- 29 -
In rendering their opinion, Austrian, Lance & Stewart
relied heavily upon the Appraisal prepared by Mr. Wilkins,
described above. For example, the Tax Opinion relies upon
the Appraisal for the proposition that "the current fair
market value of the Equipment is at least equal to the
purchase price to be paid by the Trust". The Tax Opinion
also relies upon the Appraisal for the proposition that the
equipment "should have a value at the end of the terms of
the [Master] Leases (the 'residual value'), without regard
to inflation, equal to or exceeding 20 percent of its
cost." Austrian, Lance & Stewart recite these facts in
connection with their assumptions and representations at
the beginning of the Tax Opinion in the following passage:
Seller has provided the Trustee with a
projection with respect to the present and
anticipated future value of the Equipment (the
"Appraisal") prepared by Communigraphics, Inc.
(the "Appraiser"). The Appraiser believes that
the current fair market value of the Equipment is
at least equal to the purchase price to be paid
by the Trust and will exceed the aggregate amount
of the Trust Note and that the Unitholders can
expect the Equipment to have a useful life
extending beyond the terms of the Leases and that
it should have a value at the end of the terms of
the Leases (the "residual value"), without regard
to inflation, equal to or exceeding 20 percent of
its cost. We are aware, however, that the data
processing industry has been and is likely to
continue undergoing rapid technological advances,
some of which may substantially depress the
economic value of the Equipment and limit its
useful life. We note specifically that the terms
of the Leases, 96 months, is longer than most
Page: Previous 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 NextLast modified: May 25, 2011