Auction Results

1. The successful bidder at the auction was TIC Property Management, LLC (“TPM”). TIP bid on both acquiring the 1% interests held by DBSI and the right to negotiate for an assumption of the master lease. TPM is taking the position that they intend to purchase the 1% interests in all of the properties even if they do not become the asset manager/master tenant for any property. This will require two actions on the part of investors: — immediate notice to TPM of their limited role as DBSI’s successor and their obligations to the other TIC owners. — immediate amendment to the TIC agreement to clarify TPM’s role as DBSI’s successor as a TIC owner.

2. We have received DBSI’s proposed form of assignment agreement for the Option 2 properties. As you might expect, they did not strictly follow the auction requirements and tried to expand the form of assignment to protect their position. We have objected to their form and submitted a revised copy of same to the court. 3. TPM most likely will approach investors and try to negotiate an assumption agreement. Counsel has reviewed their forms of asset management and master lease agreements, and they contain many unfavorable provisions (increased fees, minimum term, termination fees, etc.). Finally, it appears that none of the lenders has indicated a desire of any TIC group to approve TPM as a replacement master tenant or asset manager.