Republic Plaza Properties Partnership, PFI Republic Limited, Inc., Tax Matters Partner - Page 4

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          concerning PFI's interest in investing in a sale-leaseback trans-           
          action involving a 56-story office building located in the                  
          central business district of Denver, Colorado, that was known and           
          is herein referred to as Republic Plaza.  During all relevant               
          periods, PFI and BCE were unrelated companies that, prior to                
          1987, had no business dealings with each other.  The investment             
          that Commercial Union initially proposed to PFI involved a lease            
          of Republic Plaza to BCE for a period of 26 to 28 years, which              
          was to include a rent holiday2 of approximately 1 year that was             
          to occur at the beginning of the lease term.                                
               During the course of its investigation of the investment               
          proposed by Commercial Union, PFI employed Marshall and Stevens             
          Incorporated (Marshall and Stevens) to prepare an appraisal                 
          report (Marshall and Stevens appraisal report).  Merle E. Atkins            
          (Mr. Atkins) and John H. Whitcomb (Mr. Whitcomb), who are quali-            
          fied as experts in the area of real estate appraisal, prepared              
          that report.  PFI relied on the Marshall and Stevens appraisal              
          report in evaluating its proposed investment in Republic Plaza,             
          including, inter alia, the reasonableness of the rent holiday               
          included as part of that investment.                                        
               On June 14, 1988, Partnership was formed pursuant to a                 
          partnership agreement entered into between BCE and PFI (partner-            


          2  As used herein, the term "rent holiday" means a period of zero           
          or reduced rent occurring at the beginning of a lease.                      




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