Andantech L.L.C., Wells Fargo Equipment Finance, Inc. (f.k.a. Norwest Equipment Finance, Inc.), Tax Matters Partner, and Wells Fargo & Co., A Partner Other Than the Tax Matters Partner, et al. - Page 34

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          transaction was rated “purely on the credit of Comdisco and not on          
          the risks inherent in this tax advantaged lease transaction”.               
               The CAP stated in relevant part: “All credit and tax risks             
          will be assumed by Norwest Tax Department”; NEFI’s role would be            
          “that of consultant”; and NEFI would be paid a fee for its                  
          services.  The CAP also contained a “Collateral” section,                   
          reflecting that “Limited value is placed upon the collateral with           
          the transaction’s purpose being tax driven and subject to Norwest           
          Tax Department approval.  However, there is upside potential for            
          the benefit of Norwest Corporation.”  The CAP further stated that           
          “Credit risk is considered remote based upon Comdisco’s credit,             
          substantial underlying lessees and short 36 month term.”7                   
               Because Mr. Vandermark was head of the Norwest tax department,         
          his signature was required on all CAPs involving sale-leaseback             
          transactions.  Mr. Vandermark had to verify that Norwest had                
          taxable income sufficient to use the desired tax benefits.                  
               Various Norwest and NEFI officers signed the CAP; the last             
          signature was dated September 21, 1993.  The CAP approved                   

               7    According to Mr. Vandermark and Mr. Renner, president             
          of NEFI, all sale-leaseback transactions have substantial tax               
          benefits; the “upside potential” (as referred to in the CAP) was            
          “in the residuals”.  According to Ms. Grossman, the CAP’s                   
          reference to “tax driven” meant that there were tax benefits                
          associated with the proposed sale-leaseback transaction and that            
          there was “residual upside”, meaning that the residual value of             
          the computers could produce a substantial economic profit.                  

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