William Norwalk, Transferee, et al. - Page 10

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          contributed to the partnership at an agreed value of $59,455.               
          The shareholders also transferred their share of the                        
          corporation's receivables to the partnership.  These assets were            
          contributed to the partnership (less liabilities assumed by the             
          partnership) in exchange for the opening balances of the                    
          respective partnership capital accounts of Messrs. DeMarta and              
          Norwalk.  The partnership did not assume tax obligations of the             
          corporation, nor did it assume the debts owed by the corporation            
          to the shareholders.  The opening capital account balances in the           
          partnership for Messrs. DeMarta and Norwalk were $39,202 and                
          $28,041, respectively.                                                      
               Messrs. DeMarta and Norwalk each executed a partnership                
          agreement when they joined the partnership.  Under the terms of             
          the partnership agreement, Messrs. DeMarta and Norwalk were                 
          treated as equal partners and subject to the same formula for               
          allocation of compensation.  This partnership agreement also                
          contained certain provisions restricting the partners' ability to           
          compete with the partnership.                                               
               The partnership assumed the corporation's lease and occupied           
          its former offices from July 1, 1992, to April 25, 1994.  On                
          April 28, 1994, after vacating these offices, the partnership               
          subleased the space.  At the time of the sublease, the remaining            
          term of the lease was 8 months.  The partnership subsidized one-            
          third of the rent when it subleased the space.                              

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