Payless Cashways, Inc. and Its Subsidiaries - Page 6

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          between Trizec Properties, Inc. (Trizec), and PCI Building Corp.            
          (PCI), a wholly owned subsidiary of Payless.  Trizec owned an 83-           
          1/3-percent interest in TPS, and PCI owned the remaining 16-2/3-            
          percent interest.4  Trizec and PCI made initial capital                     
          contributions of $2,500,000 and $500,000, respectively.  TPS                
          developed Two Pershing Square and operated Two Pershing Square              
          until November 27, 1992, at which time the partnership was                  
          dissolved and Trizec took over ownership and operational                    
          responsibilities.  On April 4, 1985, TPS contracted with DiCarlo            
          Construction for the construction of Two Pershing Square                    
          (construction contract).  After April 4, 1985, DiCarlo                      
          Construction relied on the plans incorporated by reference in the           
          construction contract to construct Two Pershing Square.                     
               Payless took possession of its headquarters office space at            
          Two Pershing Square in October 1986.  Payless equipped,                     
          furnished, and leased parts of 5 of 11 floors in the building.              
          Under the terms of the lease, Payless was initially obligated to            
          rent approximately 41 percent of the office space at Two Pershing           
          Square and was entitled to exercise options in the future to                
          lease the additional office space above the first floor in that             

               4The record does not definitively disclose whether PCI was a           
          limited or general partner in the TPS partnership.  Trizec,                 
          however, executed Payless’ lease agreement as the general partner           
          of TPS.                                                                     

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