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cures the payment of rent during the first 11.5 months
of the lease in the amount of $8,872,245.00. It is
incongruous for petitioner to argue that zero rent is
allocated to the first 11.5 months of the lease when
the letter of credit is clearly a provided-for substi-
tute in the form of security for any rent that is not
paid during this period in the amount of $8,872,245.00.
Therefore, under the terms of the lease agreement, at
least $8,872,245.00 is allocated to the lease term and
must be accrued by petitioner in the first 11.5 months
of the lease, if the Court finds that the parties to
the lease should have followed the allocations made
under the lease under I.R.C. � 467(b)(1)(A).
In addition to being difficult to comprehend, the foregoing
argument of respondent regarding the Partnership letter of credit
is premised upon certain allegations of fact that are not estab-
lished by the record herein. In this regard, it will be helpful
to quote pertinent portions of the lease agreement. That agree-
ment recited:
53. LETTER OF CREDIT. As security for the payment of
Basic Rent, Lessee has delivered a letter of credit
(herein, such letter of credit, and each extension or
replacement thereof pursuant to this Section 53, is
called the "Letter of Credit") in the aggregate amount
equal to $8,872,245, with an expiry date of June 30,
1989, issued by Canadian Imperial Bank of Commerce
("CIBC") and Citicorp Real Estate, Inc., and with the
Lessor * * * as beneficiary, which Letter of Credit may
be assigned for collateral purposes by the Lessor to
Canadian Imperial Bank of Commerce * * *.
In addition to the foregoing, at least forty (40)
days prior to the expiration of the first, second and
third Lease Years (hereinafter defined), except to the
extent that any prior Letter of Credit shall have been
drawn up, Lessee shall likewise deliver to the benefi-
ciary [Partnership] an extension of or replacement for
the Letter of Credit in an aggregate amount * * * equal
to the following * * *.
* * * * * * *
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