Investment Research Associates - Page 430




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          needed to assure ownership of and legal title to the equipment               
          free of any liens, except the lease, after the initial lease term            
          expired.  This was pursuant to the residual agreements.                      
               On October 31, 1979, Funding International and Carena                   
          entered into a purchase agreement regarding other computer                   
          equipment involved as part of the British Aerospace Transaction.             
          Under the residual agreement between Atlantic and Willowbrook                
          International, a leasing company, made with respect to this                  
          transaction, the resale of the equipment to Atlantic had a                   
          repurchase price of one and one-half of its original cost and                
          would occur 6� years from the date of the original lease.  The               
          stated value of the equipment was $1,506,099.  The equipment was             
          to be used by the Cheshire County Council.                                   
               With respect to this equipment, Funding International                   
          executed a nonnegotiable, nonrecourse promissory note to Carena              
          in the amount of $1,462,793 dated October 31, 1979.  This                    
          promissory note contained deferral and offset provisions allowing            
          the purchaser/owner of the equipment to defer any payments on the            
          notes, if the leases were terminated prior to the expiration or              
          there was default thereof, and then to offset the deferred                   
          amounts against any payment due under the notes.                             
               On October 31, 1979, Funding International and Carena                   
          entered into an agreement of lease with respect to the Chesire               
          equipment, leasing the property back to Carena.                              






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