Andantech L.L.C., Wells Fargo Equipment Finance, Inc. (f.k.a. Norwest Equipment Finance, Inc.), Tax Matters Partner, and Wells Fargo & Co., A Partner Other Than the Tax Matters Partner, et al. - Page 31

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          III. Negotiations                                                           
               A.   CIG’s Initial Discussions With Norwest and NEFI                   
               In June 1993, representatives from CIG (Mr. Trznadel, Mr.              
          Snyder, and Ms. Ortmann), Norwest (Mr. Vandermark), NEFI (Ms.               
          Grossman), and Peat Marwick met to discuss a cross-border equipment         
          leasing transaction involving a portfolio of IBM computer equipment         
          (ultimately, the sale-leaseback transaction involved herein).  At           
          this meeting, representatives of CIG made a presentation from a             
          paper (entitled “Equipment Leasing Proposal” (the Proposal)), and           
          various flowcharts that outlined the elements and tax benefits of           
          a proposed cross-border equipment leasing transaction.                      
               Following the June presentation by CIG, Ms. Grossman requested         
          additional information from Comdisco.  On July 6, 1993, Ms. Ortmann         
          sent Ms. Grossman an economic analysis of a hypothetical sale-              
          leaseback transaction involving a $75 million portfolio of computer         
          equipment.3  On August 3, 1993, Ms. Ortmann provided Ms. Grossman           
          with sample documents (including a contract for sale of equipment,          
          lease, notes, security agreements, and a contract for sale of the           
          lease receivable) which could be used in connection with a proposed         
          cross-border equipment leasing transaction.  Ms. Grossman gave              
          these documents to NEFI’s attorneys for their review.  Ms. Grossman         
          also requested, by interoffice memo, that the articles of                   

               3    The economic analysis of a $75 million portfolio shows            
          a cash investment by the 98-percent shareholder of $9,252,693 and           
          a pretax profit of 6.1 percent using an estimated residual value            
          on the lease termination date of $22,754,717.                               

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