R. Edwin Brown and Winsome S. Brown - Page 3

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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             
               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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