documents of the Trust (or such governing
documents shall not have been amended prior to the
expiration of the Offer to permit such business
combination or merger), or (B) Purchaser shall not have
received prior to the expiration of the Offer, an
opinion of reputable Massachusetts counsel reasonably
satisfactory to it, to the effect that such merger or
business combination is permitted and will be valid and
effective under Massachusetts law; or
(l) The [this] Agreement or the Shareholders Agreement
is terminated in accordance with its terms; which in the
reasonable judgment of the Purchaser in any such case
makes it inadvisable to proceed with the Offer and/or
with such acceptance for payment or payments.
The foregoing conditions are for the sole benefit of
Purchaser and may be asserted by the Purchaser regardless of
the circumstances giving rise to any such condition or may
be waived by the Purchaser in whole or in part at any time
and from time to time in its sole discretion. The failure
by the Purchaser at any time to exercise any of the
foregoing rights will not be deemed a waiver of any such
right, the waiver of any such right with respect to
particular facts and circumstances will not be deemed a
waiver with respect to any other facts and circumstances and
each such right will be deemed an ongoing right that may be
asserted at any time and from time to time. Any
determination by the Purchaser concerning the events
described in this [Annex] will be final and binding upon all
parties.
<PAGE>
ANNEX C
NEWS RELEASE
FOR IMMEDIATE RELEASE
CLEVETRUST REALTY INVESTORS
ANNOUNCES PROPOSED PURCHASE OFFER FROM
RM CROWE COMPANY
Westlake, Ohio, FEBRUARY 20, 1997 -- John C. Kikol, Chairman
and President of CleveTrust Realty Investors (CTRIS-Nasdaq),
announced today that the Trust, certain major shareholders of the
Trust, and RM Crowe Company, a Texas Corporation ("RMC"), have
executed a letter of intent which provides that RMC, the Trust,
and such shareholders intend to negotiate definitive agreements
pursuant to which RMC would acquire all of the outstanding shares
of beneficial interest of the Trust at a price of Six Dollars and
Forty-Two Cents ($6.42) per share, in cash. The letter of intent
provides that RMC shall have until March 31, 1997, to conduct a
due diligence investigation. To evidence its good faith, RMC has
deposited Three Hundred Thousand Dollars ($300,000) in an escrow
account. RMC has the sole discretion to terminate the letter of
intent on or before March 31, 1997, and the $300,000 will be
refunded. Assuming RMC does not terminate the letter of intent
on or before March 31, 1997 and RMC satisfactorily completes its
due diligence, the $300,000 escrow deposit will become
nonrefundable, except in certain specified instances. The Trust,
RMC, and certain major shareholders of the Trust, intend to enter
into mutually acceptable definitive agreements providing for the
share purchase. It is anticipated that, if the principal parties
execute a definitive agreement, RMC would make a tender offer for
all the Trust's shares in April, 1997. The Trustees have
unanimously approved the terms of the letter of intent and have
agreed, in the event a definitive agreement is executed by the
Trust, they will enter into an agreement to tender the shares
they own in the tender offer. The Trustees and certain family
members hold directly or indirectly approximately 70% of the
outstanding shares. It is anticipated that the Trust's Board of
Trustees will unanimously recommend acceptance of the tender
offer to the shareholders once the definitive agreement is
executed.
<PAGE>
The definitive agreement to make the tender offer, if executed,
will be subject to many conditions customary in such
transactions, and there can be no assurances that the definitive
agreement will be executed, or that the tender offer will be
commenced or completed. The letter of intent provides that it
may be terminated in certain circumstances. The Trust has the
right to terminate the Letter of Intent if RMC is unable to
furnish it with evidence of preliminary approval of RMC's
financing for the transaction on or before March 10, 1997. If
the letter of intent is terminated because the Trust recommends a
competing offer or because the Trust breaches the terms of the
letter of intent, the $300,000 good faith deposit will be
refunded and the Trust will be required to pay RMC liquidated
damages of $300,000.
The letter of intent states that it is expected that the
definitive agreement provide that RMC need not consummate the
tender offer unless at least 90% of the outstanding shares are
tendered. RMC has indicated to the Trust that, if the tender
offer is completed, RMC may desire to complete a merger to
acquire, for the same consideration per share as paid in the
tender offer, any shares not tendered. The consummation of the
tender offer will be subject to the condition that if necessary
the Trust will adopt an amendment to its declaration of trust to
permit such a merger.
The Trust announced that the Annual Shareholders' Meeting
scheduled for February 25, 1997, has been rescheduled for April
29, 1997. The shareholders will be asked to approve an amended
employment contract for Mr. Kikol and the previously announced
proposed plan of liquidation which would not become effective if
the tender offer is completed. The Trustees have previously
agreed to vote in favor of the amended employment agreements and
the plan of liquidation. It was previously announced that the
estimated proceeds from the three-year plan of liquidation would
be in the range of $5.75 to $6.50 per share. This is a forward
looking statement, and the actual results could be affected by
many factors, including demand and availability in the market for
the type and location of properties owned by the Trust and the
availability and terms of financing for commercial real estate.
Finally, as announced previously, the Trust has executed sales
contracts for three properties, with potential sales proceeds of
approximately $14,100,000 in the aggregate. The letter of intent
will not affect these sales, although there can be no assurance
that the prospective buyers will ultimately complete the
transactions.
# # # #
<PAGE>
ANNEX D
Requirement Date Due (Completed)
Evidence of Preliminary
Approval of Financing Partner 3/10/97
End of Due Diligence 3/31/97
Execution of Tender Offer Agreement 3/31/97
Commencement of Tender Offer 4/07/97
Initial Completion Date for
Tender Offer 5/05/97
Final Date for Completion of
Tender Offer 5/30/97
Date for Commencement of Additional
Purchase Price 5/06/97
