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On December 30, 1979, a purported purchase agreement was
executed between Cedilla Invest. and Pluto pursuant to which
Pluto sold to Cedilla Invest. the IBM equipment as to which
British Aerospace, Unichem, and Cheshire County Council were end
users. The selling price was $6,118,051, made payable by a check
for $190,000 and a limited recourse promissory note for
$5,928,051 executed by Cedilla Invest.
In connection with the Cedilla Invest./Pluto agreement,
Cedilla Invest. additionally executed a promissory note in favor
of Pluto in the amount of $260,000, dated December 30, 1979, and
another promissory note dated December 30, 1979, in the amount of
$95,625.
Under the security provision, the lien of Pluto was
subordinate to the interests of underlying lessees, the rights of
Atlantic under the residual agreement, and the proceeds from the
rent of the equipment in excess of $475 per period received by
Cedilla Invest. from Funding International.
The limited recourse promissory note contained a provision
for deferral, which permitted the payor to defer any sums,
principal and interest, due under the note, if any amount of rent
or sum due under the lease was not received by the payor as the
sum became due. The deferral allowed the payor, Cedilla Invest.,
to defer payment to December 31, 1994, without paying accrued
interest on the amount so deferred. In addition, under the
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