Providing for a long-term cooperative agreement under which the two companies will collaborate in developing new opportunities and revenue streams for each other, Kranzco Realty Trust, a real estate investment trust, and New America International (NAI), an affiliation of commercial real estate brokerage and related services firms, have executed a letter of intent to enter into a strategic alliance that will recapitalize NAI as a public company which will be 9.8% owned by Kranzco.

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NAI's recapitalization will occur in two stages. Kranzco will first conduct an exchange offer for 80% of the outstanding common stock of NAI and, in exchange for the common stock, Kranzco will issue convertible subordinated notes, convertible into common shares of Kranzco.

Secondly, Kranzco will spin off approximately 88% of its shares of NAI - which is estimated to be approximately 12 million shares, or 70.2% of all outstanding shares of NAI - to its existing shareholders on a one-for-one basis. In conjunction with the spin-off, NAI will issue rights to all of its then shareholders on a one-for-one basis to acquire additional shares of common stock of NAI.

Kranzco will own approximately 9.8% of the shares of NAI, Kranzco shareholders will own 70.2% and the current owners of NAI will own approximately 20% upon completion of the recapitalization. NAI intends to apply to list its common shares on NASDAQ or the OTC Bulletin Board.

Upon completion of the exchange offer, the board of directors of NAI will be reconstituted to include seven members representing both Kranzco and NAI. Norman M. Kranzdorf will serve as chairman, but management at NAI is expected to remain unchanged under the direction of Gerald Finn, CEO, and Jeffrey Finn, COO.