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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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