MEMORANDUM FOR FILE

WHITEHALL STREET REAL ESTATE LIMITED PARTNERSHIP IX AND X

The Foundation's investment in the Whitehall Street Real Estate Limited Partnership (Whitehall) could result in unrelated business taxable income (UBIT) to the Foundation.

The issue of UBIT was reviewed by John Woodhall from KPMG Peat Marwick . He discussed the UBIT question with Josephine Mortellite , a Whitehall representative. The conclusion was a portion of the Whitehall return will be considered UBIT to the Bradley Foundation because certain of the investments will be leveraged. The amount of the UBIT is less certain, but it could range from 40% to a worst case basis of 80%.

According to David Kabillar , Goldman , Sachs & Co., the issue of UBIT was also of concern to another large foundation considering an investment in Whitehall. After extensive review it was concluded that the total return from Whitehall could be reduced by 300-500 basis points due to the UBIT issue. The most likely reduction would be 300 basis points. In addition, Whitehall will utilize the REIT approach where practicable to minimize the UBIT issue.

While the Bradley Foundation avoids UBIT were possible, it cannot be entirely avoided when investing in alternative investments. In the case of Whitehall, the investment is considered an excellent investment opportunity and adds additional diversity to the Foundation's total portfolio. The investment opportunity and expected return, net of taxes, overshadows the UBIT issue.

This matter was discussed with Thomas L. Rhodes, Investment Committee Chairman, on September 29, 1997. He agrees that the Foundation should proceed with the investment.

Robert N. Berkopec

September 29, 1997