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OSB) for the purpose of purchasing computer equipment. FDC
leased the equipment to American Telephone and Telegraph Co.
(hereinafter AT&T). FDC assigned its rights, title, and interest
in the lease to OSB.
On December 31, 1985, FDC and petitioner entered into a
sale/leaseback transaction with respect to the computer equipment
(hereinafter sometimes referred to as the equipment leasing
transaction). Pursuant to the equipment leasing transaction, the
parties executed a Master Purchase Agreement, a Bill of Sale, and
a promissory note entitled “Recourse Note and Security
Agreement”2 (FDC note) in the amount of $2,358,994. On January
2, 1990, petitioner and the Barnesville School (hereinafter the
School) executed an Assignment--Master Purchase Agreement and
Master Lease Agreement (hereinafter the agreement) and Bill of
Sale. The Bill of Sale provides for the sale of the computer
equipment and all rights in the lease with FDC to the School for
$1 consideration. The agreement provides, in relevant part, as
follows:
all right, title, and interest in the equipment and
rights described in the Master Purchase Agreement and the
Master Lease Agreement dated the 31st day of December, 1985,
entered into by and between Federal Data Corporation * * *
and R. Edwin Brown is by these presents hereby transferred,
assigned, and set over to The Barnesville School. * * * The
Barnesville School shall be substituted for the Buyer and
that all applicable terms and conditions of the aforesaid
2 Although the note was entitled Recourse Note, the parties have
acknowledged that the note, due to a stop loss clause, see sec.
465(b)(4), was treated as a nonrecourse note.
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