CARLYLE REAL ESTATE LTD PARTNERSHIP XIII - 10-Q Quarterly Report

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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

Quarterly Report Under Section 13 or 15(d)
of the Securities Exchange Act of 1934

For the quarter ended September 30, 2002 Commission file #0-12791

CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XIII
(Exact name of registrant as specified in its charter)

Illinois 36-3207212
(State of organization) (IRS Employer Identification No.)

900 N. Michigan Ave., Chicago, IL 60611
(Address of principal executive office) (Zip Code)

Registrant's telephone number, including area code 312/915-1987

Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes [ X ] No [ ]

TABLE OF CONTENTS

PART I FINANCIAL INFORMATION

Item 1. Financial Statements . . . . . . . . . . . . . . . 3

Item 2. Management's Discussion and Analysis of
Financial Condition and Results of
Operations . . . . . . . . . . . . . . . . . . . . 12

Item 4. Controls and Procedures. . . . . . . . . . . . . . 17

PART II OTHER INFORMATION

Item 3. Defaults on Senior Securities. . . . . . . . . . . 18

Item 6. Exhibits and Reports on Form 8-K . . . . . . . . . 18

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XIII
(A LIMITED PARTNERSHIP)

BALANCE SHEETS
SEPTEMBER 30, 2002 AND DECEMBER 31, 2001
(UNAUDITED)

ASSETS
------
SEPTEMBER 30, DECEMBER 31,
2002 2001
------------- -----------
Current assets:
Cash and cash equivalents . . . . . $ 3,200,378 3,409,779
Other receivables . . . . . . . . . 22,857 22,269
------------ ------------
Total current assets. . . . . 3,223,235 3,432,048

Other assets. . . . . . . . . . . . . -- 105,188
------------ ------------
$ 3,223,235 3,537,236
============ ============

LIABILITIES AND PARTNERS' CAPITAL ACCOUNTS (DEFICITS)
-----------------------------------------------------

Current liabilities:
Accounts payable and
accrued expenses. . . . . . . . . $ 703,726 230,250
------------ ------------
Total current liabilities . . 703,726 230,250

Distributions received in excess
of recorded investment . . . . . . . -- 661,228
------------ ------------
Commitments and contingencies

Total liabilities . . . . . . 703,726 891,478
------------ ------------

Partners' capital accounts (deficits):
General partners:
Capital contributions . . . . . . 1,000 1,000
Cumulative net earnings (losses). 1,193,614 1,223,379
Cumulative cash distributions . . (1,149,967) (1,149,967)
------------ ------------
44,647 74,412
------------ ------------
Limited partners:
Capital contributions,
net of offering costs . . . . . 326,224,167 326,224,167
Cumulative net earnings (losses). (262,677,367) (262,580,883)
Cumulative cash distributions . . (61,071,938) (61,071,938)
------------ ------------
2,474,862 2,571,346
------------ ------------
Total partners' capital
accounts (deficits) . . . . 2,519,509 2,645,758
------------ ------------
$ 3,223,235 3,537,236
============ ============

See accompanying notes to financial statements.

CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XIII
(A LIMITED PARTNERSHIP)

STATEMENTS OF OPERATIONS
THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2002 AND 2001
(UNAUDITED)

CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XIII
(A LIMITED PARTNERSHIP)

STATEMENTS OF CASH FLOWS

NINE MONTHS ENDED SEPTEMBER 30, 2002 AND 2001
(UNAUDITED)

2002 2001
---------- ----------
Cash flows from operating activities:
Net earnings (loss) . . . . . . . . . $ (126,249) 3,513,625
Items not requiring (providing)
cash or cash equivalents:
Partnership's share of the
reduction of the maximum
unfunded obligation under
and income related to the
termination of the
indemnification agreement . . . . -- (3,572,177)
Partnership's share of gains on
sale of indirect partnership
interests . . . . . . . . . . . . (823,848) (343,038)
Changes in:
Other receivables . . . . . . . . . (983) 2,576
Other assets. . . . . . . . . . . . 1,427 --
Accounts payable and
accrued expenses. . . . . . . . . 473,476 20,641
---------- ----------
Net cash provided by (used in)
operating activities. . . . . (476,177) (378,373)
---------- ----------

Cash flows from investing activities:
Partnership's distributions from
unconsolidated ventures . . . . . . 3,747 1,435,704
Cash proceeds from Partnership's
share of gains on sale of
indirect partnership interests. . . 159,268 343,038
Return of Partnership's advance
to affiliated entity. . . . . . . . 103,761 --
---------- ----------
Net cash provided by (used in)
investing activities. . . . . 266,776 1,778,742
---------- ----------
Net increase (decrease)
in cash and cash
equivalents . . . . . . . . . (209,401) 1,400,369
Cash and cash equivalents,
beginning of year . . . . . . 3,409,779 2,162,172
---------- ----------
Cash and cash equivalents,
end of period . . . . . . . . $3,200,378 3,562,541
========== ==========

Supplemental disclosure of cash
flow information:
Non-cash activities:
Recognition of reduction of dis-
tributions received in excess
of recorded investment as gain. . $ 661,228 --
========== ==========

See accompanying notes to financial statements.

CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XIII
(A LIMITED PARTNERSHIP)

NOTES TO FINANCIAL STATEMENTS

SEPTEMBER 30, 2002 AND 2001

(UNAUDITED)

GENERAL

Readers of this quarterly report should refer to the Partnership's
audited financial statements for the fiscal year ended December 31, 2001,
which are included in the Partnership's 2001 Annual Report on Form 10-K
(File No. 0-12791) filed on April 1, 2002, as certain footnote disclosures
which would substantially duplicate those contained in such audited
financial statements have been omitted from this report. Capitalized terms
used but not defined in this quarterly report have the same meanings as in
the Partnership's 2001 Annual Report on Form 10-K.

The preparation of financial statements in accordance with GAAP
requires the Partnership to make estimates and assumptions that affect the
reported or disclosed amount of assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those
estimates.

TRANSACTIONS WITH AFFILIATES

The Partnership, pursuant to the Partnership Agreement, is permitted
to engage in various transactions involving the Corporate General Partner
and its affiliates, including the reimbursement for salaries and salary-
related expenses of its employees and certain of its officers, and for
other direct expenses relating to the administration of the Partnership and
the operation of the Partnership's investment properties. Fees,
commissions and other expenses required to be paid by the Partnership to
the General Partners and their affiliates for the nine months ended
September 30, 2002 and 2001 were as follows:

Unpaid at
September 30,
2002 2001 2002
-------- ------ -------------
Reimbursement (at cost) for
out-of-pocket salary and
salary-related expenses. . . . . $107,577 66,242 23,973
======== ====== ======

JMB/NYC

JMB/NYC was a limited partnership among Carlyle-XIII Associates, L.P.,

and its affiliates, Carlyle-XIV Associates, L.P. and Property Partners,
L.P., as limited partners and Carlyle Managers, Inc. as the sole general
partner. The Partnership was a 25% shareholder of Carlyle Managers, Inc.
and held, indirectly as a limited partner of Carlyle-XIII Associates, L.P.,
an approximate 25% limited partnership interest in JMB/NYC. The sole
general partner of Carlyle-XIII Associates, L.P. was Carlyle Investors,
Inc., of which the Partnership was a 25% shareholder. The general partner
in each of JMB/NYC and Carlyle-XIII Associates, L.P. was an affiliate of
the Partnership. JMB/NYC, Carlyle-III Associates, L.P., Carlyle Managers,
Inc. and Carlyle Investors, Inc. were dissolved and terminated in September
and October 2002.

As a result of the 1996 restructuring, JMB/NYC had an indirect limited
partnership interest which, before taking into account significant
preferences to other partners, equaled approximately 4.9% of the
reorganized and restructured ventures owning 237 Park and 1290 Avenue of
the Americas (collectively, the "Properties"). Neither O&Y nor any of its
affiliates retained any direct or indirect continuing interest in the
Properties. The new ownership structure gave control of the Properties to
an unaffiliated real estate investment trust ("REIT"), owned primarily by
holders of the first mortgage debt that encumbered the Properties prior to
the bankruptcy. JMB/NYC had, under certain limited circumstances, through
January 1, 2001 rights of consent regarding sale of the Properties or the
consummation of certain other transactions that would have significantly
reduced indebtedness of the Properties. In general, at any time on or
after January 2, 2001, an affiliate of the REIT had the right to purchase
JMB/NYC's interest in the Properties for an amount based on a formula
relating to the operations of the Properties (the "Formula Price").

The restructuring and reorganization discussed above eliminated any
potential additional obligation of the Partnership in the future to provide
additional funds under its previous joint venture agreements (other than
that related to a certain indemnification agreement provided in connection
with such restructuring).

Pursuant to an indemnification agreement, the Affiliated Partners were
jointly and severally obligated to indemnify the REIT to the extent of $25
million to ensure their compliance with the terms and conditions relating
to JMB/NYC's indirect limited partnership interests in the restructured and
reorganized joint ventures that owned the Properties. The Affiliated
Partners contributed approximately $7,800,000 (of which the Partnership's
share was approximately $1,900,000) to JMB/NYC, which was deposited into an
escrow account as collateral for such indemnification. These funds were
invested in stripped U.S. Government obligations with a maturity date of
February 15, 2001. Subsequent to that date, the remaining escrowed funds
were invested in short-term U.S. Government obligations. Due to the
Restructuring discussed below, during 1999 the maximum potential obligation
was reduced to $14,285,000 and a portion of the collateral (approximately
$4,460,000 in face amount) was released in 1999 to JMB/NYC. On March 23,
2001, JMB/NYC's indirect interest in the 1290 Partnership was sold, and as
a result, the indemnification obligation was terminated and the remaining
collateral (approximately $5,700,000 face amount of which the Partnership's
share was approximately $1,436,000) was released in March 2001 to JMB/NYC.
The Partnership's share of the reduction of the maximum unfunded obligation
under the indemnification agreement recognized as income during the years
1999, 2000 and 2001 was a result of (i) interest earned on amounts
contributed by the Partnership and held in escrow by JMB/NYC, (ii) the
Partnership's share of the agreed upon reduction of the maximum obligation
in November 1999 in connection with the Restructuring discussed below, and
(iii) the Partnership's share of the remaining indemnification obligation
that was released in March 2001 in connection with the sale of JMB/NYC's
indirect interest in the 1290 Partnership. Interest income earned reduced
the Partnership's share of the maximum unfunded obligation under the
indemnification agreement, which had been reflected as a liability.

In November 1999, JMB/NYC closed a transaction (the "Restructuring")
pursuant to which, among other things, JMB/NYC's interests in 237 Park
Avenue ("237 Park") and 1290 Avenue of the Americas ("1290 Avenue of the
Americas") were restructured. Under the Restructuring, the partnership
that owned 237 Park was converted to a limited liability company ("237 Park
LLC"). The membership interest in 237 Park LLC owned by 237/1290 Upper
Tier Associates, L.P. (the "Upper Tier Partnership"), in which JMB/NYC was
a limited partner with a 99% interest, was contributed to a partnership
(the "237 Partnership") that acquired the other membership interests in 237
Park LLC from the REIT and one of its affiliates. In exchange for the
interest in 237 Park LLC, the Upper Tier Partnership received a limited
partnership interest in the 237 Partnership having a fair market value
(determined in accordance with the partnership agreement of the 237
Partnership) of approximately $500,000. (JMB/NYC's total investment in the

237 Partnership was significantly less than 1% of the 237 Partnership.)
The 237 Partnership owned a portfolio of investments in addition to 237
Park. JMB/NYC had the right, during the month of July of each calendar
year commencing with 2001, to cause a sale of the interest in the 237
Partnership for a price equal to the greater of the fair market value of
such interest (determined in accordance with the partnership agreement of
the 237 Partnership) and a specified amount, of which JMB/NYC's share would
be $500,000. JMB/NYC elected not to exercise its right to cause a sale of
its interest in the 237 Partnership during July 2001. In addition, the
general partner of the 237 Partnership had the right, during the month of
January of each calendar year commencing with 2002, to purchase the
interest in the 237 Partnership for a price equal to the greater of the
fair market value of such interest (determined as described above) and a
specified amount, of which JMB/NYC's share would be $650,000. In January
2002, the general partner of the 237 Partnership exercised its right to
acquire JMB/NYC's indirect interest in the 237 Partnership and JMB/NYC
received $650,000 in sale proceeds. Such amount was paid to the limited
partners of JMB/NYC as holders of a tranche of the Purchase Note as
discussed below. The Partnership received its share of sale proceeds,
approximately $159,000 in March 2002. Due to the January 2002 sale of the
Partnership's indirect interest in the 237 Partnership, which was the
Partnership's last investment property, the distributions received in
excess of recorded investment were reduced to zero and included as part of
the gain on sale in 2002. The distributions received in excess of recorded
investment were created by the 1999 retirement of the Partnership's
obligations to fund, on demand, $200,000 and $200,000 to Carlyle Investors,
Inc. and Carlyle Managers, Inc., respectively, of additional paid-in
capital. Such obligations when retired included accrued but unpaid
interest.

JMB/NYC's indirect interest through the Upper Tier Partnership in the
partnership (the "1290 Partnership") that owned 1290 Avenue of the Americas
was also modified, although the REIT continued to own the controlling
interest in the property. In general, the REIT had the right to sell 1290
Avenue of the Americas or engage in certain other transactions during the
period January 1, 2000 through February 28, 2001, provided that JMB/NYC
received the greater of (i) an amount based on a formula relating to the
operations of the property (the "1290 Formula Price") and (ii) $4,500,000.
No such transaction occurred during that period. An affiliate of the REIT
also had the right, during the month of March of each calendar year
commencing with 2001, to purchase JMB/NYC's indirect interest in the 1290
Partnership for the greater of (x) the 1290 Formula Price and (y)
$1,400,000. On March 2, 2001, JMB/NYC was notified that an affiliate of
the REIT intended to exercise its right to purchase JMB/NYC's indirect
interest in the 1290 Partnership and on March 23, 2001, the sale was
completed and JMB/NYC received approximately $1,400,000 at closing (of
which the Partnership's share was approximately $340,000). Such amount was
paid in May of 2001 to the limited partners of JMB/NYC as holders of a
tranche of the Purchase Note as discussed below. In addition, JMB/NYC
received the remaining collateral (approximately $5,700,000, of which the
Partnership's share was approximately $1,436,000) held pursuant to the
indemnification agreement, including interest earned thereon, upon closing
of the sale of its interest in the 1290 Partnership. The Partnership
received its share of the sale proceeds and collateral amount in May 2001.

A portion of the purchase price for JMB/NYC's indirect interests in
the 1290 Avenue of the Americas and 237 Park Avenue office buildings was
represented by a certain promissory note (the "Purchase Note") bearing
interest at 12-3/4% per annum. The Purchase Note was secured by JMB/NYC's
indirect interests in the 237 Partnership (prior to its sale in January
2002) and the 1290 Partnership (prior to its sale in March 2001) owned
through the Upper Tier Partnership and was non-recourse to JMB/NYC. The
Purchase Note required payment of principal and interest out of
distributions made to JMB/NYC from the 1290 Partnership and the 237
Partnership and proceeds from sales of JMB/NYC's indirect interests in
those partnerships. Unpaid interest accrued and was deferred, compounded
monthly. Unpaid principal and interest were due at maturity on January 2,
2001. As expected, JMB/NYC did not have funds to pay the Purchase Note at

its maturity. The limited partners of JMB/NYC, as creditors, and the
holder of the Purchase Note agreed to certain steps if the Purchase Note
were not repaid within one year of its maturity as discussed below. The
outstanding principal and accrued and deferred interest on the Purchase
Note at the date of debt forgiveness and final liquidation and termination
of JMB/NYC, September 30, 2002, was approximately $186,347,000, including
interest at the default rate (as defined) of 12-3/4% per annum.

In December 1999, the Affiliated Partners advanced a total of
approximately $425,000 (of which the Partnership advanced approximately
$105,000) to the limited partners of JMB/NYC, which was used to acquire a
$5,425,000 tranche of the Purchase Note and the related security agreement
for the collateralization of such tranche. As a result of this purchase,
such limited partners, as creditors of JMB/NYC, were entitled to receive up
to $5,425,000 in proceeds otherwise payable to JMB/NYC in respect of its
indirect interests in the 1290 Partnership or the 237 Partnership, which
were owned through the Upper Tier Partnership. Such amounts received by
the limited partners generally were distributable to the Affiliated
Partners in proportion to their respective advances made to purchase the
tranche (i.e., 25% to the Partnership and 75% in the aggregate to the other
Affiliated Partners). In connection with their purchase of the $5,425,000
tranche of the Purchase Note, the limited partners of JMB/NYC agreed with
the holder of the Purchase Note that in the event JMB/NYC had not repaid
all amounts due and owing under the Purchase Note within one year after its
maturity on January 2, 2001, the holder would take the appropriate steps
necessary to foreclose upon and obtain JMB/NYC's interest in the Upper Tier
Partnership in lieu of seeking any other damages. After the sales of
JMB/NYC's indirect interests in the 1290 Partnership and the 237
Partnership, which were the primary assets of the Upper Tier Partnership,
and the application of JMB/NYC's share of the proceeds from such sales to
amounts due under the Purchase Note, which did not repay the entire amount
of the tranche of the Purchase Note acquired by the limited partners of
JMB/NYC, there were no significant assets, if any, securing repayment of
the balance due under the Purchase Note, which was considered
uncollectible. Accordingly, the holder did not seek to foreclose on
JMB/NYC's interest in the Upper Tier Partnership. The Partnership received
$103,761 in May of 2002 as a return of its December 1999 advance to the
limited partners of JMB/NYC. JMB/NYC recognized gain on debt forgiveness
for financial reporting purposes during September 2002 and Federal income
tax purposes during 2002 equal to the remaining unpaid principal and
accrued interest on the Purchase Note of approximately $186,347,000 and
$62,216,000, respectively. For Federal income tax purposes the
Partnership's share of such gain is expected to be approximately
$15,505,000. During 1996, the Partnership discontinued the equity method
of accounting for JMB/NYC for financial reporting purposes. Therefore, the
Partnership did not recognized a portion of JMB/NYC's share of the gain
related to the Purchase Note for financial reporting purposes.

1001 FOURTH AVENUE PLAZA

On or about October 13, 2000, the Corporate General Partner of the
Partnership received a demand letter and notice of planned environmental
remedial activities from counsel for National Office Partners Limited
Partnership (hereinafter, "NOP"). In the notice, NOP advised the
Partnership that NOP had discovered contamination on a site adjacent to the
office building formerly known as the 1001 Fourth Avenue Plaza office
building (the "1001 Property"). The 1001 Property had been owned by 1001
Fourth Avenue Associates ("Associates"), an Illinois general partnership,
until it transferred ownership of the property to its mortgage lender
pursuant to a deed in lieu of foreclosure in November 1993. Associates had
as its partners the Partnership with a 99.9% partnership interest and the
Corporate General Partner with a 0.1% partnership interest. Associates was
dissolved in 1993. In its notice, NOP advised that it had discovered soil
and possible groundwater contamination on its property that it believed had

emanated from underground fuel storage tanks allegedly operated by
Associates. NOP advised that its site was contaminated with petroleum
hydrocarbons in excess of Washington state cleanup levels and that
approximately 80,000 to 90,000 tons of contaminated soil have been
excavated and disposed of off-site. NOP also stated that impacted
groundwater recovered during excavation has been addressed as necessary.
NOP advised that it had incurred costs of investigation and remedial action
at the site and would seek to recover from the responsible party or
parties, among other things, the costs of investigation and remediation,
attorneys' fees, and other costs in connection with this matter.

On November 30, 2001, NOP sent the Partnership, and five other
allegedly responsible parties, a further demand letter purporting to
quantify the amount of remedial action costs incurred by NOP through the
date of the letter. In the letter, NOP stated that it had incurred
$2,050,561 in recoverable remedial action costs that allegedly covered,
among other things, costs of investigation, removal costs for 88,570 tons
of soil, consulting fees and attorneys' fees incurred to the date of the
letter. In the 2001 demand letter, NOP stated that it would also seek all
additional future costs as they are incurred, including any additional
costs related to future required investigation and remediation of any
groundwater contamination and any costs incurred by NOP as a result of any
recontamination of the NOP property that might arise from the contamination
alleged to exist currently at the 1001 Property site. Such future costs
could materially increase the ultimate costs that NOP might seek to
recover. In addition, NOP's demands do not include costs for the
investigation, remediation or other treatment of the soil or groundwater at
the 1001 Property site and the Partnership does not have preliminary
estimates of these potential costs. The Partnership engaged counsel and
developed information sufficient to respond to the issues raised by NOP's
demands.

In July 2002, a settlement in principle of this matter had been
reached involving NOP, the Partnership and other allegedly responsible
parties. However, the settlement talks have broken down with the parties
having substantial disagreements about the nature and scope of their
commitments under any settlement. NOP still appears agreeable in principle
to settling and releasing its claims against the Partnership and other
alleged responsible parties with respect to the contamination on NOP's
property for the payment of a certain sum of money. Seafo, Inc. ("Seafo"),
one of the other allegedly responsible parties and the current owner of the
1001 Property, has expressed the view that as part of a settlement it is
unwilling to accept financial responsibility for the contamination, if any,
remaining at or originating from the 1001 Property site.

On or about October 25, 2002, Seafo sent a letter to the Partnership,
and other allegedly responsible parties, stating that Seafo intended to
take some samples at or around the 1001 Property site and, if necessary,
undertake remediation action. In the letter, Seafo stated that it was
providing notice of its activities pursuant to Washington's Model Toxic
Control Act and the administrative regulations attached thereto. Seafo
further stated in its letter that it reserved the right to seek
contribution from the Partnership and others for any costs incurred by
Seafo.

Seafo provided its notice without any alleged intention to suspend
settlement negotiations. The parties are currently attempting to schedule
a further mediation of this matter. The Partnership can give no assurance
that such mediation, if conducted, will lead to a settlement of the NOP
claim or of issues that Seafo may raise in connection with the
contamination, if any, at or originating from the 1001 Property site.

During the quarter ended June 30, 2002, the Partnership recorded as a
liability its share of the proposed settlement payment to NOP, based upon
the previous settlement in principle reached in July 2002. As a result of
the breakdown of such settlement in principle and the current positions of
the parties involved, the Partnership believes that an additional amount of
loss arising from this matter is reasonably possible, which could be
material. However, the Partnership is unable to estimate at this time a
range for such reasonably possible additional loss.

ADJUSTMENTS

In the opinion of the Corporate General Partner, all adjustments
(consisting solely of normal recurring adjustments) necessary for a fair
presentation have been made to the accompanying figures as of September 30,
2002 and for the three and nine months ended September 30, 2002 and 2001.

PART I. FINANCIAL INFORMATION

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

At September 30, 2002, the Partnership had cash and cash equivalents
of approximately $3,200,000. These funds are available for working capital
requirements and reserves, payment of liabilities, including possible
payments, if any, relating to a resolution of the environmental matter at
the 1001 Property (discussed below), and potential future distributions to
the General Partners and Holders of Interests. As discussed below,
JMB/NYC's indirect interest in the 237 Partnership was sold in January
2002. The Partnership received its share (approximately $159,000) of the
proceeds from such sale in March 2002. In addition, the Partnership
received approximately $104,000 in May of 2002 as a return of its December
1999 advance to the limited partners of JMB/NYC. In September of 2002, the
Partnership received final dividends of approximately $28,000 and $35,000
from Carlyle Investors, Inc. and Carlyle Managers, Inc., respectively, and
a final distribution of approximately $3,700 from Carlyle-XIII Associates,
L.P., related to the dissolution and liquidation of these companies
following the sale of JMB/NYC's indirect interest in the 237 Partnership.

On or about October 13, 2000, the Corporate General Partner of the
Partnership received a demand letter and notice of planned environmental
remedial activities from counsel for National Office Partners Limited
Partnership (hereinafter, "NOP"). In the notice, NOP advised the
Partnership that NOP had discovered contamination on a site adjacent to the
office building formerly known as the 1001 Fourth Avenue Plaza office
building (the "1001 Property"). The 1001 Property had been owned by 1001
Fourth Avenue Associates ("Associates"), an Illinois general partnership,
until it transferred ownership of the property to its mortgage lender
pursuant to a deed in lieu of foreclosure in November 1993. Associates had
as its partners the Partnership with a 99.9% partnership interest and the
Corporate General Partner with a 0.1% partnership interest. Associates was
dissolved in 1993. In its notice, NOP advised that it had discovered soil
and possible groundwater contamination on its property that it believed had
emanated from underground fuel storage tanks allegedly operated by
Associates. NOP advised that its site was contaminated with petroleum
hydrocarbons in excess of Washington state cleanup levels and that
approximately 80,000 to 90,000 tons of contaminated soil have been
excavated and disposed of off-site. NOP also stated that impacted
groundwater recovered during excavation has been addressed as necessary.
NOP advised that it had incurred costs of investigation and remedial action
at the site and would seek to recover from the responsible party or
parties, among other things, the costs of investigation and remediation,
attorneys' fees, and other costs in connection with this matter.

On November 30, 2001, NOP sent the Partnership, and five other
allegedly responsible parties, a further demand letter purporting to
quantify the amount of remedial action costs incurred by NOP through the
date of the letter. In the letter, NOP stated that it had incurred
$2,050,561 in recoverable remedial action costs that allegedly covered,
among other things, costs of investigation, removal costs for 88,570 tons
of soil, consulting fees and attorneys' fees incurred to the date of the
letter. In the 2001 demand letter, NOP stated that it would also seek all
additional future costs as they are incurred, including any additional
costs related to future required investigation and remediation of any
groundwater contamination and any costs incurred by NOP as a result of any
recontamination of the NOP property that might arise from the contamination
alleged to exist currently at the 1001 Property site. Such future costs
could materially increase the ultimate costs that NOP might seek to
recover. In addition, NOP's demands do not include costs for the
investigation, remediation or other treatment of the soil or groundwater at
the 1001 Property site and the Partnership does not have preliminary
estimates of these potential costs. The Partnership engaged counsel and
developed information sufficient to respond to the issues raised by NOP's
demands.

In July 2002, a settlement in principle of this matter had been
reached involving NOP, the Partnership and other allegedly responsible
parties. However, the settlement talks have broken down with the parties
having substantial disagreements about the nature and scope of their
commitments under any settlement. NOP still appears agreeable in principle
to settling and releasing its claims against the Partnership and other
allegedly responsible parties with respect to the contamination on NOP's
property for the payment of a certain sum of money. Seafo, Inc. ("Seafo"),
one of the other allegedly responsible parties and the current owner of the
1001 Property, has expressed the view that as part of a settlement it is
unwilling to accept financial responsibility for the contamination, if any,
remaining at or originating from the 1001 Property site.

On or about October 25, 2002, Seafo sent a letter to the Partnership,
and other allegedly responsible parties, stating that Seafo intended to
take some samples at or around the 1001 Property site and, if necessary,
undertake remediation action. In the letter, Seafo stated that it was
providing notice of its activities pursuant to Washington's Model Toxic
Control Act and the administrative regulations attached thereto. Seafo
further stated in its letter that it reserved the right to seek
contribution from the Partnership and others for any costs incurred by
Seafo.

Seafo provided its notice without any alleged intention to suspend
settlement negotiations. The parties are currently attempting to schedule
a further mediation of this matter. The Partnership can give no assurance
that such mediation, if conducted, will lead to a settlement of the NOP
claim or of issues that Seafo may raise in connection with the
contamination, if any, at or originating from the 1001 Property site.

During the quarter ended June 30, 2002, the Partnership recorded as a
liability its share of the proposed settlement payment to NOP, based upon
the previous settlement in principle reached in July 2002. As a result of
the breakdown of such settlement in principle and the current positions of
the parties involved, the Partnership believes that an additional amount of
loss arising from this matter is reasonably possible, which could be
material. However, the Partnership is unable to estimate at this time a
range for such reasonably possible additional loss.

Because it appears that the Partnership will not be able to resolve
the issues concerning the environmental matter involving the 1001 Property
prior to the end of this year, it is unlikely that the Partnership will
wind up its affairs and terminate on or before December 31, 2002. Although
it is currently expected that there will be a minimal final distribution in
the future, the Holders of Interests are only expected to receive, in total
over the entire term of the Partnership, less than one-sixth of their
original investment in the Partnership from all cash sources.

In November 1999, JMB/NYC closed a transaction (the "Restructuring")
pursuant to which, among other things, JMB/NYC's interests in 237 Park
Avenue ("237 Park") and 1290 Avenue of the Americas ("1290 Avenue of the
Americas") were restructured. Under the Restructuring, the partnership
that owned 237 Park was converted to a limited liability company ("237 Park
LLC"). The membership interest in 237 Park LLC owned by 237/1290 Upper
Tier Associates, L.P. (the "Upper Tier Partnership"), in which JMB/NYC was
a limited partner with a 99% interest, was contributed to a partnership
(the "237 Partnership") that acquired the other membership interests in 237
Park LLC from the REIT and one of its affiliates. In exchange for the
interest in 237 Park LLC, the Upper Tier Partnership received a limited
partnership interest in the 237 Partnership having a fair market value
(determined in accordance with the partnership agreement of the 237
Partnership) of approximately $500,000. (JMB/NYC's total investment in the

237 Partnership was significantly less than 1% of the 237 Partnership.)
The 237 Partnership owned a portfolio of investments in addition to 237
Park. JMB/NYC had the right, during the month of July of each calendar
year commencing with 2001, to cause a sale of the interest in the 237
Partnership for a price equal to the greater of the fair market value of
such interest (determined in accordance with the partnership agreement of
the 237 Partnership) and a specified amount, of which JMB/NYC's share would
be $500,000. JMB/NYC elected not to exercise its right to cause a sale of
its interest in the 237 Partnership during July 2001. In addition, the
general partner of the 237 Partnership had the right, during the month of
January of each calendar year commencing with 2002, to purchase the
interest in the 237 Partnership for a price equal to the greater of the
fair market value of such interest (determined as described above) and a
specified amount, of which JMB/NYC's share would be $650,000. In January
2002, the general partner of the 237 Partnership exercised its right to
acquire JMB/NYC's indirect interest in the 237 Partnership, and JMB/NYC
received $650,000 in sale proceeds. Such amount was paid to the limited
partners of JMB/NYC as holders of a tranche of the Purchase Note as
discussed below. The Partnership's share of such sale proceeds,
approximately $159,000, was received in March 2002. Due to the January
2002 sale of the Partnership's indirect interest in the 237 Partnership,
which was the Partnership's last investment property, the distributions
received in excess of recorded investment were reduced to zero and included
as part of the gain on sale in 2002. The distributions received in excess
of recorded investment were created by the 1999 retirement of the
Partnership's obligations to fund, on demand, $200,000 and $200,000 to
Carlyle Investors, Inc. and Carlyle Managers, Inc., respectively, of
additional paid-in capital. Such obligations, when retired, included
accrued but unpaid interest.

JMB/NYC's indirect interest through the Upper Tier Partnership in the
partnership (the "1290 Partnership") that owned 1290 Avenue of the Americas
was also modified, although the REIT continued to own the controlling
interest in the property. In general, the REIT had the right to sell 1290
Avenue of the Americas or engage in certain other transactions during the
period January 1, 2000 through February 28, 2001, provided that JMB/NYC
received the greater of (i) an amount based on a formula relating to the
operations of the property (the "1290 Formula Price") and (ii) $4,500,000.
No such transaction occurred during that period. An affiliate of the REIT
also had the right, during the month of March of each calendar year
commencing with 2001, to purchase JMB/NYC's indirect interest in the 1290
Partnership for the greater of (x) the 1290 Formula Price and (y)
$1,400,000. On March 2, 2001, JMB/NYC was notified that an affiliate of
the REIT intended to exercise its right to purchase JMB/NYC's indirect
interest in the 1290 Partnership and on March 23, 2001, the sale was
completed and JMB/NYC received approximately $1,400,000 at closing (of
which the Partnership's share was approximately $340,000). Such amount was
paid to the limited partners of JMB/NYC as holders of a tranche of the
Purchase Note as discussed below. In addition, JMB/NYC received the
remaining collateral (approximately $5,700,000, of which the Partnership's
share was approximately $1,436,000) held pursuant to the indemnification
agreement, including interest earned thereon, upon closing of the sale of
its interest in the 1290 Partnership. The Partnership received its share
of the sale proceeds and collateral amount in May 2001.

A portion of the purchase price for JMB/NYC's indirect interests in
the 1290 Avenue of the Americas and 237 Park Avenue office buildings was
represented by a certain promissory note (the "Purchase Note") bearing
interest at 12-3/4% per annum. The Purchase Note was secured by JMB/NYC's
indirect interests in the 237 Partnership (prior to its sale in January
2002) and the 1290 Partnership (prior to its sale in March 2001) owned
through the Upper Tier Partnership and was non-recourse to JMB/NYC. The
Purchase Note required payment of principal and interest out of
distributions made to JMB/NYC from the 1290 Partnership and the 237
Partnership and proceeds from sales of JMB/NYC's indirect interests in
those partnerships. Unpaid interest accrued and was deferred, compounded

monthly. Unpaid principal and interest were due at maturity on January 2,
2001. As expected, JMB/NYC did not have funds to pay the Purchase Note at
its maturity. The limited partners of JMB/NYC, as creditors, and the
holder of the Purchase Note agreed to certain steps if the Purchase Note
were not repaid within one year of its maturity as discussed below. The
outstanding principal and accrued and deferred interest on the Purchase
Note at the date of debt forgiveness and final liquidation and termination
of JMB/NYC, September 30, 2002, was approximately $186,347,000, including
interest at the default rate (as defined) of 12-3/4% per annum.

In December 1999, the Affiliated Partners advanced a total of
approximately $425,000 (of which the Partnership advanced approximately
$105,000) to the limited partners of JMB/NYC, which was used to acquire a
$5,425,000 tranche of the Purchase Note and the related security agreement
for the collateralization of such tranche. As a result of this purchase,
such limited partners, as creditors of JMB/NYC, were entitled to receive up
to $5,425,000 in proceeds otherwise payable to JMB/NYC in respect of its
indirect interests in the 1290 Partnership or the 237 Partnership, which
were owned through the Upper Tier Partnership. Such amounts received by
the limited partners generally were distributable to the Affiliated
Partners in proportion to their respective advances made to purchase the
tranche (i.e., 25% to the Partnership and 75% in the aggregate to the other
Affiliated Partners). In connection with their purchase of the $5,425,000
tranche of the Purchase Note, the limited partners of JMB/NYC agreed with
the holder of the Purchase Note that in the event JMB/NYC had not repaid
all amounts due and owing under the Purchase Note within one year after its
maturity on January 2, 2001, the holder would take the appropriate steps
necessary to foreclose upon and obtain JMB/NYC's interest in the Upper Tier
Partnership in lieu of seeking any other damages. After the sales of
JMB/NYC's indirect interests in the 1290 Partnership and the 237
Partnership, which were the primary assets of the Upper Tier Partnership,
and the application of JMB/NYC's share of the proceeds from such sales to
amounts due under the Purchase Note, which did not repay the entire amount
of the tranche of the Purchase Note acquired by the limited partners of
JMB/NYC, there were no significant assets, if any, securing repayment of
the balance due under the Purchase Note, which was considered
uncollectible. Accordingly, the holder did not seek to foreclose on
JMB/NYC's interest in the Upper Tier Partnership. The Partnership received
$103,761 in May of 2002 as a return of its December 1999 advance to the
limited partners of JMB/NYC. JMB/NYC recognized gain on debt forgiveness
for financial reporting purposes during September 2002 and Federal income
tax purposes during 2002 equal to the remaining unpaid principal and
accrued interest on the Purchase Note of approximately $186,347,000 and
$62,216,000, respectively. For Federal income tax purposes the
Partnership's share of such gain is expected to be approximately
$15,505,000. During 1996, the Partnership discontinued the equity method
of accounting for JMB/NYC for financial reporting purposes. Therefore, the
Partnership did not recognize a portion of JMB/NYC's share of the gain
related to the Purchase Note for financial reporting purposes.

Pursuant to the indemnification agreement, the Affiliated Partners
were jointly and severally obligated to indemnify the REIT to the extent of
$25 million to ensure their compliance with the terms and conditions
relating to JMB/NYC's indirect limited partnership interests in the
restructured and reorganized joint ventures that owned the Properties. The
Affiliated Partners contributed approximately $7,800,000 (of which the
Partnership's share was approximately $1,900,000) to JMB/NYC, which was
deposited into an escrow account as collateral for such indemnification.
These funds were invested in stripped U.S. Government obligations with a
maturity date of February 15, 2001. Subsequent to that date, the remaining
escrowed funds were invested in short-term U.S. Government obligations.
Due to the Restructuring discussed above, during 1999 the maximum potential

obligation was reduced to $14,285,000 and a portion of the collateral
(approximately $4,460,000 in face amount) was released in 1999 to JMB/NYC.
As a result of the sale of JMB/NYC's indirect interest in the 1290
Partnership, the indemnification obligation was terminated and the
remaining collateral (approximately $5,700,000 face amount of which the
Partnership's share was approximately $1,436,000) was released in March
2001 to JMB/NYC. The Partnership's share of the reduction of the maximum
unfunded obligation under the indemnification agreement recognized as
income during the years 1999, 2000 and 2001 was a result of (i) interest
earned on amounts contributed by the Partnership and held in escrow by
JMB/NYC, (ii) the Partnership's share of the agreed upon reduction of the
maximum obligation in November 1999 in connection with the Restructuring
discussed above, and (iii) the Partnership's share of the remaining
indemnification obligation that was released in March 2001 in connection
with the sale of JMB/NYC's indirect interest in the 1290 Partnership.
Interest income earned reduced the Partnership's share of the maximum
unfunded obligation under the indemnification agreement, which had been
reflected as a liability.

It currently appears that the Partnership will not be able to wind up
and terminate in 2002 because of the unresolved environmental issues
relating to the 1001 Property. Moreover, the Partnership will not make any
significant distributions to the Holders of Interests. However, in
connection with the sale of JMB/NYC's interest in the 237 Partnership in
January 2002, Holders of Interests will recognize in the current year a
substantial amount of net gain for Federal income tax purposes
(corresponding at a minimum to all or most of their remaining deficit
capital account balances for tax purposes related to such investment).
Sale proceeds, if any, that will be distributed in connection with the
liquidation of the Partnership will be significantly less than the gain,
and due to the unresolved environmental issues involving the 1001 Property,
a distribution, if any, of such sale proceeds will likely not occur in
2002. For certain Holders of Interests such taxable income may be offset
by their suspended passive activity losses (if any). Each Holder's tax
consequences will depend on his own tax situation.

RESULTS OF OPERATIONS

The decrease in other assets at September 30, 2002 as compared to
December 31, 2001 is due to the return of the Partnership's 1999 advance to
the limited partners of JMB/NYC related to the tranche of the Purchase
Note, as described more fully in the Notes.

The increase in accounts payable and accrued expenses at September 30,
2002 as compared to December 31, 2001 is primarily due to the accruals for
the proposed settlement and professional fees relating to the environmental
issues concerning the 1001 Property, discussed more fully above.

The decrease in distributions received in excess of recorded
investment at September 30, 2002 as compared to December 31, 2001 is due to
the reduction of such amount in connection with the sale of the indirect
interest in the 237 Partnership in January, 2002. The distributions
received in excess of recorded investment were created by the 1999
retirement of the Partnership's obligations to fund, on demand, $200,000
and $200,000 to Carlyle Investors, Inc. and Carlyle Managers, Inc.,
respectively, of additional paid-in capital. Such obligations, when
retired, included accrued but unpaid interest. Such investment has been
reduced to zero and included in the Partnership's share of gain on sale of
indirect partnership interest due to the sale of the Partnership's last
investment property in January 2002.

The decrease in interest income for the three and nine months ended
September 30, 2002 as compared to the same periods in 2001 is primarily due
to lower interest rates on invested funds in 2002.

The other income for the three and nine months ended September 30,
2002 consists primarily of final dividends of approximately $28,000 and
$35,000 received from Carlyle Investors, Inc. and Carlyle Managers, Inc.,
respectively, in September 2002 and also the return during the third
quarter of 2002 of $12,000 held in a payroll cash account of a property
formerly owned by the Partnership.

The increase in professional services for the three and nine months
ended September 30, 2002 as compared to the same periods in 2001 is
primarily due to accruals made for legal and other professional services in
regards to the environmental issues concerning the 1001 Property, discussed
more fully above.

The increase in general and administrative expenses for the nine
months ended September 30, 2002 as compared to the same period in 2001 is
primarily due to the accrual for the proposed settlement relating to the
1001 Property recorded during the second quarter of 2002, discussed more
fully above. The increase in general and administrative expenses for the
three months ended September 30, 2002 as compared to the same period in
2001 is primarily due to an increase in certain payroll expenses related to
the environmental issues at the 1001 Property.

The Partnership's share of the reduction of the maximum unfunded
obligation under and income related to termination of the indemnification
agreement recognized as income during 2001 of $3,572,177 is a result of the
sale of JMB/NYC's indirect interest in the 1290 Partnership in March of
2001 and release of the Partnership's and other Affiliated Partners'
indemnification obligation relating to the interest in the 1290
Partnership, as well as interest earned during 2001 on amounts contributed
by the Partnership and held in escrow by JMB/NYC. Such interest income
earned reduced the Partnership's proportionate share of the maximum
unfunded obligation under the indemnification agreement.

The Partnership's share of gain on sale of indirect partnership
interest for the nine months ended September 30, 2002 is primarily the
aggregate of the Partnership's share (approximately $159,000) of JMB/NYC's
gain from the sale of its indirect partnership interest in the 237
Partnership in January 2002 and the reduction of the distributions received
in excess of recorded investment (approximately $661,000). The
Partnership's share of gain on sale of indirect partnership interest for
the three months ended September 30, 2002, is primarily due to a final
liquidating distribution of cash generated from sales proceeds of
approximately $3,700 received from Carlyle-XIII Associates, L.P. in
September 2002. The Partnership's share of gain on sale of indirect
partnership interest for the nine months ended September 30, 2001 is the
Partnership's share of JMB/NYC's gain from the sale of its indirect
partnership interest in the 1290 Partnership on March 23, 2001.

ITEM 4. CONTROLS AND PROCEDURES

Pursuant to Section 302 of the Sarbanes-Oxley Act and Rule 13a-14 of
the Securities Exchange Act of 1934 (the "Exchange Act") promulgated
thereunder, the principal executive officer and the principal financial
officer of the Partnership have evaluated the effectiveness of the
Partnership's disclosure controls and procedures as of a date within 90
days prior to the date of the filing of this report (the "Evaluation Date")
with the Securities and Exchange Commission ("SEC"). Based on such
evaluation, the principal executive officer and the principal financial
officer have concluded that the Partnership's disclosure controls and
procedures were effective as of the Evaluation Date to ensure that
information required to be disclosed in this report was recorded,
processed, summarized and reported within the time period specified in the
applicable SEC rules and form for this report. Furthermore, there have
been no significant changes in the internal controls or in other factors
that could significantly affect internal controls subsequent to the date of
their most recent evaluation, including any corrective actions with regard
to significant deficiencies and material weaknesses.

PART II. OTHER INFORMATION

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

A portion of the purchase price for JMB/NYC's indirect interests in
the 1290 Avenue of the Americas and 237 Park Avenue office buildings was
represented by a certain promissory note (the "Purchase Note") bearing
interest at 12-3/4% per annum. Unpaid principal and interest were due at
final maturity on January 2, 2001. As expected, JMB/NYC did not have funds
to pay the Purchase Note at its maturity. The outstanding principal and
accrued and deferred interest on the Purchase Note at the date of debt
forgiveness and liquidation and termination of JMB/NYC, September 30, 2002,
was approximately $186,347,000 including interest at the default rate (as
defined) of 12-3/4% per annum. Reference is made to the subsection
entitled "JMB/NYC" in the Notes to the Financial Statements filed with this
report for a further discussion of the default under the Purchase Note.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a) Exhibits.

3-A. Amended and Restated Agreement of Limited Partnership set
forth as Exhibit A to the Prospectus is hereby
incorporated herein by reference to the Partnership's
Report for June 30, 2002 on Form 10-Q (File No. 0-12791)
dated August 12, 2002.

3-B. Acknowledgement of rights and duties of the General
Partners of the Partnership between ABPP Associates, L.P.
(a successor Associate General Partner of the Partnership)
and JMB Realty Corporation as of December 31, 1995 is
hereby incorporated herein by reference to the
Partnership's Report for September 30, 1996 on Form 10-Q
(File No. 0-12791) dated November 8, 1996.

99. Certification Pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002 is filed herewith.

(b) No reports on Form 8-K were filed during the last quarter of
the period covered by this report.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934,
the Company has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

CARLYLE REAL ESTATE LIMITED PARTNERSHIP - XIII

BY: JMB Realty Corporation
(Corporate General Partner)

By: GAILEN J. HULL
Gailen J. Hull, Senior Vice President
Date: November 14, 2002

Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following person in the capacity
and on the date indicated.

By: GAILEN J. HULL
Gailen J. Hull, Chief Financial Officer and
Principal Accounting Officer
Date: November 14, 2002

CERTIFICATIONS
--------------

I, H. Rigel Barber, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Carlyle Real
Estate Limited Partnership - XIII;

2. Based on my knowledge, this quarterly report does not contain any
untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect to
the period covered by this quarterly report;

3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and
cash flows of the registrant as of, and for, the periods presented in
this quarterly report;

4. The registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant
and we have:

a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within
those entities, particularly during the period in which this
quarterly report is being prepared;

b) evaluated the effectiveness of the registrant's disclosure
controls and procedures as of a date within 90 days prior to
the filing date of this quarterly report (the "Evaluation
Date"); and

c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based
on our evaluation as of the Evaluation Date;

5. The registrant's other certifying officer and I have disclosed,
based on our most recent evaluation, to the registrant's auditors and
the audit committee of registrant's board of directors (or persons
performing the equivalent function):

a) all significant deficiencies in the design or operation of
internal controls which could adversely affect the registrant's
ability to record, process, summarize and report financial data
and have identified for the registrant's auditors any material
weaknesses in internal controls; and

b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's
internal controls; and

6. The registrant's other certifying officer and I have indicated in
this quarterly report whether or not there were significant changes
in internal controls or in other factors that could significantly
affect internal controls subsequent to the date of our most recent
evaluation, including any corrective actions with regard to
significant deficiencies and material weaknesses.

Date:November 14, 2002

/s/ H. Rigel Barber
----------------------------
Principal Executive Officer

CERTIFICATIONS
--------------

I, Gailen J. Hull, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Carlyle Real
Estate Limited Partnership - XIII;

2. Based on my knowledge, this quarterly report does not contain any
untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect to
the period covered by this quarterly report;

3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and
cash flows of the registrant as of, and for, the periods presented in
this quarterly report;

4. The registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant
and we have:

a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within
those entities, particularly during the period in which this
quarterly report is being prepared;

b) evaluated the effectiveness of the registrant's disclosure
controls and procedures as of a date within 90 days prior to
the filing date of this quarterly report (the "Evaluation
Date"); and

c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based
on our evaluation as of the Evaluation Date;

5. The registrant's other certifying officer and I have disclosed,
based on our most recent evaluation, to the registrant's auditors and
the audit committee of registrant's board of directors (or persons
performing the equivalent function):

a) all significant deficiencies in the design or operation of
internal controls which could adversely affect the registrant's
ability to record, process, summarize and report financial data
and have identified for the registrant's auditors any material
weaknesses in internal controls; and

b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's
internal controls; and

6. The registrant's other certifying officer and I have indicated in
this quarterly report whether or not there were significant changes
in internal controls or in other factors that could significantly
affect internal controls subsequent to the date of our most recent
evaluation, including any corrective actions with regard to
significant deficiencies and material weaknesses.

Date:November 14, 2002

/s/ Gailen J. Hull
----------------------------
Principal Accounting Officer