HORRIGAN AMERICAN INC, S-2, 1995-03-20

HORRIGAN AMERICAN INC
S-2, 1995-03-20
PERSONAL CREDIT INSTITUTIONS

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<PAGE> 1

As filed with the Securities and Exchange Commission on March 20, 1995

Registration No. 33-
================================================================================

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

-----------

Form S-2

REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933

-----------

HORRIGAN AMERICAN, INC.
(Exact name of registrant as specified in charter)

Pennsylvania 23-2224614
(State or other jurisdiction of (I.R.S. employer identification number)
incorporation or organization)

6 Commerce Drive, Shillington, Pennsylvania 19607-9704
610-775-5199
(Address and telephone number of principal executive offices)

J. F. Horrigan, Jr., Chairman
Horrigan American, Inc.
P.O. Box 13428
Reading, Pennsylvania 19612-3428
610-775-5199
(Name, address and telephone number of agent for service)

Copy to:
Michael B. Jordan, Esq., Drinker Biddle & Reath
Philadelphia National Bank Building, 1345 Chestnut Street
Philadelphia, PA 19107
215-988-2700

Approximate date of commencement of proposed sale to the public: as soon as
possible after the effective date of this registration statement

If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. /X/

If the registrant elects to deliver its latest annual report to security
holders, or a complete and legible facsimile thereof, pursuant to Item 11(a)(1)
of this form, check the following box. / /

CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
====================================================================================
Proposed Proposed
maximum maximum
Amount offering aggregate Amount of
Title of each class being price per offering registration
of securities being registered registered certificate price fee
- -------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Subordinated Investment
Certificates
1995 Series 8
1995 Series A $25,000,000* 100% $25,000,000 $8,620
1995 Series B
1995 Series C
Passbook Series
=====================================================================================
</TABLE>
*No separate amount has been allocated among the series.

The registrant hereby amends this registration statement on such date or
dates as may be necessary to delay its effective date until the registrant shall
file a further amendment which specifically states that this registration
statement shall thereafter become effective in accordance with section 8(a) of
the Securities Act of 1933 or until the registration statement shall become
effective on such date as the Commission, acting pursuant to said section 8(a),
may determine.

================================================================================

<PAGE> 2

HORRIGAN AMERICAN, INC.

Form S-2

CROSS REFERENCE SHEET
Item Prospectus Location
---- -------------------

1. Forepart of the Registration Statement and
Outside Front Cover Page of Prospectus...... Cover Page

2. Inside Front and Outside Back Cover Pages
of Prospectus............................... Inside front cover page;
Outside back cover page

3. Summary Information, Risk Factors and
Ratio of Earnings to Fixed Charges.......... Prospectus Summary;
Investment Considerations and
Risk Factors; Selected
Financial Data

4. Use of Proceeds............................. Use of Proceeds; Prospectus
Summary

5. Determination of Offering Price............. *

6. Dilution.................................... *

7. Selling Security Holders.................... *

8. Plan of Distribution........................ Cover Page; The Company

9. Description of Securities to be Registered.. Cover Page; Prospectus
Summary; Description of
Subordinated Investment
Certificates

10. Interests of Named Experts and Counsel...... *

11. Information with Respect to the Registrant.. The Company; Prospectus
Summary; Capitalization;
Selected Financial Data;
Management's Discussion and
Analysis of Financial
Condition and Results of
Operations; Business;
Independent Auditors' Report;
Financial Statements
12. Incorporation of Certain Information by
Reference................................... Incorporation of Certain
Documents by Reference

13. Disclosure of Commission Position on
Indemnification for Securities Act
Liabilities................................. *

- ----------
*Not applicable or none

<PAGE> 3

PROSPECTUS
HORRIGAN AMERICAN, INC.
SUBORDINATED INVESTMENT CERTIFICATES
<TABLE>
<CAPTION>
===============================================================================
Minimum
Series Maturity Interest Rate Denominations*
- -------------------------------------------------------------------------------
<S> <C> <C> <C>
1994 Series 8 8 years Fixed $1,000
- -------------------------------------------------------------------------------
1994 Series A 4 years Fixed $1,000
- -------------------------------------------------------------------------------
1994 Series B 30 months Fixed $ 500
- -------------------------------------------------------------------------------
1994 Series C 12 months Fixed $ 500
- -------------------------------------------------------------------------------
Passbook payable on demand Variable $ 500**
===============================================================================
</TABLE>
* Purchases must be made in multiples of $100.
** Each Passbook Series Certificate will be evidenced by an entry in a passbook
issued when an investor makes his initial purchase. Each Certificate (entry)
will be in a multiple of $100 between $500 and $50,000, inclusive. Larger
purchases may be made in a combination of these denominations. Redemptions
can be made only in the full amount of a Certificate (entry). The aggregate
investment in all Passbook Series Certificates (including various passbook
series formerly issued by the Company) is limited to $500,000 per holder, as
identified by Social Security number.

Unless the holder or the Company otherwise elects, the 1994 Series 8, A, B
and C Certificates will automatically "roll over" at maturity into
certificates then being offered by the Company for the same term at the then
current interest rate. Advance notice will be given to the holder. See Page 5.
The 1994 Series 8, A, B and C Certificates pay fixed rates of interest
until their maturity dates, determined by the Company on the first day of
each month for Certificates issued during that month. The interest rate paid
on all outstanding Passbook Certificates is subject to change on the first
day of each month at the discretion of the Company based on the Company's
assessment of current market conditions (notice of any change will be mailed
to the holder). No interest will be paid on a Passbook Series Certificate
which is redeemed by the holder before the eighth day after its purchase. To
determine the current rates, call the Company at 610-375-7480. This
prospectus will be supplemented from time to time with a statement of the
current rates. Interest is payable semi-annually (quarterly or monthly on a
Certificate of $10,000 or more, if requested) and is not compounded.
Early redemption in full by the holder, without penalty, is permitted upon
the death of any registered holder for a period of one year from the date of
death. The Company may call the Certificates for redemption in whole or in
part at any time without premium or penalty.
The Certificates (except the Passbook Series) are transferable, but no
trading market in these securities or in any other series of the Company's
subordinated investment certificates has developed or is expected to develop.
The Certificates are unsecured obligations of Horrigan American, Inc., and
are not obligations of any of its subsidiaries. The Certificates are
subordinated in right of payment of both principal and interest to the prior
payment in full of all indebtedness of Horrigan American, Inc. (including
indebtedness of others which it has guaranteed) for borrowed money or on
account of capitalized leases or the deferred purchase price of property or
reimbursement obligations under letters of credit.
The Company is offering the Certificates directly to the public on a
continuous basis. No other person is involved in the distribution or will
receive any compensation in connection therewith.
The Certificates are not insured or guaranteed by any governmental agency
or other entity. In this respect the Certificates represent a greater degree
of risk than an insured deposit in a bank or other financial institution.
PROSPECTIVE INVESTORS SHOULD CONSIDER THE MATTERS SET FORTH UNDER
"INVESTMENT CONSIDERATIONS AND RISK FACTORS."
------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION, NOR HAS THE COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<TABLE>
<CAPTION>
===============================================================================
Underwriting
Price to Discounts &
Public Commissions Proceeds (1)
- -------------------------------------------------------------------------------
<S> <C> <C> <C>
Per Certificate 100% None 100%
- -------------------------------------------------------------------------------
Total(2) $25,000,000 None $25,000,000
===============================================================================
</TABLE>
(1) Less expenses of the offering estimated at $65,170. Because the Certificates
are being sold directly by the Company without underwriting, there is no
assurance as to the amount of proceeds to be received therefrom.
(2) No separate amount has been allocated to any series.
------
The Company reserves the right to reject, in whole or in part, any
application to purchase these securities.

The date of this prospectus is , 1995.

<PAGE> 4
AVAILABLE INFORMATION

The Company is subject to the informational requirements of the Securities
Exchange Act of 1934 and in accordance therewith files reports and other
information with the Securities and Exchange Commission. Such reports and
other information filed by the Company can be inspected and copies made at
the offices of the Commission at Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549, and the Commission's Regional Offices in Chicago
(Northwestern Atrium Center, 500 West Madison Street, Suite 400, Chicago,
Illinois 60661) and New York (7 World Trade Center, 14th Floor, New York, New
York 10048); copies of such material may be obtained from the Public
Reference Section of the Commission, Washington, D.C. 20549 at prescribed
rates.

It is the Company's practice to send, on an annual basis, reports
containing audited financial statements to the holders of its subordinated
investment certificates.

INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

The following document, filed by the Company with the Securities and
Exchange Commission, is incorporated herein by reference and made a part
hereof as of the date of its filing: the Company's annual report on Form 10-K
for the year ended December 31, 1994.

Any statement contained in a document incorporated by reference in this
prospectus shall be deemed to be modified or superseded, for purposes of this
prospectus, to the extent that any statement contained herein modifies or
supersedes such statement.

The Company will provide without charge to each person to whom this
prospectus is delivered, on the request of such person, a copy (without
exhibits, other than exhibits specifically incorporated by reference) of any
and all documents incorporated by reference in this prospectus. Written or
telephone requests for such copies should be directed to Joanne Haberberger,
Secretary, Horrigan American, Inc, P. O. Box 13428, Reading, Pennsylvania
19612-3428; telephone number 610-775-5199.

<PAGE> 5
THE COMPANY

Horrigan American, Inc. is primarily engaged, through wholly-owned
subsidiaries, in the commercial equipment leasing and commercial financing
business and in the business of acquiring, leasing and managing
income-producing commercial real property. Unless the context requires
otherwise, references in this prospectus to the Company include Horrigan
American, Inc., these subsidiaries, and certain real estate partnerships
which are consolidated for financial reporting purposes.

Horrigan American, Inc. was organized as a Pennsylvania corporation in
1982 to be a holding company for the various lines of business conducted by
its subsidiaries. Its executive offices are located at 6 Commerce Drive,
Shillington, Pennsylvania 19607-9704; its mailing address is P.O. Box 13428,
Reading, Pennsylvania 19612-3428; its telephone number is 610-775-5199.

The Company historically has obtained a large portion of its funds from
long and short-term borrowings from banks and other financial institutions,
and from the issuance of securities similar to those offered herein. This
offering is a continuation of earlier offerings of similar securities and is
made on a continuous basis directly by the Company without underwriting. The
Company expects that its efforts to market the securities offered by this
prospectus (collectively, the "Certificates") as well as the interest rates
and maturities of newly offered Certificates may be adjusted from time to
time depending upon its need for funds.

CERTAIN RECENT DEVELOPMENTS

In November, 1994 the Company determined that is was appropriate for it to
consider its strategic alternatives and, in particular, the possibilities
of raising additional capital from a larger company, arranging for its
shareholders to sell a portion of their holdings, some combination of these
alternatives, or a sale of its business as a whole. The Company has engaged
an investment banking firm to advise it about its alternatives and to identify
possible investors or purchasers.

To date no decision has been made with respect to these matters, and no
potential investor or purchaser has been identified to the Company. It is not
possible to predict with any assurance whether the Company will continue as an
independent company or be acquired in whole or part by a larger concern, or in
what form or at what price any such transaction might be accomplished. Nor has
the Company established any time frame within which it will make a decision.

If any such transaction takes place, it is not possible at this time to
predict whether it would include an early redemption of the Certificates by the
Company. Persons considering an investment in the Certificates should
understand that, because of the possibility of a significant transaction
involving the Company, there is some uncertainty whether the Certificates
will remain outstanding to maturity.

INVESTMENT CONSIDERATIONS AND RISK FACTORS

Prospective investors should consider the following matters:

Subordination. Payments of principal and interest on the Certificates are
subordinated to all present and future indebtedness of Horrigan American,
Inc. (including indebtedness of others which it has guaranteed) for borrowed
money or on account of capitalized leases or the deferred purchase price of
property or reimbursement obligations under letters of credit ("Senior
Debt"). Senior debt was $119,812,000 as of January 31, 1995. The indenture
under which the Certificates are issued does not limit the amount of
additional Senior Debt that the Company may incur. Further, no subsidiary of
Horrigan American, Inc. is liable on the Certificates. Thus, on any
insolvency or liquidation of Horrigan American, Inc. and its subsidiaries,
assets of subsidiaries would be available to pay the holders of the
Certificates only after creditors of subsidiaries had been paid, including
creditors whose claims do not constitute Senior Debt as defined.
Substantially all the Company's business activities are conducted, and
substantially all its assets are held, by subsidiaries. The Certificates rank
equally with indebtedness represented by past and future issues of
subordinated investment certificates. (See "Description of Subordinated
Investment Certificates" and "Capitalization.")

Certificates Not Insured. The Certificates are not insured or guaranteed
by any governmental agency or other entity. In this respect the Certificates
represent a greater degree of risk than an insured deposit in a bank or other
financial institution.

No Trading Market. It is not expected that there will be a trading market
for the Certificates. Except in the case of the Passbook Series (which are
redeemable on demand but not transferable), this may adversely affect a
purchaser's ability to liquidate his investment before his Certificate
matures or becomes redeemable.

Redemption. The Company may in its discretion, at any time, without
premium or penalty, redeem Certificates of one series without redeeming
Certificates of any other series and may redeem Certificates bearing one rate
of interest without redeeming Certificates of the same series bearing a
different rate of interest. Thus, holders of Certificates bearing relatively
higher rates of interest could lose the benefit of those higher rates if the
Company elected to redeem those Certificates. The Company has never used this
redemption provision in the past to eliminate higher-rate Certificates. There
can be no assurances, however, that it would not do so in the future.

<PAGE> 6

Economic conditions. Economic factors beyond the Company's control, such
as the general state of the economy, credit availability, rate of business
failures, commercial real estate vacancy rates, prevailing interest rates, and
changes in federal, state, and local tax laws could adversely affect the
Company's business by making funds less available and more expensive to borrow
and more difficult for the Company to collect its contractual lease, rental, and
finance payments resulting in potentially greater credit losses. The payment of
principal and interest to the Subordinated Certificate holders will be dependent
upon the Company's success in collecting payments, rentals, and equipment
residual values, and in selling commercial real estate and limited partnership
interests in commercial real estate, all of which, in turn, depend partially on
the state of the economy.

Risks of the real estate business. There has been a general downturn in
the commercial real estate market during the last few years. This can be
expected to adversely affect not only the prices at which the Company will be
able to rent its properties to tenants, but also its ability to sell or
refinance its properties and the prices it can expect to obtain on sale. In
1992, in recognition of these facts, the Company wrote down the book value of
its real estate assets by $4,302,000 and incurred a related after-tax,
non-cash charge to earnings of $2,773,000. As of December 31, 1993, the
Company reduced the book value of its real estate assets by an additional
$488,000 and incurred a related after-tax, non-cash charge to earnings of
$322,000. Market conditions improved in 1994 resulting in no further
reductions in book value. See "Business -- Real Estate."

PROSPECTUS SUMMARY

The following questions and answers will identify and answer some of the
more common questions which have been asked by the investing public over the
years. The information in this summary is qualified in its entirety by
reference to the more complete information included elsewhere in this
prospectus, which should be read prior to making any investment decision.

Who is Horrigan American, Inc.?

Horrigan American, Inc., a holding company, is the successor Pennsylvania
corporation to a business started in 1927 and conducts business through the
following operating companies and divisions: American Equipment Leasing Co.,
Inc.; AEL Leasing Co., Inc.; American Commercial Credit Corp.; American
Capital Leasing Corporation; and American Real Estate Investment and
Development Co. The Company's business is principally divided into commercial
equipment leasing, commercial financing, and real estate investment,
management and leasing. (See "Business -- General Nature of Business.")

How is Horrigan American, Inc. directed and managed?

Corporate direction, values, and goals are established by a nine-person
board of directors, including four senior Company officers and five
non-employee directors with a diversity of backgrounds in accounting, law,
corporate management, and investment. Day-to-day Company activities are
directed and managed by a staff of approximately 79 people including highly
trained and experienced professionals in the fields of corporate management
and funding, commercial equipment leasing and financing, real estate,
marketing, securities, accounting, law, information systems, communications,
and human resource management.

Are the Certificates insured or guaranteed?

The Certificates are not insured or guaranteed by any governmental agency
or other entity. In this respect the Certificates represent a greater degree
of risk than an insured deposit in a bank or other financial institution.

How does the Company use the funds from the sale of Subordinated Investment
Certificates?

Subordinated Investment Certificate funds provide the Company with working
capital to finance its commercial leasing and commercial financing
operations, to invest in real estate projects, to pay holders of Certificates
which mature, to invest in marketable securities or other non-affiliated
businesses, and/or reduce borrowing from financial institutions. (See "Use of
Proceeds.")

<PAGE> 7

Does the interest rate change?

For the 1995 Series 8, A, B, and C Certificates, the interest rate
established at time of purchase will remain fixed until the Subordinated
Investment Certificate matures or is redeemed. The interest rate on all
outstanding Passbook Series Certificates is subject to change on the first
day of each month based upon current market conditions.

How can I find out what interest rates are currently being offered?

The Company has established a "Hot Line" so that you can obtain current
interest rate information by calling 610-375-7480 or contacting the Company
through its Fax number 610-478-8122.

When is the interest paid?

Semi-annually each June 1 and December 1. If a Certificate is purchased
for $10,000 or more, or if you hold Passbook Series Certificates aggregating
$10,000 or more, you may elect to have your interest paid quarterly or
monthly.

What happens when my 1995 Series 8, A, B or C Subordinated Investment
Certificate matures?

When a 1995 Series 8, A, B or C Certificate matures, unless the holder or
the Company otherwise elects, it will automatically "roll over" into a fixed
rate subordinated investment certificate of the series then being offered
with the same term as the maturing Certificate, but at the then current
interest rate for newly issued certificates of that series. Similar
provisions are expected to be included in future series of subordinated
investment certificates. The Company will send the holder notice of the
automatic roll-over and a copy of the then current prospectus for the new
series of certificates, at least 15 days before maturity. The Company will
also send the holder notice of the interest rate for the series of new
certificates on approximately the first day of the month in which the
holder's Certificate matures. The holder may elect not to roll over his
Certificate by redeeming it at maturity or within ten days thereafter, in
which case interest will be paid only to maturity. The Company may also elect
not to roll over a Certificate by sending notice to that effect to the holder
at least 15 days before the maturity date. (See "Description of Subordinated
Investment Certificates -- The Fixed Rate Certificates -- Automatic
Roll-Over.")

May I redeem my Subordinated Investment Certificate before maturity?

All 1995 Series 8, A, B, and C Certificates are redeemable without penalty
before maturity, upon the death of the holder or the co-holder, for a period
of one year from the date of death, but are otherwise not redeemable before
maturity.

The Passbook Series Certificates are payable on demand, but no interest
will be paid on a Passbook Series Certificate if it is redeemed by the holder
before the eighth day after the date of issuance.

When may the Company redeem my Subordinated Investment Certificate?

At any time, without premium or penalty. The Company may in its discretion
redeem Certificates of one series without redeeming Certificates of any other
series and may redeem Certificates bearing one rate of interest without
redeeming Certificates of the same series bearing a different rate of
interest.

What does "subordinated" mean?

The term "subordinated" defines the relative positions of the Subordinated
Investment Certificate holder and other creditors of the Company in the event
of the Company's insolvency or liquidation. In the event of an insolvency or
liquidation situation, holders of Certificates would receive payments of
principal and interest only after the payment in full of all indebtedness of
Horrigan American, Inc. (including indebtedness of others which it has

<PAGE> 8

guaranteed) for borrowed money or on account of capitalized leases or the
deferred purchase price of property or reimbursement obligations under letters
of credit. If any such indebtedness were not paid at maturity, or otherwise
became in default, the Company would be prohibited from making payments of
principal or interest on the Certificates until the indebtedness was paid or the
default cured or waived.

No subsidiary of Horrigan American, Inc. is liable on the Certificates.
Thus, on any insolvency or liquidation of Horrigan American, Inc. and its
subsidiaries, assets of subsidiaries would be available to pay the holders of
the Certificates only after creditors of subsidiaries had been paid,
including creditors whose claims do not constitute Senior Debt as defined.
Substantially all the Company's business activities are conducted, and
substantially all its assets are held, by subsidiaries.

Certificate holders would be entitled to payment of principal and interest
before any payment could be made to preferred or common stockholders, or
holders of the Company's Junior Subordinated Debentures, as such. The
Certificates offered hereby rank equally in priority with past and future
series of the Company's Subordinated Investment Certificates. (See
"Description of Subordinated Investment Certificates -- General --
Subordination.")

Are the Subordinated Investment Certificates subject to Pennsylvania personal
property tax?

No. The Certificates are subject to the Pennsylvania corporate loans tax,
which the Company agrees to pay.

Do I pay any fees when purchasing these Subordinated Investment Certificates?

No. There are no broker's fees or commissions of any kind.

Whom do I contact if I have additional questions or wish to purchase?

Use the "Hot Line," 610-375-7480, asking for Beatrice A. Kennedy,
Assistant Vice President -- Investment Certificates or Carol A. Lombardo,
located at Berkshire Plaza, 517 Reading Avenue, West Reading, Pennsylvania;
or John F. Horrigan, Jr., Chairman of the Board, or Arthur A. Haberberger,
President, located at the Horrigan American Building, 6 Commerce Drive,
Shillington, Pennsylvania, at 610-775-5199; or write to any of the above
individuals at P.O. Box 13428, Reading, Pennsylvania 19612-3428.

CAPITALIZATION

The consolidated capitalization of the Company as of January 31, 1995, is
set forth below. No adjustment to give effect to the issuance of additional
Subordinated Investment Certificates has been made because the offering is
not the subject of a firm underwriting and it is not known how much of the
Certificates will be sold. (See "Use of Proceeds.") The Certificates offered
hereby are subordinated to the indebtedness reflected below under the
captions "Unsecured Bank Debt", "Secured Bank Debt" and "Nonrecourse Debt".
For information concerning the Company's long-term debt and its obligations
under operating leases of real and personal property as of December 31, 1994,
see notes I and N to the consolidated financial statements.

<TABLE>
<CAPTION>
(In thousands)
- --------------
<S> <C>
Unsecured Bank Debt (1) ................................ $ 96,540
Secured Bank Debt (2) .................................. 4,996
Nonrecourse Debt (2) ................................... 18,122
Other Long-Term Debt ................................... 154
Subordinated Debt
Subordinated Investment Certificates
(4.25%-10.5%) (3) .................................... 28,706
Junior Subordinated Debentures (9%) (maturing 2002) ... 103
----------
Total Debt ........................................ $148,621
----------
6

<PAGE> 9

Stockholders' Equity
Common Stock -- par value $1 per share.
Authorized 10,000,000 shares; issued 3,128,262 shares
and outstanding 3,126,762 shares .................. 3,128
Capital in excess of par value ........................ 106
Net unrealized holding gains for available-for-sale
securities .......................................... 807
Retained earnings ..................................... 26,597
Less 1,500 shares of treasury stock, at cost .......... (14)
----------
Total stockholders' equity ........................ $ 30,624
----------
Total of debt and equity .......................... $179,245
==========
</TABLE>

(1) Unsecured bank debt consists of borrowings under the following
arrangements:

A. As of January 31, 1995, $53,739,000 was outstanding under lines of
credit totalling $86,777,000 with various banks and an industrial
manufacturing company vendor (for whom the Company provides commercial
leasing and financing services), under which the Company may make
fixed-rate borrowings. Depending upon individual bank commitments, pricing
is based upon the bank's prime/base interest rate, the 24 month to 36
month U.S. Treasury Note rates, or the bank's cost of funds as in effect
during the period in which the bank borrowing occurs. The interest rate
range for borrowings under these lines as of January 31, 1995 was 4.77% to
9.30%. Individual loans are drawn against these lines of credit which are
intended to be matched to the terms of commercial equipment leases,
commercial loans or other working assets originated and acquired by the
Company during the period. Aggregate borrowings under these lines are
limited to 90% of the net amount of qualifying commercial leasing and
commercial financing receivables. Repayment of the loans is on a monthly
basis which closely matches the repayment cycle of the financing
receivable portfolio. No compensating balances or commitment fees are
required for these lines of credit.

B. As of January 31, 1995, $16,500,000 was outstanding under lines of
credit totalling $24,000,000 with four banks, under which the Company may
make fixed-rate short-term borrowings (1 day to 120 days) at negotiated
interest rates. The interest rate range for borrowings under these lines
of credit as of January 31, 1995 was 6.81% to 7.38%.

C. The Company has a $5,000,000 floating interest rate line from one
bank. There was nothing outstanding on this line of credit as of January
31, 1995. The interest rate is the prime rate or base interest rate,
changing with prime rate or base rate changes.

D. The Company has unsecured lines of credit of $38,250,000 with three
banks. The Company has the option under these lines of credit to make
short-term, or long-term fixed-rate loans at negotiated rates for periods
of time up to 36 months. As of January 31, 1995, $24,301,000 in amortizing
long-term loans were outstanding under these lines, payable in
installments through February, 1998, with interest rates ranging from
5.59% to 9.10%.

E. As of January 31, 1995, the Company has a $2,000,000 loan, payable
interest only at a fixed rate of 5.85%. The principal is due at maturity,
March 1, 1996.

(2) For more detailed information concerning secured bank debt and
nonrecourse debt see note I to the consolidated financial statements.

(3) For more detailed information concerning the various series of
subordinated investment certificates, see notes H and I to the consolidated
financial statements.

As conditions of various bank loans, the Company has made certain
agreements with respect to its capital structure and other matters, the most
significant of which are described elsewhere in this prospectus. (See
"Business -- Certain Financial Covenants.") As of January 31, 1995, $193,000
in principal amount of certain previous issues of subordinated investment
certificates were payable on demand or subject to early redemption.

<PAGE> 10

Some of the loan agreements referred to above contain provisions creating
an event of default thereunder if the Company defaults under other loan
agreements and contain covenants which restrict certain actions by the
Company. (See "Business -- Certain Financial Covenants.")

USE OF PROCEEDS

The Company expects to use the proceeds of this offering for its general
corporate purposes. Among the uses to which the proceeds will be applied are
the financing of the Company's commercial leasing and lending operations,
including possible expansion, potential bulk purchase of commercial leasing
and/or loan portfolios, potential debt or equity investments in real estate
projects, potential diversification by the Company into other non-affiliated
business activities, the payment of holders of earlier series of subordinated
investment certificates as they mature or are redeemed, possible reduction of
long- and short-term bank borrowings, and loans to and other investments in
subsidiaries. The proceeds received from earlier similar offerings have been
used primarily for these purposes. How much of the proceeds will be used for
each of these various purposes will depend upon such factors as prevailing
interest rates, economic conditions which affect opportunities for expansion
and the willingness of holders to reinvest the proceeds of matured
certificates in new Certificates.

Pending application of proceeds of sales of the Certificates, the Company
may temporarily invest such proceeds in short-term investments, such as
certificates of deposit, commercial paper, government securities and money
market funds. Additional short- or long-term financing will be required from
time to time by the Company to carry on its business and will be effected at
such times and through such means as the Company may deem appropriate.

BUSINESS

GENERAL NATURE OF BUSINESS

The Company's business is principally divided into two segments:
commercial equipment leasing and commercial financing, and investments in
commercial real property leasing and rental projects.

The Company's assets primarily consist of: receivables from commercial
borrowers; direct finance leases with commercial lessees; and interests in
partnerships which own commercial real estate and rent it to others,
generally under operating leases.

As of December 31, 1994, approximately 81% of such assets were receivables
which arose from commercial equipment leasing and commercial financing, and
19% was real property owned by the Company and leased or rented to others
under operating leases.

COMMERCIAL EQUIPMENT LEASING AND COMMERCIAL FINANCING

The Company conducts its commercial equipment leasing and commercial
lending operations, on a national basis, primarily from its corporate
headquarters located in Reading, Pennsylvania. Additionally, the Company
maintains offices in Crestview Hills, Kentucky (a suburb of Cincinnati,
Ohio), Deerfield, Illinois (a suburb of Chicago), Portland, Oregon and
Orlando, Florida. Marketing personnel are also located in Pittsburgh,
Pennsylvania; San Diego and Los Angeles, California; Knoxville, Tennessee;
Boston, Massachusetts; Denver, Colorado; Seattle, Washington; and Chicago,
Illinois.

The Company conducts its leasing and lending activities in several ways. A
portion of its business is generated with customized sales aid leasing
programs for vendors of equipment. Direct customer solicitation programs
(telemarketing, mail solicitations, and direct customer visits and referrals)
focusing primarily on present and former lessees and commercial borrowers
also generate business for the Company. Also, four affinity marketing
divisions generate volume for the Company -- American Legal Funding which
offers funding programs specifically designed for the legal profession; the
Information Systems Funding Group which offers leasing and lending services
for the use or ownership of mid-size computers and computer software to
businesses; American Reli Financial which provides leasing and lending
services to general equipment rental centers; and Golf Capital which provides

<PAGE> 11

leasing and lending services to the country club and golf course industry.
Additionally, the Company through its General Services Division provides
equipment leases and asset-based loans to a broader range of customers not
serviced by the four affinity marketing divisions.

Sales aid leasing programs are programs wherein the Company provides full
pay out or finance instruments (usually on a nonrecourse basis to the product
seller) to assist sellers of commercial equipment in merchandising their
products. The Company approves all contracts prior to authorizing purchase of
the equipment under the sales aid leasing programs. No one program commitment
is expected to exceed 10% of the Company's annual commercial leasing/lending
volume.

As of December 31, 1994, the Company held $206,000 in repossessed
equipment and equipment returned to it at the conclusion of the lease terms
(classified as other assets on the consolidated financial statements).
Repossessed and returned equipment is initially recorded at no more than 70%
of estimated fair value and is periodically written down until resold.

Acquisitions

On June 1, 1994, the Company purchased all of the capital stock of
American Capital Leasing Corporation ("ACL"), whose principal business
consists of financing and leasing equipment. (See Note R to the consolidated
financial statements.) The Company operates the acquired business as a
separate subsidiary. The Company has retained all five employees of ACL.

On June 1, 1993, the Company purchased all of the capital stock of Canyon
Capital, Inc. ("Canyon"), whose principal business consisted of financing and
leasing equipment. The Company does not operate the acquired business under
the trade name Canyon and intends to liquidate the portfolio of leases and
loans while soliciting certain lessees for additional new business.

On January 31, 1992, the Company purchased substantially all the assets of
Reli Financial Corp. ("Reli"), whose principal business consists of providing
financing to the equipment rental industry. The Company continues to operate
this acquired business (as well as the other rental and financing activities)
under the trade name "American Reli Financial". Reli's pre-acquisition
policies, procedures and systems have been evaluated, and integrated with the
Company's management practices. Direct solicitation remains the focus
activity of this division, and has increased the Company's market penetration
through expanded direct marketing efforts and trade show participation.

Direct Finance Leasing

Finance leases, often referred to as full pay out or capital leases, are
non-cancellable contracts, generally for a longer term than operating leases,
under which the original equipment cost to the Company is generally less than
the stream of periodic payments to be received from the lessee during the
initial lease term.

The Company's direct finance leases are those which meet one or more of
the following four criteria: (a) the lease transfers ownership of the
property to the lessee by the end of the lease term; (b) the lease gives the
lessee an option to purchase the property at a price that is sufficiently
lower than the expected fair value of the property at the time the option
becomes exercisable such that its exercise appears, at the inception of the
lease, to be reasonably assured; (c) the lease term is equal to 75% or more
of the estimated economic life of the property; or (d) the present value of
the minimum lease payments at the beginning of the lease term equals or
exceeds 90% of the fair value of the property.

In the case of its direct finance leases, the Company retains title to the
asset, yet the lessee generally bears the contractual risk of loss and the
duty to maintain and insure the asset. The Company's principal exposure on a
direct finance lease is the lessee's ability to make payments (i.e., the
credit risk); therefore, only after the Company is satisfied of the lessee's
credit worthiness and of its ability to make future lease payments, and upon
receipt of an executed lease, does the Company issue a purchase order to a
manufacturer or vendor for the equipment. Generally, the lessee pays the
Company, over the non-cancellable term of the lease, an amount equal to the

<PAGE> 12

purchase price of the leased equipment, less its estimated unguaranteed residual
value, if any, at the end of the lease term, plus a gross profit. The lessee
generally has the option at the conclusion of the term of the lease to either
(1) renew the lease; (2) purchase the equipment at its then market value or for
a predetermined amount; or (3) return the equipment to the Company. The Company
records a direct finance lease on its books as a receivable. The terms of direct
finance leases vary in length with the size of the lease and the estimated
useful life of the leased property and generally range from 12 to 60 months. The
average original term of the Company's direct finance leases is approximately 37
months.

Direct finance leases are originated through dealer sales organizations,
or directly with the lessee. Approximately 40 marketing representatives and
support staff present the Company's leasing programs to dealer/vendors
(thereby providing their customers the alternative of lease financing when
acquiring various types of equipment), and/or engage in direct solicitation
programs focusing on present and former lessees and also potential new
lessees, generally through telemarketing and direct mail solicitation.
Because the Company generally purchases equipment from dealers on a
nonrecourse basis, the leasing transaction provides a sale for the
dealer/vendor of the product. Frequently, former or existing lessees request
to lease additional equipment from the Company. Upon re-examination and
approval of the credit risk (including the lessee's credit, capacity to pay,
and nature of the leased property) the Company makes a decision to purchase
equipment for lease to the direct lessee.

As of year-end 1994, the Company owned and serviced 5,184 direct finance
lease contracts. No individual lessee had direct finance leases accounting
for more than 1.4% of the total finance lease contracts outstanding as of
December 31, 1994. (See note C to the consolidated financial statements for
concentration of credit risk related to finance receivables.) Direct finance
lease contracts (direct finance leasing receivables plus residual valuation
less unearned income) totalled $123,040,000 as of December 31, 1994.

Commercial Financing

The Company engages in commercial financing transactions with various
commercial customers. Commercial loans are generally secured by inventory,
receivables, equipment, or real estate. Installment loan agreements under
which a seller of commercial equipment enters into an installment sale of
equipment to a buyer are discounted by and assigned to the Company. Criteria
to qualify for commercial loans include credit worthiness, ability to make
future payments, and the quality of collateral used to secure the loans. As
of December 31, 1994, the Company had 1,022 commercial loans totalling
$31,088,000.

As of December 31, 1994, the Company held $600,000 in real estate from
foreclosures on one commercial loan. The real estate is recorded at estimated
fair value (net of disposal costs) and is included in other assets on the
consolidated financial statements.

REAL ESTATE

The Company, through American Real Estate Investment and Development Co.,
a wholly-owned subsidiary, is in the business of making and managing
investments in commercial real property for itself and on behalf of third
party investors. This activity principally involves the formation and
management of investment partnerships, asset management, and related advisory
and funding activities. The Company's portfolio was acquired through
sale/leaseback transactions, where existing buildings are purchased and
leased back to the seller; build-to-suit projects, where buildings are
constructed for lease to a specific tenant; or through the acquisition of
specific properties from third parties. In some instances, properties are
acquired in joint venture with other investors or management companies.
Presently the Company subcontracts all day-to-day asset management
responsibilities to third parties with whom the Company works closely.

The emphasis the Company places on the activities of buying, managing
and/or selling properties tends to vary from time to time in concert with the
markets and the Company's objectives. Beginning 1991, the Company primarily

<PAGE> 13

focused on managing and refinancing its existing properties. The selective
purchase of real estate assets resumed in 1994 as certain market conditions
appeared attractive. The Company also remained active in the sale of certain
individual assets and groups of assets, as it does from time to time. It is
likely that certain property sales will be consummated in 1995 based on present
marketing activity.

The forty-three properties owned and managed as of December 31, 1994 are
classified as follows: eighteen are office buildings, sixteen are industrial
buildings, two are limited service hotels, five are various retail centers,
and two are various other commercial properties. Fifteen of the properties
are multi-tenant, excluding the hotels. In these projects, assistance in
leasing and other onsite management activities is provided either by
co-managing partners local to the project or through third party management
companies (or both). The Company is general partner in Hampton Inn hotels in
Flint, Michigan, and Allentown, Pennsylvania, and provides hotel management
services through American Hotel Management, Inc., a subsidiary of the
Company.

The Company has in a select few instances made operating loans to
individuals or corporate entities in connection with its real estate
investment activities. These loans are included in the "Commercial Financing"
section.

Write-down

The Company's commercial real estate is affected by market driven changes
in value and by specific factors affecting individual properties. Market
conditions improved in 1994, and appear to have recovered substantially since
falling in previous years.

Generally accepted accounting principles which govern the Company's
reporting of its carrying value of assets do not permit the Company to
increase the reported book value (original cost less accumulated
depreciation) of properties which increase in fair value. However, properties
that are believed to have experienced material decreases below book value, of
a permanent nature, must be written down by the Company in the current
reporting period at the time of such determination. As of June 30, 1992,
eleven properties were believed to have had an estimated current fair value
materially below book value. The Company, in order to reflect this value
degradation, incurred a charge to earnings, net of deferred taxes and net of
losses allocable to minority interests, of $2,773,000 and reduced its share
of reported book value in real estate assets by $4,302,000, to $33,836,000.
As of December 31, 1993, the Company incurred an additional charge to
earnings, net of deferred taxes, of $322,000, and reduced its share of
reported book value in real estate assets by $488,000 to $31,419,000.

Management used the best information reasonably available to develop its
estimates of market value. Future changes to these estimates may be necessary
if conditions differ substantially from the assumptions used in developing
these valuations.

Investment in Real Estate Partnerships

The following table is a summary of the Company's total investment in and
operating results from consolidated and unconsolidated real estate
partnerships based on the Company's specific ownership percentages. (See
"Write-down.")

(In thousands)
- ----------------------------------------------------------------------------------------------------------------------
Income Before Taxes Noncash expenses included Gain on
Year Investment in Real From Real Esta in Income Sale of
Ended Estate Partnerships Partners Before Taxes Partnership
12/31 Consolidated Investee Consolidated Investee Total Write-down Depreciation Interests
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1994 $11,361 $121 $ 1,116 $ 773 $ 1,889 $ -- $1,078 $307
1993 9,441 (8) 380 (39) 341 488 1,146 --
1992 4,684 66 (3,209) (229) (3,438) 4,302 1,216 1
1991 7,496 978 111 (96) 15 -- 1,081 547
1990 6,941 468 86 (199) (113) -- 908 --
</TABLE>

<PAGE> 14

Investment in real estate partnerships increased in 1994 as a result of
the acquisition of two new partnerships, offset by several asset sales and
the sale of the Company's interest in one partnership. In January, 1995,
interest in one of the real estate partnerships acquired in 1994 was sold for
a gain.

Investment in real estate partnerships increased in 1993 primarily due to
the conversion of debt owed by the partnerships to the Company into capital,
capital contributions by the Company as part of the restructuring of one
partnership, and the purchase of limited partnership interests previously
held by third parties. The decrease in 1992 was due to the write-down of
property values (see "Write- down,"). Excluding the write-down, investment
levels in 1992 increased $578,000 from 1991. Substantially all of the
increase resulted from the purchase of limited partnership interests in
investee partnerships previously held by third parties.

Although since its inception the Company has not sold properties
representing a material amount of its investment in real estate partnerships,
it is likely in the near future that property sales will represent a more
significant part of the Company's real estate business.

Income before taxes from real estate partnerships is the aggregate of the
Company's proportionate share of such income from all partnerships in which
the Company has ownership interests. This income measure includes both income
or loss from operations (i.e., rental income less operating expenses,
interest charges, and depreciation), and income or loss from the sale of
properties owned by the partnerships. Income before taxes in 1994 increased
from both recurring operations, due to improved occupancy and stabilized
operating rentals, and the sale of various partnership properties. Income
before taxes in 1993 and 1992 was negatively impacted by the write-downs
described above. Excluding the write-down in 1993, income before taxes was
$829,000. Excluding the write-down of $4,302,000 (including an adjustment for
$198,000 of losses attributable to minority interests), income before taxes
from real estate partnerships in 1992 was $666,000, an improvement from 1991.
The improvement in 1993 and 1992 was substantially attributable to lower
interest costs rather than an improvement in the operation of the Company's
real estate. In general, profitability from operations remains susceptible to
the impact of lease expirations and the lowering of certain rents, although
this risk has somewhat diminished.

The sale of the Company's interest in one partnership to a third party,
through the exercise of a purchase option, accounted for the gain on sale of
partnership interests in 1994. In 1993 and 1992 the Company generated only a
nominal gain on sale of partnership interests as no meaningful sales activity
was conducted. This inactivity was due primarily to poor market conditions
resulting from general investor uncertainty over values and concerns over
real estate's relative illiquidity. The Company's activities in earlier years
had consisted of sales involving one to three partnerships. The Company
considers sales based on (i) the Company's need for additional liquidity,
(ii) the extent to which the Company has access to the market for limited
partnership capital, and (iii) the attractiveness of the Company's
partnership interests as a vehicle for resale to limited partner investors.

The extent of gain on sale of partnership interests is dependent on a
number of factors: the selling price (which is dependent on the yields
necessary to attract investors as compared with the yields generated by the
partnership), selling costs, and the book value of the interests being sold,
against which gain is measured. The book value of a given interest is
dependent in part on depreciation charges previously taken, which in turn is
a function of the length of time the partnership interest has been held prior
to sale and other factors. Because of the interaction of these various
factors, the Company's gain on sale of partnership interests has not shown
any consistent pattern over the last five years, and the Company does not
expect to recognize significant gains from the sale of partnership interests
in the near term.

Real Estate Financing and Contingencies

The Company has commercial loans outstanding to, and has guaranteed
portions of the debt of, eight unconsolidated real estate partnerships (See
notes E and O to the consolidated financial statements). The Company's
ownership interest in these partnerships range from 15% to 58.2% in 1994 and

<PAGE> 15

from 10% to 58.2% in 1993. As of December 31, 1994 and 1993, commercial loans
outstanding to these partnerships totalled $2,299,000 and $2,412,000,
respectively, and the guaranteed portions of the debt of these partnerships
were $2,253,000 and $2,400,000, respectively.

COMPETITION

The Company competes with a number of financial institutions, including:
domestic and foreign commercial and savings banks; independent leasing and
finance companies; captive manufacturer- related, vender-affiliated leasing
and finance companies; and diversified financial services companies,
including insurance companies and pension funds, other credit grantors and
other real estate investment companies. These competitors include large
companies operating on a national basis and smaller local entities. Based
upon Asset Finance & Leasing Digest's most recent listing, the Company was
the 40th largest finance company in the United States, based on 1993
originations (as measured by cost of new equipment added) and the 41st
largest based on 1993 portfolio size.

Competition is based on the size and length of contracts, the interest or
rental rate, other finance and service charges, assessment of the residual
value, name recognition, reputation and customer service. The Company
believes that it has been able to compete successfully against larger
competitors because its employees' in-depth knowledge of the industries they
are serving and the availability of information through its systems enable
the Company to offer superior response to its customers' needs.

LITIGATION

The Company is party (plaintiff or defendant) to certain legal actions.
While any litigation has an element of uncertainty, management, after
reviewing these actions with legal counsel, is of the opinion that the
liability, if any, resulting from these actions will not have a material
effect on the financial condition or results of operations of the Company.

PROPERTY

The Company owns (through a consolidated real estate partnership) the
Horrigan American, Inc. headquarters building in Flying Hills, Reading,
Pennsylvania, which also houses the AEL Leasing Co., Inc. corporate staff and
most of the commercial leasing and lending staff of this subsidiary, and
other tenants. This office space is suitable and adequate for the Company's
office staff and supporting computer operations, which principally utilize
telephone, fax, and computer equipment. The Company has space available in
these facilities which should adequately cover its growth requirements.

The Company leases its commercial leasing/lending offices in Deerfield,
Illinois (a suburb of Chicago), Crestview Hills, Kentucky (a suburb of
Cincinnati, Ohio), Portland, Oregon and Orlando, Florida. American Real
Estate Investment and Development Co. leases its corporate office in Chicago,
Illinois. Rental expense for the year 1994 for the Company's leased offices
was $167,000. These leases expire at various times through July, 2000. (See
note N to the consolidated financial statements.) The Company believes that
alternative office space is available in all areas.

EMPLOYEES

As of December 31, 1994, the Company had 75 full-time and 4 part-time
employees. The Company encourages its employees to participate in college and
other professionally-sponsored programs to further their knowledge and
professional expertise. Effective January 1, 1994, the Company has a 401(k)
plan covering substantially all employees who qualify as to age and length of
service. This plan includes a profit sharing component. Previously, the
Company had two defined contribution profit sharing plans. The Company
provides health, life, and disability insurance protection; educational
assistance; supplemental health care expense reimbursement; and other
standard employee benefits during, but not after, employment with the
Company.

<PAGE> 16

CERTAIN FINANCIAL COVENANTS

In connection with various bank loans, AEL Leasing Co., Inc., American
Commercial Credit Corp., and American Capital Leasing Corporation, as well as
American Equipment Leasing Co., Inc. (a wholly-owned subsidiary of Horrigan
American, Inc. that owns all the stock of those three subsidiaries), have
made certain agreements with respect to their capital structures and other
matters, the most significant of which are described below.

(i) American Equipment Leasing Co., Inc. and its subsidiaries, on a
consolidated basis, must maintain (a) a minimum cash flow ratio of
receipts to disbursements, as specifically defined, of 1 to 1, (b) a ratio
of debt to tangible net worth not in excess of 7 to 1, and (c) a minimum
tangible net worth of $21,000,000. As of December 31, 1994, the cash flow
ratio of receipts to disbursements was 1.32 to 1.00, the ratio of debt to
tangible net worth was 4.21 to 1.00, and tangible net worth totalled
$28,772,000.

(ii) AEL Leasing Co., Inc., American Commercial Credit Corp. and
American Capital Leasing Corporation, on a separate company basis, must
each maintain a ratio of debt to tangible net worth not in excess of 7 to
1. As of December 31, 1994, the ratio of debt to tangible net worth was
3.92 to 1.00 in AEL Leasing Co., Inc., 4.88 to 1.00 in American Commercial
Credit Corp. and 2.78 to 1.00 in American Capital Leasing Corporation.

The Company is in compliance with the above covenants as of December 31,
1994.

FINANCIAL INFORMATION RELATING TO INDUSTRY SEGMENTS

See note M to the consolidated financial statements for information
relating to the Company's total revenues, operating profit, and identifiable
assets by industry segments.

AVERAGE INTEREST RATES

The following table sets forth information regarding weighted average
interest rates on the Company's borrowed funds during the periods indicated.

<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------
Year Ended December 31,
----------------------------------------------------
1994 1993 1992 1991 1990
- -------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Short-term borrowings ........ 5.36% 4.42% 5.31% 7.27% 9.28%
Long-term borrowings ........ 7.29% 7.56% 8.85% 10.06% 10.43%
Total borrowings ............ 7.00% 7.24% 8.57% 9.77% 10.24%
</TABLE>

DESCRIPTION OF LEASING AND FINANCING ACTIVITIES

The following table contains information concerning the volume of the
Company's activities for the periods indicated.

<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------
At and for Year Ended December 31,
--------------------------------------------------------------------------------
1994 1993 1992 1991 1990
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
COMMERCIAL EQUIPMENT LEASING AND FINANCING
Total Number of Leases and Loans Made .... 2,469 2,956 3,090 4,124 5,764
Total Volume of Leases and Loans Made .... $131,242,549 $106,997,984 $ 91,364,104 $ 80,954,067 $ 95,498,633
Average Balance Per Lease and Loan Made .. $ 53,156 $ 36,197 $ 29,568 $ 19,630 $ 16,568
Number of Leases and Loans Outstanding ... 6,206 8,492 10,488 13,942 16,917
Total of Lease and Loan Receivables ...... $175,686,000 $144,313,000 $127,880,000 $131,267,000 $149,302,000
Average Balance Per Lease and Loan
Outstanding ............................. $ 28,309 $ 16,994 $ 12,193 $ 9,415 $ 8,826
</TABLE>

<PAGE> 17

REAL ESTATE OPERATING LEASES
Total Number of Operating Leases Made ..... 2 -- -- 1 8
Total Volume of Operating Leases Made ..... $ 5,872,000 $ -- $ -- $ 3,166,000 $18,824,000
Average Balance Per Operating Lease Made $ 2,936,000 $ -- $ -- $ 3,166,000 $ 2,353,000
Number of Operating Leases Outstanding .... 28 28 30 29 28
Total Book Value (net of depreciation) of
Property Held Subject to Operating Leases. $34,641,000 $31,419,000 $34,687,000 $37,483,000 $35,284,000
Average Balance Per Operating Lease
Outstanding .............................. $ 1,237,179 $ 1,122,107 $ 1,156,233 $ 1,292,517 $ 1,260,143
</TABLE>

The volume of leases and loans made represents the total gross assets
generated by the Company's own sales staff and by the acquisition of leases
and/or loans from third parties. The Company is generally active in both of
these areas, but emphasizes principally its own sales staff.

Gross volume included leases and loan balances purchased in connection
with certain acquisitions of $16,823,000 in 1994, $22,410,000 in 1993, and
$19,866,000 in 1992. (See "Business -- Commercial Equipment Leasing and
Commercial Financing -- Acquisitions.") In addition, a portfolio of finance
receivables totalling $4,988,000 was purchased in 1993. Excluding the effect
of these acquisitions, the Company has generated an increase in volume of new
leases and loans in 1994 and 1993 compared to 1992. This increase is
attributable to a healthier economy, and improved marketing and sales
efforts. The decrease in volume prior to 1993 was due to several factors: (i)
competition, as many financial sources have developed the capacity to offer
financial products directly or indirectly competitive to the Company's
business; (ii) the recession, during which time capital spending slowed;
(iii) tightening credit standards, particularly affecting 1991 and 1992; and
(iv) the narrowing of the Company's marketing and sales efforts to include
fewer industry, customer, and equipment types.

The trend toward larger per unit leases and loans (as reflected in the
annual increases since 1989 in the average balance of loans and leases made
and outstanding) is expected to continue and is consistent with Company
strategy. Larger balances provide the Company with certain operational
efficiencies in both originating and servicing the lease and loan portfolio.

Real estate operating leases represent newly acquired properties subject
to operating leases. As discussed above (see "Business -- Real Estate --
Investment in Real Estate Partnerships"), the Company purchased properties in
1994 as certain market conditions were favorable for acquisitions. No
properties were acquired in 1993 and 1992 due to the Company's interest in
preserving capital flexibility and concerns over value declines and
liquidity.

As the table indicates, the average price of property acquisitions ranged
between $2-3 million since 1989, consistent with the Company's strategy. It
was determined that larger assets enable the Company to attract higher
quality asset management services, a broader availability of mortgage
financing, and various operating efficiencies.

DELINQUENCY

A commercial lease or commercial finance receivable is considered
delinquent whenever the full amount of a contractually required payment is
not made within 60 days after its due date, unless a mutually agreed-upon
extension/interest payment, accompanied by a full contractual payment, has
been received. Extension/interest payments on commercial leases and
commercial finance accounts are generally restricted to two per year.
Delinquent accounts do not include receivables classified as non- performing
(see "Non-performing Assets") below.

<PAGE> 18

The table which follows sets forth the Company's monthly average dollar
amounts and percentages delinquent for the twelve months of each year.
Classifications are in accordance with present contract terms.

<TABLE>
<CAPTION>
(In thousands)
- --------------------------------------------------------------------------------
61 to 90 Over 61 to 90 Over
Days 90 Days Days 90 Days
Year Past Due Past Due Total Past Due Past Due Total
- --------------------------------------------------------------------------------
COMMERCIAL EQUIPMENT LEASING AND FINANCING
Total Unpaid Average Gross % Of Average Gross
Balances Receivables
------------------------------ -------------------------
<S> <C> <C> <C> <C> <C> <C>
1994 .. $ 810 437 $1,247 0.48% 0.26% 0.75%
1993 .. $1,175 718 $1,893 0.85% 0.52% 1.37%
1992 .. $1,657 1,282 $2,939 1.17% 0.91% 2.08%
1991 .. $1,997 1,378 $3,375 1.40% 0.97% 2.37%
1990 .. $1,340 1,018 $2,358 0.85% 0.64% 1.49%
</TABLE>

During 1994, average delinquency as a percentage of average gross
receivables decreased to 0.75% from 1.37%. This decrease is reflective of
several factors, principally: (i) an improving economy; (ii) tighter
underwriting standards for new leases and loans; and (iii) more effective
servicing and collection efforts given the narrower market focus of the
Company's sales efforts.

NON-PERFORMING ASSETS

Non-performing assets include the following four asset classifications:
receivables over ninety days contractually delinquent, receivables pending
settlement, receivables restructured, and inventory.

Receivables over 90 days past due include the total of all commercial
lease and commercial finance net receivable balances, which are contractually
delinquent by more than ninety days.

Receivables pending settlement are net receivables which are (i) the
subject of disputes with lessees that senior management believes will be
resolved within a reasonable time, and in which the credit of the obligor is
deemed sound, (ii) subject to some form of legal proceeding, either
litigation initiated by the Company to compel a borrower to honor the terms
of the lease or loan, or proceedings extending from a bankruptcy prior to
formal affirmation or rejection of the receivable, (iii) subject to a
repossession, or (iv) subject to an insurance claim in which the Company is
the loss payee.

Receivables restructured include (1) net receivables that are subject to a
concession of original contractual principal and/or interest and which (i)
the Company has formally settled litigation and payments have recommenced,
(ii) the borrower in bankruptcy has reaffirmed the debt to the Company and
payments have recommenced, or (iii) the Company has renegotiated the terms of
the lease or loan; and (2) net receivables which the Company has determined
that a reasonable doubt exists as to the collectibility of additional income.
Generally the Company applies payments to principal only. (See Note C to the
consolidated financial statements.)

Inventory is comprised of various repossessions made by the Company,
equipment returned at the expiration of various leases and real estate owned.
Repossessed inventory is initially recorded at 70% of its estimated wholesale
value, and returned inventory is recorded at the lower of residual value or
estimated fair value.

<PAGE> 19

The following table contains information on each of the four asset
classifications of non-performing assets, and measures the total
non-performing assets as a percent of working assets (total net investment
plus the allowance for possible lease and loan losses) and inventory.

<TABLE>
<CAPTION>
(In thousands)
- -----------------------------------------------------------------------------------------------------
Non-performing Assets
---------------------------------------------------------------- Non-performing
Working Assets as a
Year Receivables Receivables Assets and % of Working
Ended Over 90 Days Pending Receivables Inventory Assets and
12/31 Past Due Settlement Restructured Inventory Total (at 12/31) Inventory
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
COMMERCIAL LEASING AND FINANCING
1994 $ 178 416 9 806 $1,409 $154,934 0.91%
1993 $ 498 392 126 831 $1,847 $128,413 1.44%
1992 $ 530 651 715 1,195 $3,091 $113,793 2.72%
1991 $1,322 833 891 174 $3,220 $114,325 2.82%
1990 $ 988 814 1,111 502 $3,415 $128,886 2.65%
</TABLE>

Total non-performing assets declined at December 31, 1993 and 1994,
reflecting the influence of more stringent underwriting standards adopted by
the Company in 1992, the aggressive charge-off philosophy implemented during
the same year, and improved economic activity.

ALLOWANCE FOR POSSIBLE LEASE AND LOAN LOSSES

The Company maintains an allowance for possible lease and loan losses
based on a periodic evaluation of the finance receivable portfolio. This
allowance reflects an amount that in management's opinion is adequate to
absorb known and inherent losses in the portfolio. Management considers a
variety of factors when evaluating the allowance, recognizing that an
inherent risk of loss always exists in the lending process. Consideration is
given to the impact of current economic conditions, diversification of the
loan portfolio, historical loss experience, results of loan reviews,
borrowers' financial and managerial strengths, the adequacy of underlying
collateral and other relevant factors. While management uses the best
available information to make such evaluations, future adjustments to the
allowance may be necessary if conditions differ substantially from the
assumptions used in making the evaluation. The provision for possible lease
and loan losses is charged to operating expense. Lease and loan losses are
charged directly against the allowance, and recoveries on previously
charged-off leases and loans are added to the allowance.

The Company allocates a portion of the allowance in anticipation of future
lease and loan losses on certain individually significant accounts whenever
there is a possible event of default by (a) one or more lessees because of a
vendor problem or (b) an individual lessee with one or more leases with a
combined principal balance in excess of $125,000. As of December 31, 1994,
$135,000 of the allowance was allocated for this purpose.

The following table contains information concerning the provision for
possible lease and loan losses, the Company's loss experience, and the
allowance for possible lease and loan losses.

<TABLE>
<CAPTION>
(In thousands)
- ---------------------------------------------------------------------------------------------------------------------

Provision Allowance Gross
for For Possible Investment Allowance
Year Possible Net Loss Experience Lease and Loan In as a
Ended Lease and --------------------------------------- Acquired Losses Receivables % of Gross
12/31 Loan Losses Charge-offs Recoveries Net Losses Allowance (at 12/31) (at 12/31) Receivables
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
COMMERCIAL LEASING AND FINANCING
1994 $1,377 (1,792) 818 (974) 214(A) $6,055 $175,686 3.45%
1993 $1,573 (2,736) 1,136 (1,600) 852(A) $5,438 $144,313 3.77%
1992 $2,190 (3,205) 1,178 (2,027) 240(A) $4,613 $127,880 3.61%
1991 $4,580 (5,033) 1,095 (3,938) 225(A) $4,210 $131,267 3.21%
1990 $3,977 (4,056) 496 (3,560) -- $3,343 $149,302 2.24%
</TABLE>

(A) The balance of the allowance for possible lease and loan losses increased
as a result of the acquisition of portfolios of finance receivables.

<PAGE> 20

The allowance has increased in each of the years 1994, 1993 and 1992
because of the increase in total outstanding balances, despite a decrease in
net losses. While the Company's new business efforts involve a general shift
to higher balance accounts with somewhat higher credit quality -- and
therefore the potential for reduced losses and provision for losses over time
- -- the Company determined that no reduction in the allowance was appropriate
at this time, given the potential for larger individual losses, industry
and/or equipment concentrations which may result from these changes, and the
loss exposure associated with the remaining balance of acquired finance
receivables. In 1991 and 1990, the allowance increased as net losses
increased.

SELECTED FINANCIAL DATA
HORRIGAN AMERICAN, INC. AND SUBSIDIARIES

<TABLE>
<CAPTION>
Year ended December 31,
-----------------------------------------------------------
1994 1993 1992 1991 1990
----------- ----------- ----------- ----------- -----------
(In thousands of dollars, except per share data)
<S> <C> <C> <C> <C> <C>
Total revenues ....................................$ 28,625 $ 25,657 $ 23,096 $ 29,335 $ 29,684
Earnings (loss) from continuing operations (note 3) $ 3,688 $ 3,047 $ (413) $ 1,382 $ 1,218
Total assets ......................................$ 194,330 $ 164,953 $ 153,263 $ 158,787 $ 173,529
Long-term debt ....................................$ 131,213 $ 113,315 $ 112,465 $ 116,445 $ 121,479
Per common share (note 1)
Earnings (loss) from continuing operations .....$ 1.18 $ .92 $ (.13) $ .41 $ .36
Cash dividends declared ........................$ .38 $ .14 $ .08 $ .086 $ .166
Weighted average shares outstanding (note 1) ...... 3,120,916 3,278,159 3,310,584 3,328,109 3,361,468
Ratio of earnings to fixed charges (note 2) ....... 1.62 1.54 -- 1.17 1.14
</TABLE>

See accompanying notes to selected financial data.

HORRIGAN AMERICAN, INC. AND SUBSIDIARIES
NOTES TO SELECTED FINANCIAL DATA

1. Per Share Amounts Earnings from continuing operations per common share were
computed using weighted average shares and dilutive stock options
outstanding during each year after deducting preferred dividend requirements
from net earnings, and the purchase of treasury stock. Earnings per common
share assuming full dilution were not reported because dilution arising from
the stock options is less than three percent.

2. Ratio of Earnings to Fixed Charges The ratio of earnings to fixed charges
has been computed by dividing earnings plus fixed charges by the fixed
charges. Earnings for this purpose includes earnings from continuing
operations plus income taxes less equity in undistributed earnings of
unconsolidated affiliates. Fixed charges are considered to consist of
interest expense attributable to continuing operations and the portion of
rentals deemed representative of the interest factor. The ratio of earnings
to fixed charges is not expected to change by more than 10% as a result of
this offering. The Company guaranteed $2,253,000 of debt of unconsolidated
real estate partnerships as of December 31, 1994. The amount of fixed
charges associated with this guaranteed debt was $205,000 for 1994. The
computation of the ratio of earnings to fixed charges does not include the
fixed charges associated with the guaranteed debt because the Company has
not been required to honor the guarantees nor is it probable that the
Company will be required to honor the guarantees. In 1992, earnings from
continuing operations were inadequate to cover fixed charges by $269,000.
However, the ratio of earnings to fixed charges is not intended to disclose
cash flow from operations. In addition to the normal noncash expenses, such
as depreciation and provision for possible lease and loan losses, the
provision for write-down of real estate negatively affects the ratio for
1992. The ratio of earnings to fixed charges would be 1.35 if the provision
for write-down of real estate were excluded.

<PAGE> 21

HORRIGAN AMERICAN, INC. AND SUBSIDIARIES
NOTES TO SELECTED FINANCIAL DATA

3. Earnings (Loss) from Continuing Operations In 1993, the net earnings
included an after-tax charge of $322,000 which resulted from the write-down
of the Company's real estate assets by $488,000. Excluding the after-tax
effect of this write-down, the Company's results of operations in 1993 were
$3,369,000. In 1992, the net loss included an after-tax charge of $2,773,000
which resulted from the write-down of the Company's real estate assets by
$4,302,000. Excluding the after-tax effect of this write-down, the Company's
results of operations in 1992 were $2,360,000.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

EARNINGS (LOSS)

The Company generated net earnings of $3,688,000 for 1994, a 21% increase
from net earnings of $3,047,000 for 1993. The Company incurred a net loss of
$413,000 in 1992.

As a result of an overall revaluation of its real estate portfolio, the
Company reduced the book value of its real estate assets by $4,302,000 as of
June 30, 1992, and incurred a related after-tax, non- cash charge to earnings
of $2,773,000. As of December 31, 1993, the Company reduced the book value of
its real estate assets by an additional $488,000, and incurred a related
after-tax, non-cash charge to earnings of $322,000. (See "Business -- Real
Estate -- Writedown".) Excluding the after-tax effect of these write-downs,
the Company's results of operations in 1993 were $3,369,000, a 42.8% increase
from adjusted earnings of $2,360,000 in 1992.

TOTAL FINANCE REVENUE

Commercial leasing and financing revenue was $18,625,000 in 1994,
$17,401,000 in 1993 and $18,869,000 in 1992.

The Company's sales efforts have resulted in an increase in total volume
of new leases and loans in each of the past two years. This increase in
outstanding finance receivables has increased the average outstanding balance
of finance receivables and has started to offset the effect of lower yields.
Net direct finance lease receivables and commercial finance receivables
totalled $148,073,000 as of December 31, 1994 compared to $122,144,000 as of
December 31, 1993.

The decrease in commercial leasing and financing revenue in 1993 was
attributable primarily to lower effective yields on the lease and loan
portfolio. Lower yields resulted from both relatively lower market interest
rates which lowered the Company's lease and loan rates, and to the mix of the
Company's newly acquired leases and loans, which includes higher transaction
sizes where credit quality and rate sensitivity are believed to be higher.

While revenue levels have been lower than preferred by the Company,
reductions in credit losses have favorably impacted the Company.

FINANCE REVENUE MARGIN

Finance revenue margin represents the difference between total finance
revenues and the amount the Company pays as interest on short-term borrowings
and long-term debt allocated to finance receivables. The Company's finance
revenue margin was $11,642,000 for 1994, $10,890,000 for 1993, and
$10,425,000 for 1992.

The Company's finance revenue margin increased $752,000 (6.9%) in 1994
from 1993. Total finance revenues increased 7.0% in 1994 from 1993 and
interest expense increased 7.2% for the same period. The average interest
rate at which the Company prices its products decreased 121 basis points to
13.22% in 1994 from 14.43% in 1993. The average interest rate on the
Company's borrowings decreased 24 basis points to 6.60% in 1994 from 6.84% in
1993.

<PAGE> 22

Finance revenue margin increased in 1994 as a result of the $25,929,000
growth in finance receivables and the 7% increase in total finance revenues.
Interest expense increased at a faster rate than finance revenue due to
increased leverage.

The Company's finance revenue margin increased $465,000 (4.5%) in 1993
from 1992. This increase in finance revenue margin was the result of a faster
decrease (22.9%) in interest expense than the 7.8% decrease in total finance
revenues. The average interest rate at which the Company prices its products
decreased 111 basis points to 14.43% in 1993 from 15.54% in 1992. The average
interest rate on the Company's borrowings decreased 149 basis points to 6.84%
in 1993 from 8.33% in 1992.

The 1993 increase in finance revenue margin was due to the purchase of two
portfolios of finance receivables, during 1993, at a higher interest rate
spread. The Company continues to market higher average balance commercial
leasing and financing contracts, with lower yields to achieve improved asset
quality and economies of operations. The Company's Asset and Liability
Committee reviews this risk regularly and manages the matching of debt with
these finance receivables.

PROVISION FOR POSSIBLE LEASE AND LOAN LOSSES

The provision for possible lease and loan losses decreased $196,000
(12.5%) to $1,377,000 in 1994 and decreased $617,000 (28.2%) to $1,573,000 in
1993. The following table details the components of the provision for
possible lease and loan losses as of and for the years ended December 31,
1994, 1993 and 1992.

(In thousands)
- -----------------------------------------------------------------------------

<TABLE>
<CAPTION>
Provision Allowance
for Possible for Gross Allowance
Lease and Net Loss Experience Possible Investment as a % of
Year Loan --------------------------------------- Acquired Lease and Loan in Gross
Ended Losses Charge-offs Recoveries Net Losses Allowance(A) Losses Receivables Receivables
- ------- -------------- ------------- ------------ ------------ ------------ -------------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
COMMERCIAL LEASING AND FINANCING
1994 $1,377 (1,792) 818 (974) 214 $6,055 $175,686 3.45%
1993 $1,573 (2,736) 1,136 (1,600) 852 $5,438 $144,313 3.77%
1992 $2,190 (3,205) 1,178 (2,027) 240 $4,613 $127,880 3.61%
</TABLE>

(A) The balance of the allowance for possible lease and loan losses increased
as a result of the acquisition of portfolios of finance receivables.

The Company maintains an allowance for possible lease and loan losses
based on a periodic evaluation of the finance receivable portfolio.
Management considers current economic conditions, diversification of the loan
portfolio, historical loss experience, results of loan reviews, borrower's
financial and managerial strengths, the adequacy of underlying collateral and
other relevant factors in its evaluation. While management uses the best
available information to make such evaluations, future adjustments to the
allowance may be necessary if conditions differ substantially from the
assumptions used in making the evaluations. This allowance reflects an amount
that in management's opinion is adequate to absorb known and inherent losses
in the portfolio. Receivables which are determined to be uncollectible are
charged off against the allowance for possible lease and loan losses, and
recoveries on accounts previously charged off are credited to it.

As of December 31, 1994, the Company allocated $135,000 of the allowance
for possible lease and loan losses in anticipation of future losses on
certain individually significant accounts. This allocated allowance decreased
$155,000 in 1994 from 1993. As of December 31, 1993, the Company allocated
$290,000 of the allowance for possible lease and loan losses in anticipation
of future losses on certain individually significant accounts. This allocated
allowance decreased $125,000 in 1993 from 1992.

The Company's net charge-offs of commercial leasing and financing
receivables decreased by $625,000 (73.4%) in 1994 from 1993. The Company's

<PAGE> 23

net charge-offs of commercial leasing and financing receivables decreased by
$427,000 (21.1%) in 1993 from 1992. The decrease in net losses was the result of
improved underwriting standards, improved adjusting procedures, aggressive use
of legal remedies, strong remarketing efforts, and a healthier economy.

The Company continues to improve its asset quality and control
delinquency. The Company's tighter credit standards and more focused efforts
within several market niches, has enhanced asset quality. In certain
situations, larger down payments, additional security deposits, and/or
shorter terms are now required. An asset review committee monitors the
quality of the Company's assets. The Company's improved collection and
adjusting procedures have resulted in effective control of delinquent
receivables. Management believes the allowance for possible lease and loan
losses is adequate to cover estimated future credit losses.

NET OPERATING LEASE REVENUES

Net operating lease revenues represent rents on real estate and equipment
operating leases offset by related interest and depreciation expenses. Net
operating lease revenues decreased $365,000 (18.1%) in 1994 over 1993,
although total operating lease revenues increased $31,000 (0.6%) to
$5,712,000. Total equipment operating lease revenues increased $87,000 and
real estate operating leases revenue decreased $56,000 resulting from the
sale of properties in 1994 and 1993. Interest expense attributable to net
operating lease revenues increased $321,000 (12.8%) due to an increase in
mortgage debt outstanding during the period and higher interest rates. On
December 31, 1993, loans from the Company to several partnerships were
converted to capital contributions to these partnerships. The corresponding
interest incurred on this debt in 1994 is reflected as interest to fund real
estate operating leases. In 1993, this interest was appropriately included in
the Company's finance revenue margin. Depreciation expense attributable to
operating leases increased $75,000 (6.5%) primarily the result of an increase
in equipment operating leases and the acquisition of real estate property in
July and December, 1994, offset by a decrease in depreciation on real estate
operating leases due to the sale of properties in 1994 and 1993, and a lower
basis for certain real estate properties due to a $488,000 write-down to fair
value on December 31, 1993.

Net operating lease revenues increased $61,000 (3.1%) in 1993 over 1992,
although total operating lease revenues decreased $254,000 (4.3%) to
$5,681,000. The decrease in total operating lease revenues in 1993 was due
primarily to decreases in lease revenue resulting from the sale of two
properties in 1993 and the write-off of uncollectible rents, offset by rents
received on certain properties which were on a non-accrual basis in 1992, and
the collection of lease arrearages on three properties. Interest expense
attributable to net operating lease revenues decreased $289,000 due to lower
interest rates on a portion of the outstanding mortgage debt and less
mortgage debt outstanding during the period. Depreciation expense
attributable to operating leases decreased $26,000, primarily the result of
the lower basis for certain real estate properties due to the write-down to
fair value during 1992, and the sale of two properties, offset by an increase
in depreciation due to equipment operating leases generated in 1993.

The Company's principal objectives for its real estate business are to (1)
manage its properties aggressively, maintaining the integrity of the assets
through appropriate capital expenditures, (2) accelerate paydown of the debt
associated with those properties as available cash flow permits, (3) hold
most assets for long-term investment, (4) consider the selective sale of
individual properties or groups of properties, and (5) selectively invest in
additional real estate.

The Company's aggregate investment in real estate is not expected to
significantly appreciate in value over the next several years. In addition,
net operating lease revenues from some existing investments may decline in
the short to intermediate term, as rents under many existing leases are
expected to remain flat or decrease as leases expire over the next several
years. While this will tend to depress the Company's profitability in its
real estate operations for a period of time, it is expected that the
Company's real estate investments (after third party mortgage debt service
obligations and overhead expenses) will continue to provide positive cash
flow to the Company.

<PAGE> 24

The commercial real estate business is subject to several risks which
management reviews on a regular basis. These risks are identified below with
the status of each as of December 31, 1994:

1. Credit risks.

There are various levels of credit risks inherent in the Company's rent
receivables. A total of $2,000 of rents were thirty-one or more days past
due.

2. General market conditions nationally or within specific geographic
areas.

The Company is maintaining an ownership interest, ranging from 10% to
100%, in 43 real estate properties with an original cost of $63,325,000 in
the following states, with the percentage of concentration indicated in
parenthesis: Florida (27%), Pennsylvania (22%), New Jersey (14%), Michigan
(10%) and other (27%).

3. Greater difficulty in releasing or selling special purpose buildings.

The Company's special purpose buildings include three day-care facilities.
None are presently for sale and all are fully occupied. The Company also
owns and manages two limited-service hotels. The Company sold its interest
in a nursing home property in December, 1994.

4. Vacancies.

Total vacancy (excluding the hotels), based on the portfolio's total
square footage, approximated 5.3%. The vacancy percentage included partial
vacancies in eleven real estate projects, some of which may require
additional cash from the Company until the properties are substantially
leased. Management is actively pursuing new tenants for these properties.

5. Property repairs and improvements.

Preservation of the quality and value of commercial real estate properties
requires that repairs and improvements occur regularly. In a majority of
the Company's properties, the obligation to incur such expenditures has
been passed to the tenants. Provided the tenants have the financial
resources to comply, the Company is able to avoid or defer this
responsibility. In other cases, the responsibility is retained by the
Company, and repairs and improvements are funded out of current operating
lease cash flows or through cash reserves; and if necessary through
increased investments or additional borrowings.

The timing and amount of repairs or improvements is determined by the
operating history and present level of operating lease revenue levels of
the property, by the Company's plans for a property (such as a sale,
lease, or renovation), and in some cases by regulatory directives. In
1992, the Americans with Disabilities Act ("ADA") was passed, requiring
the improvement of many properties under certain conditions in order to
accommodate the needs of the physically disabled. In certain of the
Company's properties, meeting ADA requirements will necessitate
improvements at various times. The Company estimates that the cost of such
improvements will not be material relative to the aggregate cost of the
properties.

It is estimated that, not including potential ADA requirements, up to
approximately $629,000 of improvements may be made within the next twelve
months. Approximately 36% of the cost of these improvements will be funded
through operating cash generated by the partnerships, and the balance
through additional debt.

6. Mortgage loan rollover.

The extension or replacement of existing mortgage loans as they come due
continue to involve a high degree of risk in the current and reasonably
foreseeable future. Such loans, when available, are frequently at lower
loan amounts. In 1995, approximately $5,009,000 of third party mortgage
debt will come due and will require negotiation or replacement financing.
It is expected that a substantial portion of this debt will be
renegotiated for extended terms with existing lenders. To the extent any

<PAGE> 25

such debt is not extended in maturity, the Company expects to seek funding
from other lenders or provide funding internally, if necessary. As
interest rates have been increasing, however, any such extensions or new
loans may be at higher interest rates than in the recent past. This has
the potential to decrease the Company's operating margin, as several
factors can tend to reduce the ability to achieve higher revenues to
offset such increases. Such factors include the timing of rent adjustments
and market limitations.

7. Valuation of real estate properties.

A decline in the market value of the Company's investment in real estate
can provide risk to the Company in several ways. To the extent the
declines indicate a reduction in the rentals expected on a property, the
Company will experience a decline in operating lease revenues. Also, lower
values can reduce the amount of available loan borrowings or equity
capital available from third parties to the Company to fund its continued
ownership of the properties, and can reduce eventual sale proceeds if
properties are sold and values have not recovered.

In general, conditions affecting the value of individual properties can
change from period to period. Conditions include an extremely wide variety
of factors outside the control of the Company. In the case of many of the
Company's real estate operating leases, a change in conditions can also
include the early termination of a favorable lease caused by a tenant's
financial difficulties or the modification of such a lease arising out of
the negotiation of a new lease with a tenant. The Company is presently in
negotiations involving several of its properties, any of which may result
in lower operating lease revenues in future periods.

As of December 31, 1994, there were no properties believed to have an
estimated current fair value materially below book value. Future changes
to the property valuations may be necessary if any conditions differs
substantially from the assumptions used in developing current valuations.

OTHER OPERATING REVENUES

Other operating revenues increased $1,713,000 (66.5%) to $4,288,000 in
1994 from 1993. Customer service fees decreased $143,000 (11.7%) primarily
due to a continued reduction in insurance premiums earned as a result of the
discontinuance of the lease insurance program and fewer late charges earned
due to lower overall delinquency. Management income increased $39,000 (17.5%)
due to a fee received in connection with the sale of one real estate
property. Furniture and equipment sales, net of cost of goods sold, increased
$483,000 (69.6%) due to increased volume in the modular and systems furniture
business but the Company disposed of this line of business in March, 1995.
The Company's share of income in unconsolidated real estate partnerships
increased $812,000 primarily due to a pre-tax gain of approximately $813,000
from the sale of one real estate property in June, 1994, and an increase in
revenues generated by certain partnerships. Gain on sale of equity securities
decreased $381,000 (92.7%) due to less sales activity in 1994. Other income
increased $415,000 (74.6%) primarily due to a gain on the sale of a
partnership interest and the recovery of finance receivables which were
charged off prior to the Company's acquisition of those charged off finance
receivables.

Other operating revenues increased $4,283,000 to $2,575,000 in 1993 from a
loss of $1,708,000 in 1992. The loss in 1992 resulted from the write-down of
the Company's real estate portfolio by $4,302,000 in June 1992. A $488,000
provision for write-down of real estate was recorded in 1993 (see "Business
- -- Real Estate -- Write-down"). Customer service fees decreased $260,000
primarily due to a reduction in insurance premiums earned as a result of the
discontinuance of the lease insurance program in mid-1992 and fewer late
charges earned. Management income decreased $88,000 primarily due to
nonrecurring fees earned in 1992 from the negotiation of the sale of certain
equipment. Furniture and equipment sales increased $296,000 due to the entry
into the modular furniture business and the achievement of higher volume. The
Company's share of losses in unconsolidated real estate partnerships
decreased $190,000. Gain on sale of debt and equity securities increased
$405,000. Other income decreased $74,000.

<PAGE> 26

OPERATING EXPENSES

Operating expenses increased $1,029,000 (11.7%) to $9,860,000 in 1994.
Salaries, related taxes, and employee benefits increased $695,000 (15.2%) due
to an increase in incentive compensation, the addition of several marketing
personnel, and the addition of employees through the acquisition of American
Capital Leasing Corporation. Depreciation and amortization decreased $111,000
(19.8%) primarily due to a continued reduction in lease insurance expense due
to the discontinuance of this program in 1992. All remaining expenses
increased $445,000 (12.0%) due to an increase in the maintenance and repair
of various real estate properties, an increase in rent expense and the
addition of operating expenses incurred by American Capital Leasing
Corporation.

Operating expenses decreased $152,000 (1.7%) to $8,831,000 in 1993.
Salaries, related taxes, and employee benefits decreased $80,000 (1.7%) due
to a reduction in number of employees, offset by an increase in incentive
compensation. Depreciation and amortization decreased $36,000 (6.0%)
primarily due to a reduction in lease insurance expense due to the
discontinuance of this program in July 1992, offset by the write-off of
deferred costs associated with a mortgage which was subsequently refinanced.
All remaining expenses decreased $36,000 (1.0%) due to an across the board
reduction in expenses offset by fees paid to third party management companies
to assist in managing the day-to-day operations of most of the real estate
properties owned by the Company (this increase, however, is offset by a
reduction in salary expense for the Company's real estate investment
subsidiary) and consultant expenses incurred due to the acquisition of the
capital stock of Canyon Capital, Inc. in June 1993 (see "Business --
Commercial Equipment Leasing and Commercial Financing -- Acquisitions"). The
Company continues to control operating expenses based on the above analysis;
however, further expense reductions are necessary to improve profitability.

PROVISION FOR INCOME TAXES

Income taxes for 1994 were $2,502,000; for 1993 were $1,900,000; and for
1992 were $144,000 (including $241,000 of state income taxes for the
Company's profitable subsidiaries). The effective income tax rates for 1994,
1993 and 1992 were 39.4%, 37.4% and 28.8%, respectively (see note L to the
consolidated financial statements). The effective tax rate is higher than the
statutory federal income tax rate due principally to the provision for state
income taxes, net of federal tax benefit.

Income taxes for 1994 and 1993 increased $602,000 and $1,756,000,
respectively due to higher pre-tax income. Income taxes for 1992 decreased
$744,000 due to a pre-tax loss, principally the result of the net provision
for real estate write-down which provided a $1,310,000 income tax benefit.

Effective January 1, 1993, the Company adopted SFAS No. 109. This change
in the method of accounting for income taxes had no cumulative effect on the
1993 consolidated statement of operations (see note A to the consolidated
financial statements).

NET INVESTMENT IN FINANCE RECEIVABLES AND PROPERTY UNDER OPERATING LEASES

Net direct finance lease receivables and commercial finance receivables
totaled $148,073,000 as of December 31, 1994 compared to $122,144,000 as of
December 31, 1993, a net increase of $25,929,000 for the year. Property under
operating leases, net of accumulated depreciation, increased $3,391,000,
resulting primarily from the acquisition of two properties.

The increase in finance receivables was in accordance with the Company's
growth plans. The Company's sales efforts have generated a larger volume of
new leases and loans in 1994 due to increased penetration into focus markets,
while maintaining the Company's policy of tight credit standards. In
addition, the Company's lease and loan portfolio expanded through the
acquisition of American Capital Leasing Corporation on June 1 (see "Business
- -- Commercial Equipment Leasing and Commercial Financing -- Acquisitions").
Future originations will be dependent to a large extent upon economic
conditions and the Company's ability to sell services in a competitive market
environment. The Company continues to look for opportunities to acquire
portfolios of leases and loans which will compliment the Company's existing
finance receivables.

<PAGE> 27

The change in property under operating leases is in accordance with
management strategy. The Company's activities in buying and selling
properties varies in concert with the markets. Additional purchases of real
estate assets are considered as certain market conditions appear attractive.
Sales are considered at various times depending on such factors as pricing,
capital needs, and tenant interests.

LIQUIDITY

Liquidity represents the Company's ability to meet ongoing financial
obligations. The Company's ongoing liquidity is dependent upon continued
profitability and collection of its receivables and rentals, the ability to
sell equipment or collect purchase option payments at the conclusion of
maturing equipment leases, the sale of Subordinated Investment Certificates,
the ability to secure new senior debt (loans from banks and other financial
institutions), the ability to secure real estate mortgage financing, to sell
real estate, and to sell equity interests in real estate partnerships, and
the ability to obtain other financing.

Net cash provided by continuing operating activities was $6,769,000 for
1994, $7,175,000 for 1993 and $7,411,000 for 1992.

The Company's direct finance lease receivables and equipment operating
leases are funded primarily with unsecured senior debt. The Company generally
attempts to match new leases with borrowings of like maturity and amount in
which the interest rate is fixed at the time of the borrowing. Additionally,
the Company borrows term debt with varying maturities and short-term floating
interest rate debt, and uses Subordinated Investment Certificate debt. The
Company's commercial finance receivables are similarly match funded by
various forms of unsecured senior debt and Subordinated Investment
Certificate debt. The Company has unused lines of credit totalling
$56,382,000 as of December 31, 1994. (See "Capital Resources").

The Company's investment in real estate (property under operating leases)
is leveraged substantially with borrowings by the Company. Much of the debt
is comprised of mortgage loans securing individual properties. Of the
mortgage debt, a substantial amount is nonrecourse to the Company, with the
balance being recourse through guarantees by Horrigan American, Inc. or its
real estate subsidiary. Of the investment in real estate not funded with
mortgage debt, a substantial amount is funded indirectly by the Company with
Subordinated Investment Certificate debt.

In the opinion of management, the Company's liquidity position is
sufficient under present circumstances.

<PAGE> 28

CAPITAL RESOURCES

Future growth of the Company will depend in significant measure on its
ability to obtain additional lines of credit and other financing, the
continued sale of Subordinated Investment Certificates, the sale of equity
interests in real estate partnerships and continued profitability. As of
December 31, 1994, the Company had the following debt structure:

<TABLE>
<CAPTION>
(In thousands)
- ---------------------------------------------------------------
Debt Outstanding and
Availability/Lines of Credit
-----------------------------------
Total In
Availability Use Unused
- ---------------------------------------------------------------
<S> <C> <C> <C>
Short-Term Borrowings:
Investment Certificate .. $ -- $ 3,143 $ --
Fixed Rate .............. 37,707 20,000 17,707
Floating Rate ........... 5,000 250 4,750
------------ ---------- --------
Sub-Total ........... 42,707 23,393 22,457
------------ ---------- --------
Long-Term Debt:
Recourse
Investment Certificate .. -- 25,864 --
Junior Subordinated Debt -- 103 --
Unsecured Funding Program 86,890 52,965 33,925
Fixed Rate .............. 24,543 24,543 --
Term Loan ............... -- 2,000 --
Real Estate Mortgages ... -- 5,005 --
Other long-term debt .... -- 156 --
Nonrecourse ..............
Real Estate Mortgages ... -- 20,577 --
------------ ---------- --------
Sub-Total ........... 111,433 131,213 33,925
------------ ---------- --------
TOTAL DEBT ............... $154,606
==========
TOTAL AVAILABILITY ....... $154,140 $56,382
============ ========
</TABLE>

Total stockholders' equity increased by $1,789,000 from December 31, 1993
to December 31, 1994 primarily due to the net earnings of $3,688,000 for
1994, offset by the payment of dividends ($1,190,000) and the decrease in the
net unrealized holding gains for available-for-sale securities ($622,000).

Refer to Notes H and I to the consolidated financial statements for
disclosure of the outstanding short-term and long-term debt, including lines
of credit information. In the opinion of management, the Company's capital
resources are sufficient under present circumstances to satisfy its capital
requirements based upon present asset growth projections, current leverage,
continued profitability and historic ability to secure new sources of
borrowings.

INFLATION

The Company's financial statements, and the related financial data
presented herein have been prepared in accordance with generally accepted
accounting principles, which generally require the measurement of financial
position and operating results in terms of historical dollars without
considering changes in the relative purchasing power of money over time due
to inflation. The primary impact of inflation on the operation of the Company
is reflected in increased operating costs. Unlike most industrial companies,
virtually all of the assets and liabilities of a financial institution are
monetary in nature. As a result, interest rates have a more significant
impact on the Company's performance than the effects of general levels of
inflation.

<PAGE> 29

INTEREST RATES

Interest rates do not necessarily move in the same direction or in the
same magnitude as the price of goods and services. Management believes that
continuation of its efforts to manage the rates, liquidity and interest
sensitivity of the Company's assets and liabilities is necessary to generate
an acceptable return on assets and return on equity.

Interest rate sensitivity management seeks to avoid fluctuating net
interest margins and to enhance consistent growth of net interest margins
through periods of changing interest rates.

Interest rate risks arise when interest-earning assets mature or when
their rates of interest change in time frames that are different from those
of interest-bearing liabilities. The matching of assets and liabilities may
be analyzed by examining the extent to which they are "interest rate
sensitive" and by monitoring an institution's interest rate sensitivity
"gap." An asset or liability is said to be interest rate sensitive within a
specific time period if it will mature or reprice within that time period.
The interest rate sensitivity gap is defined as the difference between the
amount of interest-earning assets maturing or repricing within a specific
time period and the amount of interest-bearing liabilities maturing or
repricing within that same time period. A gap is considered positive when the
amount of interest rate sensitive assets exceeds the amount of interest rate
sensitive liabilities. A gap is considered negative when the amount of
interest rate sensitive liabilities exceeds the amount of interest rate
sensitive assets. During a period of rising interest rates, a negative gap
would tend to adversely affect net interest income while a positive gap would
tend to result in an increase in net interest income. During a period of
falling interest rates, a negative gap would tend to result in an increase in
net interest income while a positive gap would tend to adversely affect net
interest income.

The rate of growth in interest free sources of funds (e.g., stockholders'
equity) will influence the level of interest sensitive funding sources. In
addition, the absolute level of interest rates will affect the volume of
earning assets and funding sources. As a result of these limitations, the
interest sensitivity gap is only one factor to be considered in estimating
the net finance revenue margin. The Company monitors and adjusts the gap
position, taking into consideration current interest rate projections, and
maintaining flexibility if rates move contrary to expectations.

As of December 31, 1994, the Company had a three-month negative cumulative
gap of 3.8%, a six-month negative cumulative gap of 3.3% and a twelve-month
negative cumulative gap of 2.8% on total earning assets of $185,551,000. The
cumulative gaps for years two through ten ranged from 9.7% positive to 4.7%
positive. These percentages are reflective of scheduled principal payments
only and have not been adjusted for anticipated early pay-offs. The
relatively short duration of many of the Company's earning assets indicates
that the interest rate sensitivity gap will probably remain within its
present, rather narrow, margin under current market interest rate conditions.
Management believes the Company's cumulative gap ranges are satisfactory for
achieving acceptable net interest margins.

The Company has interest rate swap agreements outstanding where the
Company pays fixed interest rates and receives variable interest rates. The
following table contains information concerning these agreements as of
December 31, 1994:

<TABLE>
<CAPTION>
1994
----
<S> <C>
Number of agreements ........................ 4
Notional principal amount ................... $7,587,701
Weighted average maturity ................... 2.4 years
Weighted average fixed rate payable ......... 5.79%
Weighted average variable rate receivable ... 6.19%
Original notional principal amount .......... $8,500,000
Range of maturities ......................... 1.17 to 3.33 years
Range of fixed rates payable ................ 4.25% to 6.95%
Range of variable rates receivable .......... 6.06% to 6.38%
</TABLE>

<PAGE> 30

Interest expense is adjusted for the net amount receivable or payable
under the interest rate swap agreements. The following table contains
information concerning these agreements for the year ended December 31, 1994:

<TABLE>
<CAPTION>
1994
----
<S> <C>
Weighted average fixed rate payable ..... 5.79%
Weighted average variable rate receivable 4.90%
Interest paid ........................... $38,530
Interest received ....................... $ 7,822
Net interest expense recorded ........... $30,708

</TABLE>

DESCRIPTION OF SUBORDINATED INVESTMENT CERTIFICATES

GENERAL

This section summarizes the principal provisions of the various documents
referred to herein. For a complete description of their terms, reference is
made to the documents themselves, copies of which have been filed with the
Securities and Exchange Commission as exhibits to the registration statement
of which this prospectus is a part.

The Company (which, in this section, refers only to Horrigan American,
Inc.) is offering five series of Subordinated Investment Certificates
(collectively, the "Certificates"). The Certificates are issued under an
Indenture dated July 21, 1977, between the Company and PNC Bank, N.A.,
Scranton, Pennsylvania, as trustee (the "Trustee"), as amended by various
supplemental indentures (such Indenture, as so amended, being herein referred
to as the "Indenture").

The Indenture does not limit the amount of Certificates which may be
issued, and it provides for the Company and the Trustee to enter into one or
more further supplemental indentures providing for the issuance of additional
series of subordinated investment certificates with the same or different
interest rates, maturities, and other terms and conditions. The Indenture
does not limit the amount of certificates which may be issued under any such
supplemental indenture.

Subordination

The indebtedness evidenced by the Certificates and any accrued interest
thereon are part of the Company's subordinated debt. In the event of the
Company's bankruptcy or other liquidation, holders of the Certificates will
be entitled to be paid principal of and interest on the Certificates only
after the payment in full of the Company's indebtedness (including
indebtedness of others guaranteed by the Company) for borrowed money or on
account of capitalized lease obligations or the deferred purchase price of
property or reimbursement obligations under letters of credit, whether
incurred before or after the issuance of the Certificates ("Senior Debt").
The Company has agreed that upon maturity of or default on any of its Senior
Debt the Company will not make any payment of principal of or interest on the
Certificates until the matured Senior Debt has been paid or any default in
respect thereof has been cured or waived. The Indenture does not limit the
amount of Senior Debt which the Company may incur. A default under any of the
Certificates would be a default under the terms of substantially all the
Company's Senior Debt. (For further information regarding the relative
position of the Certificate holders with respect to other creditors see
"Capitalization.")

Redemption by the Company

The Company, at its option and upon not less than thirty days' written
notice to the registered holders by certified or registered mail, may redeem
any or all of the Certificates at any time prior to maturity at 100% of the
principal amount together with interest accrued to the date fixed for
redemption, after which interest will cease to accrue. The Company may in its
discretion redeem Certificates of one series without redeeming Certificates

<PAGE> 31

of any other series and may redeem Certificates bearing one rate of interest
without redeeming Certificates of the same series bearing a different rate of
interest. In case of redemption by the Company of less than all of the
Certificates bearing the same rate of interest, the Company will select the
Certificates to be redeemed by lot, or by another method which the Company deems
fair and appropriate.

Place and Method of Payment

Principal of and interest on the Certificates will be payable at the
principal office of the Company in Reading, Pennsylvania, and at such other
locations as the Company may designate from time to time. At the option of
the Company, however, payment may be made by check or draft mailed to the
person or persons entitled thereto at the address appearing in the register
which the Company will maintain for this purpose. The Company is not
obligated to pay the principal of a redeemed or matured Certificate until it
is surrendered to the Company duly endorsed by the registered holder.

Form

All Certificates will be issued in fully registered form as to both
principal and interest. The Company will be entitled to treat the registered
holder shown on its records as the owner of the Certificate for all purposes.
Ownership of a Certificate may be registered in the name of any two or more
named persons as joint tenants with right of survivorship, as tenants in
common or as tenants by the entireties, and payment of principal of and
interest on any Certificate so registered will be made to the person or
persons entitled to receive such payment as their interests may appear.

THE PASSBOOK SERIES CERTIFICATES

Maturity and Redemption by the Holder

The Passbook Series Certificates have no stated maturity and will remain
outstanding until redeemed by the Company or by the holder. A Passbook Series
Certificate may be redeemed by the holder at any time on demand, but it is
not transferable to a third party. Redemptions will be recorded in the
holder's passbook where the corresponding purchases of the Certificates to be
redeemed have been recorded. Each Passbook Series Certificate purchased
remains a separate security and may be redeemed only in its entirety in the
denomination in which it was first issued and not in any fraction thereof.
Any number or combination of Passbook Series Certificates may be redeemed at
one time.

Interest

The Company will establish an interest rate for all outstanding Passbook
Series Certificates on the first day of each month, and interest will accrue
at that rate during that month. No interest will be paid on a Passbook Series
Certificate which is redeemed by the holder before the eighth day after the
date of its issuance. Otherwise, interest will accrue from the date of
issuance until payment or redemption at the rates in effect from time to
time.

Interest is not compounded and is not exempt from federal, state or local
taxes. Interest is payable semiannually (each June 1 and December 1) to the
holder, but upon the written request of a holder of Passbook Series
Certificates in the aggregate principal amount of $10,000 or more, interest
will be paid either quarterly or monthly.

Form and Denominations

Each Passbook Series Certificate will be evidenced by an entry in a
passbook issued to the holder at the time of his initial purchase. Subsequent
purchases by the holder will be recorded on this same passbook. The Passbook
Series Certificates may be purchased in denominations that are multiples of
$100 between $500 and $50,000, inclusive. A single purchase of less than $500
is not permitted. An investment in excess of $50,000 must be made by
purchasing a combination of individual certificates of the above-listed
denominations, and will be recorded as a series of separate purchases on the
holder's passbook. An aggregate investment of more than $500,000 by a single
holder will not be permitted, including investment in various passbook series
Certificates formerly issued by the Company.

<PAGE> 32

THE FIXED RATE CERTIFICATES

The 1995 Series 8, A, B and C Subordinated Investment Certificates are
referred to in this section as the "Fixed Rate Certificates."

Maturity and Early Redemption by the Holder

Each 1995 Series 8 Certificate matures eight years after the date of its
original issuance. Each 1995 Series A Certificate matures four years after
the date of its original issuance. Each 1995 Series B Certificate matures 30
months after the date of its original issuance. Each 1995 Series C
Certificate matures 12 months after the date of its original issuance.

Any of the Fixed Rate Certificates may be redeemed by the holder at any
time after 30 days following the date of its original issuance upon the death
of any of the registered holders for a period of one year from the date of
death. The Company may require up to 30 days' notice of any such redemption
and may require satisfactory proof of death and of other matters affecting
the right of the person requesting payment.

Interest

Interest on the Fixed Rate Certificates accrues from the date of issuance
until payment or redemption at a fixed rate stated on the face of the
Certificate, which will depend upon the date of issuance. The Company will
establish a rate on the first day of each month for Fixed Rate Certificates
issued during that month.

Interest is payable semi-annually each June 1 and December 1 to the
registered holder, but at the option of the holder of a Certificate in the
principal amount of $10,000 or more, interest will be paid either quarterly
or monthly. Interest payments will be made to the persons who were the
registered holders of the Certificates at the close of business on the 20th
day (whether or not a business day) of the calendar month next preceding an
interest payment date.

Automatic Roll-Over

When a Fixed Rate Certificate matures, unless the holder or the Company
otherwise elects, it will automatically "roll over" into a fixed rate
subordinated investment certificate of the series then being offered with the
same term as the maturing Certificate. The new certificate will bear interest
at the then current interest rate for newly issued certificates of that
series. It is expected that the terms of future series of subordinated
investment certificates will include similar roll-over provisions.

The Company will send the holder notice of the automatic roll-over and a
copy of the then current prospectus for the series of certificates being
offered at least 15 days before maturity. The Company will also send the
holder notice of the interest rate for the series of new certificates being
offered on approximately the first day of the month in which the holder's
Certificate matures. The holder may elect not to roll over his Certificate by
presenting it for payment at maturity or within ten days thereafter, in which
case interest will be paid only to the maturity date. If a maturing
Certificate is not presented within that time, it will not thereafter be
redeemable by the holder before the new maturity date except in accordance
with the provisions of the new certificate. Promptly after a Fixed Rate
Certificate has rolled over, the Company will prepare and deliver to the
holder a confirmation showing the new maturity date and interest rate. The
Company's obligation under the newly issued certificate will be represented
by the Certificate originally issued and by the current confirmation.

The Company may elect not to roll over a maturing Fixed Rate Certificate
by sending notice to that effect to the holder at least 15 days before the
maturity date.

Denominations

The 1995 Series 8 and Series A Certificates may be purchased in $1,000
minimum denominations, and the 1995 Series B and C Certificates may be
purchased in $500 minimum denominations. Fixed Rate Certificates will be
issued only in multiples of $100.

<PAGE> 33

OTHER PROVISIONS OF THE INDENTURE

Modification of the Indenture

The Indenture may be modified by the Company and the Trustee at any time
or times with the consent of the holders of a majority in principal amount of
the Certificates then outstanding thereunder, but if a proposed modification
would affect the rights of less than all holders of such Certificates, only
the consent of a majority by aggregate principal amount of holders whose
rights would be affected need be obtained. In no event may any modification
be made which will affect the terms of payment of the principal of, or any
interest on, any Certificate outstanding under the Indenture, or reduce the
percentage of Certificate holders whose consent to modification is required,
without the consent of the holders of every Certificate affected thereby.
However, the Indenture provides that, without notice to or action by
Certificate holders, (1) the interest rate (including the method of
determining the interest rate), minimum interest rate, if any, maturity,
provisions relating to redemption by the holder, and the authorized
denominations of unissued Certificates available to be issued under the
Indenture may be modified prospectively from time to time by notice from the
Company to the Trustee, and (2) the Company and the Trustee may enter into
supplemental indentures providing for the issuance of additional series of
Certificates at the same or different rates of interest and upon the same or
different terms and conditions. No such modification or supplemental
indenture will affect previously issued Certificates. The Company and the
Trustee may also enter into supplemental indentures adding covenants or
agreements of the Company for the protection of the Certificate holders, or
clarifying any ambiguity or correcting any defect in the Indenture,
consistent with its terms, without notice to or action by the Certificate
holders.

Default and Remedies

The following constitute events of default under the Indenture and the
Certificates: (a) default for a period of thirty days in the payment of
interest on any Certificate; (b) default in the payment of principal of any
Certificate at its maturity; (c) breach of other covenants made by the
Company in the Indenture and continuation thereof for a period of 30 days
after notice thereof has been given in the manner provided in the Indenture;
(d) the institution by the Company of bankruptcy, reorganization, arrangement
or insolvency proceedings, or other proceedings for relief under any
bankruptcy or similar law or laws for the relief of debtors, or the
institution against the Company of such proceedings which are consented to or
are not dismissed within 60 days after such institution.

The Indenture provides that the holders of a majority in aggregate
principal amount of the Certificates at the time outstanding thereunder may,
on behalf of all holders, waive any past default or event of default except
in payment of principal of or interest on the Certificates.

Subject to the provisions of the Indenture relating to the duties of the
Trustee, in case an event of default shall occur and be continuing, the
Trustee shall be under no obligation to exercise any of its rights or powers
under the Indenture at the request, order or direction of any of the
Certificate holders, unless such Certificate holders shall have offered to
the Trustee reasonable indemnity. Subject to such provisions for the
indemnification of the Trustee, the holders of a majority in principal amount
of the Certificates at the time outstanding under the Indenture shall have
the right to direct the time, method and place of conducting any proceeding
for any remedy available to the Trustee, or exercising any power conferred on
the Trustee. The Indenture contains limitations on the right of any
individual Certificate holder to institute legal proceedings in the event of
default by the Company.

Satisfaction and Discharge of Indenture

The Indenture may be discharged upon the payment of all Certificates
outstanding thereunder or upon deposit in trust of funds sufficient therefor,
as provided in the Indenture.

The Trustee

The Trustee under the Indenture is PNC Bank, National Association ("PNC"),
Scranton, Pennsylvania. The Indenture permits the Trustee to hold Senior Debt
and to be entitled to the rights of a holder of Senior Debt. The Company has
credit facilities with PNC in the amount of $21,250,000 at January 31, 1995.
Amounts outstanding under this facility constitute Senior Debt.

<PAGE> 34

LEGAL OPINION

The legality of the Certificates offered hereby has been passed upon for
the Company by Drinker Biddle & Reath, Philadelphia National Bank Building,
1345 Chestnut Street, Philadelphia, Pennsylvania 19107.

EXPERTS

The consolidated financial statements of Horrigan American, Inc. and
subsidiaries, as of December 31, 1994 and 1993, and for each of the years in
the three-year period ended December 31, 1994 have been included herein in
reliance upon the report of KPMG Peat Marwick LLP, independent certified
public accountants, appearing elsewhere herein, and upon the authority of
said firm as experts in accounting and auditing.

ADDITIONAL INFORMATION

This prospectus does not contain all of the information set forth in the
registration statement relating to this offering which has been filed with
the Securities and Exchange Commission, Washington, D.C. For further
information with respect to the Company or the Certificates offered hereby,
reference is made to the registration statement, including the exhibits
thereto.

<PAGE> 35

INDEPENDENT AUDITORS' REPORT

THE BOARD OF DIRECTORS
HORRIGAN AMERICAN, INC.

We have audited the accompanying consolidated balance sheets of Horrigan
American, Inc. and subsidiaries as of December 31, 1994 and 1993, and the
related consolidated statements of operations, changes in stockholders'
equity, and cash flows for each of the years in the three-year period ended
December 31, 1994. These consolidated financial statements are the
responsibility of the Company's management. Our responsibility is to express
an opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of Horrigan
American, Inc. and subsidiaries as of December 31, 1994 and 1993 and the
results of their operations and their cash flows for each of the years in the
three-year period ended December 31, 1994, in conformity with generally
accepted accounting principles.

KPMG PEAT MARWICK LLP

January 31, 1995
Philadelphia, Pennsylvania

<PAGE> 36

HORRIGAN AMERICAN, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
ASSETS

<TABLE>
<CAPTION>
December 31,
1994 1993
---- ----
(In thousands)
----------------------
<S> <C> <C>
Cash .................................................................... $ 1,947 $ 2,160
Debt and equity securities .............................................. 2,335 2,697
Net investment in finance receivables ................................... 148,073 122,144
Equity investments in real estate partnerships .......................... 121 (8)
Property under operating leases, net .................................... 35,022 31,631
Property and equipment, net ............................................. 2,560 2,301
Other assets ............................................................ 4,272 4,028
-------- --------
$194,330 $164,953
======== ========

LIABILITIES AND STOCKHOLDERS' EQUITY
Short-term borrowings ................................................... $ 23,393 $ 16,305
Accounts payable and accrued expenses ................................... 6,468 4,244
Customer deposits ....................................................... 2,316 2,188
Long-term debt:
Recourse ............................................................... 110,636 94,880
Nonrecourse ............................................................ 20,577 18,435
-------- --------
Total Liabilities .................................................... 163,390 136,052
-------- --------
Minority interest .................................................... 494 244
-------- --------
Stockholders' equity:
Preferred stock, $100 par value: 8% noncumulative, nonvoting: authorized
20,000 shares; issued and outstanding 0 shares in 1994 and 1,952
shares in 1993 ....................................................... -- 195
Common stock, $1 par value: authorized 10,000,000 shares; issued
3,128,262 shares in 1994 and 3,111,766 shares in 1993; outstanding
3,126,762 shares in 1994 and 3,111,766 shares in 1993 ................ 3,128 3,112
Capital in excess of par value ......................................... 106 --
Net unrealized holding gains for available-for-sale securities, net of
tax .................................................................. 752 1,374
Retained earnings ...................................................... 26,474 23,976
Less treasury stock, at cost; 1,500 shares in 1994 and 0 shares in 1993 (14) --
-------- --------
Total Stockholders' Equity ........................................... 30,446 28,657
-------- --------
$194,330 $164,953
======== ========
</TABLE>

See accompanying notes to consolidated financial statements.

<PAGE> 37

HORRIGAN AMERICAN, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
Year Ended December 31,
(In thousands, except per share amounts) 1994 1993 1992
--------- --------- ----------
<S> <C> <C> <C>
Finance revenues:
Commercial leasing and financing revenue .............. $18,625 $17,401 $18,869
Interest expense ...................................... 6,983 6,511 8,444
------- ------- --------
Finance revenue margin ............................... 11,642 10,890 10,425
Provision for possible lease and loan losses .......... 1,377 1,573 2,190
------- ------- --------
Finance revenues after provision for possible lease
and loan losses ................................... 10,265 9,317 8,235
------- ------- --------
Operating lease revenues:
Rents on real estate operating leases ................. 5,500 5,556 5,850
Rents on equipment operating leases ................... 212 125 85
------- ------- --------
Total operating lease revenues ....................... 5,712 5,681 5,935
Interest expense ...................................... 2,838 2,517 2,806
Depreciation .......................................... 1,222 1,147 1,173
------- ------- --------
Net operating lease revenues ......................... 1,652 2,017 1,956
------- ------- --------
Other operating revenues (losses):
Customer service fees ................................. 1,075 1,218 1,478
Management and broker income .......................... 262 223 311
Furniture and equipment sales, net of cost of goods
sold ................................................ 1,177 694 345
Equity gain (loss) in real estate partnerships ........ 773 (39) (229)
Provision for write-down of real estate ............... -- (488) (4,302)
Gain on sale of debt and equity securities ............ 30 411 6
Other income .......................................... 971 556 683
------- ------- --------
Total other operating revenues (losses) .............. 4,288 2,575 (1,708)
------- ------- --------
Operating expenses:
Salaries and employee benefits ........................ 5,261 4,566 4,646
Depreciation and amortization ......................... 449 560 596
Other taxes ........................................... 653 633 738
Credit and collection ................................. 249 324 328
Other expenses ........................................ 3,248 2,748 2,675
------- ------- --------
Total operating expenses ............................. 9,860 8,831 8,983
------- ------- --------
Earnings (loss) before income taxes and minority
interest .............................................. 6,345 5,078 (500)
Income tax provision .................................. 2,502 1,900 144
------- ------- --------
Earnings (loss) before minority interest ............... 3,843 3,178 (644)
Minority interest (income)/loss ....................... (155) (131) 231
------- ------- --------
Net earnings (loss) .................................... $ 3,688 $ 3,047 $ (413)
======= ======= ========
Net earnings (loss) per common share ................... $ 1.18 $ 0.92 $ (0.13)
======= ======= ========
</TABLE>

See accompanying notes to consolidated financial statements.

<PAGE> 38

HORRIGAN AMERICAN, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

<TABLE>
<CAPTION>
Net unrealized
Capital holding gains
in excess for available-
Preferred Common of par for-sale Retained Treasury
(In thousands) stock stock value securities earnings stock
- -------------------------------- ----------- -------- ----------- -------------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Balance as of January 1, 1992 .. $ 195 $3,581 $ 1,136 $ -- $23,333 $(1,368)
Net loss ...................... -- -- -- -- (413) --
Cash dividends declared
($.080 per common share) .... -- -- -- -- (265) --
($8.00 per preferred share) . -- -- -- -- (16) --
Purchase of treasury stock at
cost -- 39,278 shares ....... -- -- -- -- -- (269)
Issuance of 16,045 shares in
connection with incentive
stock options ............... -- 16 76 -- -- --
Issuance of 476 shares ........ -- 1 3 -- -- --
------ ------ ------- ------ ------- -------
Balance as of December 31, 1992 195 3,598 1,215 -- 22,639 (1,637)
Net earnings .................. -- -- -- -- 3,047 --
Cash dividends declared
($.14 per common share) ..... -- -- -- -- (459) --
($8.00 per preferred share) . -- -- -- -- (16) --
Purchase of treasury stock at
cost -- 200,566 shares ...... -- -- -- -- -- (1,373)
Issuance of 11,300 shares in
connection with non-qualified
stock options ............... -- 11 58 -- -- --
Issuance of 734 shares ........ -- 1 4 -- -- --
Retirement of treasury stock --
497,934 shares .............. -- (498) (1,277) -- (1,235) 3,010
Change in carrying value, net
of tax ...................... -- -- -- 1,374 -- --
------ ------ ------- ------ ------- -------
Balance as of December 31, 1993 195 3,112 -- 1,374 23,976 --
------ ------ ------- ------ ------- -------
Net earnings .................. -- -- -- -- 3,688 --
Cash dividends declared
($.38 per common share) ..... -- -- -- -- (1,182) --
($4.00 per preferred share) . -- -- -- -- (8) --
Purchase of treasury stock at
cost -- 1,500 shares ........ -- -- -- -- -- (14)
Issuance of 15,825 shares in
connection with non-
qualified stock options ..... -- 15 102 -- -- --
Issuance of 671 shares ........ -- 1 4 -- -- --
Purchase and retirement of
preferred shares ............ (195) -- -- -- -- --
Change in carrying value, net
of tax ...................... -- -- -- (622) -- --
------ ------ ------- ------ ------- -------
Balance as of December 31, 1994 $ -- $3,128 $ 106 $ 752 $26,474 $ (14)
====== ====== ======= ====== ======= =======
</TABLE>

See accompanying notes to consolidated financial statements.

<PAGE> 39

HORRIGAN AMERICAN, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
Year Ended December 31,
(In thousands) 1994 1993 1992
----------- ---------- ----------
<S> <C> <C> <C>
Cash flows from operating activities:
Finance revenues received ................................ $ 16,618 $ 15,498 $ 16,790
Rentals and other cash received .......................... 10,150 9,534 9,115
Lease purchase options received .......................... 2,753 2,695 3,306
Dividends received ....................................... 27 26 36
Interest paid ............................................ (9,711) (9,069) (11,395)
Cash paid to suppliers and employees ..................... (11,083) (9,027) (8,770)
Income taxes paid ........................................ (1,985) (2,482) (1,671)
--------- -------- --------
Net cash provided by operating activities (note P) ...... 6,769 7,175 7,411
--------- -------- --------
Cash flows from investing activities:
Originations and purchases of finance receivables ........ (99,748) (74,552) (57,064)
Principal collections of finance receivables ............. 85,501 75,629 74,769
Acquisition of assets of Reli Financial Corp. ............ -- -- (21,404)
Acquisition of capital stock of Canyon Capital, Inc.
(net of cash received) ................................. -- (4,138) --
Acquisition of capital stock of American Capital Leasing
Corporation (net of cash received) (note R) ............ (3,986) -- --
Acquisition of debt and equity securities ................ (725) (166) (106)
Proceeds from sale of debt and equity securities ......... 175 673 211
Acquisition of property under operating leases ........... (6,914) (328) (369)
Proceeds from sale of property under operating leases .... 608 1,476 540
Acquisition of property and equipment .................... (442) (182) (282)
Proceeds from sale of property and equipment ............. 2 5 1
Acquisition of equity, partnership and long-term
investments ............................................ (132) (164) (491)
Proceeds from sale of equity, partnership and long-term
investments ............................................ 1,372 152 127
Insurance premium paid increasing cash value ............. (21) (30) (64)
--------- -------- --------
Net cash used by investing activities ................... (24,310) (1,625) (4,132)
--------- -------- --------
Cash flows from financing activities:
Issuance of common stock ................................. 122 74 96
Minority capital received ................................ 256 -- 37
Dividends paid and partnership distributions ............. (1,351) (629) (522)
Acquisition of preferred stock and treasury stock ........ (209) (1,373) (269)
Short-term debt borrowings ............................... 195,850 87,250 59,640
Short-term debt repayment ................................ (196,100) (84,986) (59,890)
Long-term debt borrowings ................................ 73,582 54,236 51,581
Long-term debt repayment ................................. (54,558) (59,663) (58,041)
Certificate borrowings ................................... 5,588 6,307 9,000
Certificate repayment .................................... (5,350) (6,566) (6,364)
Net change in customer deposits .......................... (502) (242) (342)
--------- -------- --------
Net cash provided by (used by) financing activities ..... 17,328 (5,592) (5,074)
--------- -------- --------
Net decrease in cash ...................................... (213) (42) (1,795)
Cash at beginning of year ................................ 2,160 2,202 3,997
--------- -------- --------
Cash at end of year ...................................... $ 1,947 $ 2,160 $ 2,202
========= ======== ========
</TABLE>

See accompanying notes to consolidated financial statements.

<PAGE> 40

HORRIGAN AMERICAN, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE A -- SUMMARY OF ACCOUNTING POLICIES
A summary of the significant accounting policies applied in the preparation
of the accompanying consolidated financial statements follows.

Principles of Consolidation

The consolidated financial statements include the accounts of Horrigan
American, Inc., nine wholly-owned subsidiaries (American Equipment Leasing
Co., Inc., AEL Leasing Co., Inc., American Commercial Credit Corp., American
Capital Leasing Corporation, AEL Holdings, Inc., Horrigan American
Securities, Inc., American Real Estate Investment and Development Co.,
American Hotel Management, Inc. and The Business Outlet, Inc.), and
thirty-one real estate partnership investments, wherein the Company is
maintaining a controlling interest, ranging from 10% to 100% (the Company).

All significant intercompany balances and transactions have been
eliminated in consolidation.

Investments in nine real estate partnerships, wherein the Company is not
maintaining a controlling interest, are stated at cost plus equity in
undistributed net earnings since dates of acquisition.

Minority interest, as reported in the consolidated balance sheets,
includes the income or loss for the minority investors of real estate
partnerships. This minority interest balance fluctuates due to current year
income or loss, contributions to, and distributions from, the partnerships;
changes in ownership percentages; or the addition or deletion of partnerships
from the group of consolidated partnerships.

Debt and Equity Securities

In May 1993, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 115, "Accounting for Certain Investments
in Debt and Equity Securities" (SFAS No. 115). This statement requires
investments in equity securities with a readily determinable fair value and
investments in all debt securities to be classified at the date of
acquisition in one of three categories. The three categories are (1) held to
maturity -- carried at amortized cost; (2) available for sale -- carried at
fair value (with unrealized gains and losses, net of tax, flowing through a
separate component of stockholders' equity); and (3) trading account --
carried at fair value (with unrealized gains and losses flowing through the
income statement). Effective December 31, 1993, the Company adopted SFAS No.
115. The fair value of securities is based on quoted market prices. Prior to
1993, the Company carried all debt securities at amortized cost (because it
had the intent and ability to hold such securities until maturity) and all
equity securities at the lower of aggregate cost or market.

Net Investment in Finance Receivables

Net investment in finance receivables consists of commercial leasing and
financing receivables, and lease residual value receivables. Receivables are
stated at gross balances net of unearned income and net of the allowance for
possible lease and loan losses.

Real Estate Investment Activity

Included in Equity Investments in Real Estate Partnerships and Property
Under Operating Leases are various investments in commercial real estate.
This activity principally involves the formation and management of investment
partnerships, property management, and related advisory and funding
activities. The forty-three properties owned and managed as of December 31,
1994 are classified as follows: eighteen are office buildings, sixteen are

<PAGE> 41
HORRIGAN AMERICAN, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)

NOTE A -- SUMMARY OF ACCOUNTING POLICIES -- (Continued)

industrial buildings, two are limited service hotels, five are various retail
centers and two are various other commercial properties. Fifteen of the
properties are multi-tenant, excluding the hotels. Significant geographic
concentrations (based on property cost) within the portfolio are: Florida (27%),
Pennsylvania (22%), New Jersey (14%) and Michigan (10%).

Real estate properties are recorded at the lower of cost or net realizable
value. Properties that are believed to have experienced material decreases in
net realizable value below book value, of a permanent nature, are written
down in the current reporting period at the time of such determination. In
making such determinations, consideration is given to such factors as cash
flows, reserves, vacancy factors, capitalization rates and growth rates.

On a periodic basis, or upon the occurrence of a triggering event (e.g.,
default of a major tenant), management performs an internal valuation on such
properties. These valuations reflect current expectations relating to cash
flows, reserves, vacancy factors, capitalization rates and growth rates. If
such valuation results in the devaluation of a property, which management
believes is other than temporary, that valuation is recognized as a charge to
earnings in the current period.

Revenue Recognition

The accounting for nonrefundable fees and costs associated with
originating or acquiring loans and initial direct costs of leases is
presented in accordance with Statement of Financial Accounting Standards No.
91.

Income on direct finance leases included in the minimum lease payments is
deferred and earned on the interest method to reflect a constant periodic
rate of return on the net investment in the lease. Residual values of leased
equipment represent the estimated fair value of the equipment at the
conclusion of the lease. Residual values for direct finance leases are earned
on the interest method over the life of the related leases.

Income on commercial finance receivables is earned on the interest method
to reflect a constant periodic rate of return.

The accrual of income on finance receivables is discontinued once a
finance receivable becomes one day past due. Also, when in management's
judgment it is determined that a reasonable doubt exists as to the
collectibility of additional income, future payments are applied to the
principal balance only, and the finance receivable is classified as
non-performing.

Rentals from equipment operating leases are recognized as income when due.
Depreciation is provided on the double declining-balance method over the
useful life of the equipment as follows: transportation and machinery
equipment -- five years; office, data processing and other equipment -- four
to five years.

Rentals from real estate operating leases are recognized as income when
due. Depreciation is provided on the straight-line method over the useful
life of the property: nineteen to thirty-nine years.

Loan Impairment

In May 1993, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 114, "Accounting by Creditors for
Impairment of a Loan" (SFAS No. 114). In October 1994, the Financial
Accounting Standards Board issued Statement of Financial Accounting Standards
No. 118, "Accounting by Creditors for Impairment of a Loan -- Income
Recognition and Disclosures" (SFAS No. 118) which amends SFAS No. 114. These
statements require that certain impaired loans be measured based on the
present value of expected future cash flows discounted at the loan's
effective interest rate. This statement excludes leases as defined in SFAS
No. 13, Accounting for Leases.

<PAGE> 42

HORRIGAN AMERICAN, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)

NOTE A -- SUMMARY OF ACCOUNTING POLICIES -- (Continued)

Effective January 1, 1994, the Company adopted SFAS No. 114 and SFAS No.
118. The cumulative effect of this change in the method of accounting for
loan impairment is $0 to the 1994 consolidated statement of operations. The
Company will recognize future changes in the present value of impaired loans
by reporting the entire charge as bad-debt expense in the same manner in
which impairment initially was recognized.

Allowance for Possible Lease and Loan Losses

The allowance for possible lease and loan losses is based on a periodic
evaluation of the finance receivable portfolio and reflects an amount that in
management's opinion is adequate to absorb known and inherent losses in the
portfolio.

Management considers a variety of factors when evaluating the allowance
recognizing that an inherent risk of loss always exists in the lending
process. Consideration is given to the impact of current economic conditions,
diversification of the loan portfolio, historical loss experience, results of
loan reviews, borrower's financial and managerial strengths, the adequacy of
underlying collateral and other relevant factors. While management uses the
best available information to make such evaluations, future adjustments to
the allowance may be necessary if conditions differ substantially from the
assumptions used in making the evaluation. The provision for possible lease
and loan losses is charged to operating expense. Lease and loan losses are
charged directly against the allowance and recoveries on previously
charged-off leases and loans are added to the allowance.

Derivative Financial Instruments

Interest rate swap agreements are entered into as hedges against
fluctuations in the interest rates of specifically identified liabilities.
There is no effect on the total liabilities of the Company, however, net
amounts receivable or payable under agreements designated as hedges are
recorded as adjustments to the interest expense related to the hedged
liability.

Property and Equipment

Depreciation on fixed assets (not including property leased to others) is
provided primarily by the straight-line method over the estimated useful
lives of the respective asset classes as follows: building and improvements
- -- five to forty years; office and data processing equipment -- two to eight
years.

Income Taxes

Statement of Financial Accounting Standards No. 109, "Accounting for
Income Taxes" (SFAS No. 109) requires a change from the deferred method of
accounting for income taxes of APB Opinion 11 to the asset and liability
method of accounting for income taxes. Under the asset and liability method
of SFAS No. 109, deferred tax assets and liabilities are recognized for the
future tax consequences attributable to differences between the financial
statement carrying amounts of existing assets and liabilities and their
respective tax bases. Deferred tax assets and liabilities are measured using
enacted tax rates expected to apply to taxable income in the years in which
those temporary differences are expected to be recovered or settled. Under
SFAS No. 109, the effect on deferred tax assets and liabilities of a change
in tax rates is recognized in income in the period that includes the
enactment date.

Effective January 1, 1993, the Company adopted SFAS No. 109. The
cumulative effect of this change in the method of accounting for income taxes
was $0 to the 1993 consolidated statement of operations.

<PAGE> 43

HORRIGAN AMERICAN, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)

NOTE A -- SUMMARY OF ACCOUNTING POLICIES -- (Continued)

Pursuant to the deferred method under APB Opinion 11, which was applied in
1992 and prior years, deferred income taxes were recognized for income and
expense items that were reported in different years for financial reporting
purposes and income tax purposes using the tax rate applicable for the year
of the calculation. Under the deferred method, deferred taxes were not
adjusted for subsequent changes in tax rates.

Retirement and Postemployment Benefits

Effective January 1, 1994, the Company has a 401(k) plan covering
substantially all employees who qualify as to age and length of service. This
plan includes a profit sharing component. During 1993 and 1992, the Company
had two defined contribution profit sharing plans. The contribution
percentage is determined each year by the Board of Directors of each
subsidiary of the Company. Profit sharing expense, aggregating $299,000,
$315,000 and $295,000 in 1994, 1993 and 1992, respectively, was reported as
salaries and employee benefits. The Company currently has no postretirement
benefits as contemplated under Statement of Financial Accounting Standards
No. 106, nor postemployment benefits as contemplated under Statement of
Financial Accounting Standards No. 112.

Earnings Per Common Share

Earnings per common share are computed using weighted average shares and
dilutive stock options outstanding during each year after deducting preferred
dividend requirements from net income. Earnings per common share assuming
full dilution are not reported because dilution arising from the stock
options is less than three percent.

Reclassifications

Prior period amounts have been reclassified when necessary to conform to
the current year's presentation.

NOTE B -- DEBT AND EQUITY SECURITIES
The following is a summary of information as of and for the years ended
December
31:

<TABLE>
<CAPTION>
Gross Gross
Aggregate unrealized unrealized Gross Gross
Aggregate fair holding holding realized realized
(In thousands) cost value gains losses Proceeds gains losses
- -------------- --------- ------ ---------- ---------- -------- ----- ------
<S> <C> <C> <C> <C> <C> <C> <C>
Available-for-sale equity securities:
1994 ......... $1,195 $2,335 $1,140 $ -- $175 $ 30 $ --
1993 ......... $ 615 $2,697 $2,082 $ -- $629 $413 $ 1

Equity securities:
1992 ......... $ 666 $1,991 $1,325 $ -- $ 66 $ 9 $ 3

Debt securities:
1994 ......... $ -- $ -- $ -- $ -- $ -- $ -- $ --
1993 ......... $ -- $ -- $ -- $ -- $ 44 $ -- $ 1
1992 ......... $ 53 $ 48 $ -- $ 5 $145 $ -- $ --
</TABLE>

<PAGE> 44

HORRIGAN AMERICAN, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)

NOTE C -- NET INVESTMENT IN FINANCE RECEIVABLES
Net investment in finance receivables and maximum terms remaining as of
December 31, 1994 and 1993 are as follows:

<TABLE>
<CAPTION>
Maximum
terms-months
-------------
(In Thousands) 1994 1993 1994 1993
- --------------- -------- -------- ------ ------
<S> <C> <C> <C> <C>
Commercial financing receivables ............ $ 31,088 $ 35,050 63 63
Direct finance leasing receivables .......... 138,253 104,320 58 58
-------- --------
Total receivables .......................... 169,341 139,370
Residual valuation .......................... 6,345 4,943 58 58
Unearned income ............................. (21,558) (16,731)
Allowance for possible lease and loan losses (6,055) (5,438)
-------- --------
Total net investment ....................... $148,073 $122,144
======== ========
</TABLE>

Installments due on total receivables for each of the five years
subsequent to December 31, 1994 are as follows: 1995, $76,659,000; 1996,
$49,359,000; 1997, $26,909,000 1998, $10,458,000; 1999, $3,963,000; and
thereafter, $1,993,000.

Included within the finance receivables are non-performing leases and
loans on which the Company is applying payments to principal only. Such
receivables approximated $245,000 and $101,000 as of December 31, 1994 and
1993, respectively. If these receivables had been current in accordance with
their original terms, finance revenue in 1994, 1993 and 1992 would have
increased $35,000, $39,000 and $100,000, respectively.

The Company's credit risk of finance receivables arises in the normal
course of business, principally from commercial businesses, throughout the
United States with some geographic concentration (based on equipment cost) in
California (17%), Pennsylvania (9%), Texas (8%), New York (6%) and Florida
(6%). There is also some leased asset equipment concentration (based on total
receivables) in construction (28%), computers and computer software (26%),
manufacturing/machine tools (5%) and party rental equipment (5%). The Company
has identified by industry type (based on total receivables) the following
significant concentrations of credit risk as of December 31, 1994: Equipment
Rental (36%), Attorneys (14%) and manufacturing/machine tools (7%). The
Company retains title to the equipment asset in the case of its direct
finance leasing receivables, while the lessee bears the contractual risk of
loss and the duty to maintain and insure the asset. The commercial financing
receivables are generally secured by inventory, receivables, real estate or
equipment.

NOTE D -- ALLOWANCE FOR POSSIBLE LEASE AND LOAN LOSSES

The following is a summary of the Company's allowance for possible lease and
loan losses as of and for the years ended December 31:

<TABLE>
<CAPTION>
Balance at Charge-offs, Balance at
beginning net of Acquired end
(In thousands) of year Provision recoveries Allowance of year
- -------------- ------------ ----------- -------------- ----------- ------------
<S> <C> <C> <C> <C> <C>
1994 ......... $5,438 1,377 (974) 214(A) $6,055
1993 ......... $4,613 1,573 (1,600) 852(A) $5,438
1992 ......... $4,210 2,190 (2,027) 240(A) $4,613
</TABLE>

(A) The balance of the allowance for possible lease and loan losses
increased as a result of the acquisition of portfolios of finance
receivables.

<PAGE> 45

HORRIGAN AMERICAN, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)

NOTE E -- EQUITY INVESTMENTS IN REAL ESTATE PARTNERSHIPS

Investments in nine unconsolidated real estate partnerships consist of total
ownership interests ranging from 10% to 58.2%.

Summary combined financial information for the investee partnerships as of
and for the years ended December 31, 1994 and 1993 follows:

<TABLE>
<CAPTION>
(In thousands) 1994 1993
---------- ----------
<S> <C> <C>
Land, building and improvements, net . $ 10,350 $ 13,648
Other assets ......................... 1,365 1,111
Long-term debt .................... (11,077) (14,318)
Other liabilities ................. (187) (205)
-------- --------
Net assets ........................... $ 451 $ 236
======== ========
Revenue: .............................
Rents on real estate operating
leases .......................... $ 1,076 $ 1,175
Hotel revenue & other ............. 4,570 4,982
Gain on sale of property and
equipment ....................... 2,399 291
-------- --------
Total revenue .................. 8,045 6,448
======== ========
Net income ........................... $ 2,684 $ 349
======== ========
</TABLE>

The unamortized portion of the excess of cost over the Company's share of
net assets of investee partnerships was $33,000 and $56,000 as of December
31, 1994 and 1993, respectively.

The Company provides management services to the investee partnerships
under terms of an agreement. The revenue for these services, aggregating
$262,000, $230,000 and $223,000 in 1994, 1993 and 1992, respectively, was
reported as management income.

The Company has commercial loans outstanding to investee partnerships of
$2,299,000 and $2,412,000 as of December 31, 1994 and 1993, respectively. The
Company has also guaranteed the debt (refer to note O) of certain
unconsolidated real estate partnerships.

The Company has sold certain partnership interests. Total gain on sale of
the partnership interests, aggregating $307,000, $0 and $1,000 in 1994, 1993
and 1992, respectively, was reported as other income.

NOTE F -- PROPERTY UNDER OPERATING LEASES

The following is a schedule of the Company's investment in property under
operating leases as of December 31, 1994 and 1993:

<TABLE>
<CAPTION>
(In thousands) 1994 1993
--------- ---------
<S> <C> <C>
Real Estate Cost:
Land ........................... $ 7,922 $ 7,002
Building and improvements ...... 32,653 29,782
------- -------
Total ....................... 40,575 36,784
Accumulated depreciation ....... (5,934) (5,365)
------- -------
Real estate, net ............. 34,641 31,419
------- -------
Equipment Cost:
Transportation and office
equipment .................... 666 335
Accumulated depreciation ....... (285) (123)
------- -------
Equipment, net ............... 381 212
------- -------
Property under operating leases ... $35,022 $31,631
======= =======
</TABLE>

<PAGE> 46

HORRIGAN AMERICAN, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)

NOTE F -- PROPERTY UNDER OPERATING LEASES -- (Continued)

Depreciation for each of the three years ended December 31 follows:

<TABLE>
<CAPTION>
(In thousands) 1994 1993 1992
- --------------------- -------- -------- --------
<S> <C> <C> <C>
Depreciation Expense:
Real estate ...... $1,049 $1,053 $1,144
Equipment ........ 173 94 29
-------- -------- --------
Total .......... $1,222 $1,147 $1,173
======== ======== ========

</TABLE>

The estimated minimum future rental revenues on operating leases for each
of the five years subsequent to December 31, 1994 are as follows: 1995,
$5,695,000; 1996, $4,575,000; 1997, $3,795,000; 1998, $3,498,000; 1999,
$3,433,000; and thereafter, $18,837,000.

NOTE G -- PROPERTY AND EQUIPMENT

Property and equipment utilized by the Company is summarized by major
classifications as follows as of December 31:

<TABLE>
<CAPTION>
(In thousands) 1994 1993
--------- ---------
<S> <C> <C>
Buildings (owned by consolidated real estate
partnerships) .......................................... $ 1,856 $ 2,189
Office and data processing equipment .................... 2,229 2,216
------- -------
4,085 4,405
Accumulated depreciation ................................ (1,697) (2,276)
------- -------
2,388 2,129
Land (owned by consolidated real estate partnerships) ... 172 172
------- -------
$ 2,560 $ 2,301
======= =======
</TABLE>

Land and building value is based on the percentage of space occupied by
the Company. For the years ended December 31, 1994, 1993 and 1992,
depreciation of $301,000, $308,000 and $294,000, respectively, was provided
on the Company's property and equipment.

NOTE H -- SHORT-TERM BORROWINGS

Short-term borrowings represent: (1) Amounts payable to banks, including
unsecured demand notes with fixed interest rates and unsecured floating or fixed
interest rate lines of credit of $42,707,000 as of December 31, 1994. The
Company has the option to borrow $13,707,000 in long-term, fixed rate loans at
negotiated rates which would reduce the available short-term lines of credit
when elected. Short-term lines of credit in use as of December 31, 1994 are
$20,250,000. (2) Amounts payable upon demand to holders of floating interest
rate subordinated investment certificates.

<PAGE> 47

HORRIGAN AMERICAN, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)
NOTE H -- SHORT-TERM BORROWINGS -- (Continued)

The following is a summary of information pertaining to such borrowings as
of and for the years ended December 31:

<TABLE>
<CAPTION>
Weighted Maximum Average Weighted
average amount amount average
Category Balance interest outstanding outstanding interest
of at end of rate at during during rate during
(In thousands) borrowings year end of year the year the year the year
------------ ----------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
1994 ......... (1) Banks $20,250 6.68% $20,250 $16,896 5.66%
1994 ......... (2) Other $ 3,143 4.10% $ 3,732 $ 3,690 4.01%
- ------------------------------------------------------------------------------------------------
1993 ......... (1) Banks $13,500 4.41% $13,500 $ 8,807 4.44%
1993 ......... (2) Other $ 2,805 4.00% $ 4,286 $ 3,810 4.39%
- ------------------------------------------------------------------------------------------------
1992 (A) ..... (1) Banks $ 6,250 4.61% $ 8,000 $ 5,389 5.28%
1992 (A) ..... (2) Other $ 3,644 5.00% $ 4,592 $ 3,803 5.37%
</TABLE>

(A) Average amount outstanding during the year is computed by dividing the
total monthly outstanding principal balances by 12.

Weighted average interest rate during the year is computed by dividing
the actual short-term interest expense by the average short-term
borrowings outstanding.

NOTE I -- LONG-TERM DEBT

Long-term debt as of December 31, 1994 and 1993 consists of the following:

<TABLE>
<CAPTION>
(In thousands) 1994 1993
--------- ---------
<S> <C> <C>
Senior debt:

Unsecured notes payable to banks and other financial
institutions, with interest rates from 4.77% to 9.30%, due
through December, 1998 .................................... $79,508 $63,733

Nonrecourse debt:

Nonrecourse notes payable to banks, with interest rates
from 6.88% to 10.5%, due at various dates through December,
2004. The notes are collateralized by real estate property 20,577 18,358

Nonrecourse note payable to bank with interest at prime
plus 3% ................................................... -- 77

Other long-term debt:

Secured notes payable to banks, with interest rates from
6.88% to 10.5%, due at various dates through May, 2008. The
notes are collateralized by real estate property .......... 5,005 5,080

Unsecured notes payable, with interest rates from 6.25% to
15.05%, due at various dates through April, 1998 .......... 156 --
</TABLE>

<PAGE> 48

HORRIGAN AMERICAN, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)

NOTE I -- LONG-TERM DEBT -- (Continued)

<TABLE>
<CAPTION>
(In thousands) 1994 1993
---------- ----------
<S> <C> <C>
Subordinated investment certificate debt:

Certificates subordinated in right of payment to indebtedness
of the Company (including indebtedness of any subsidiary
guaranteed by the Company) for money borrowed from banks or
other financial institutions. The fixed rate certificates have
various rates from 5.15% to 10.5% and mature at various dates
to 2002 ....................................................... 25,864 25,964

Junior subordinated debenture debt:

A 9% debenture due in 2002 subordinated in right of payment to
indebtedness of the Company (including indebtedness of any
subsidiary guaranteed by the Company) for money borrowed from
banks, other financial institutions and subordinated investment
certificate holders ........................................... 103 103
-------- --------
Total long-term debt ..................................... $131,213 $113,315
======== ========
</TABLE>

The Company has $111,433,000 in unsecured lines of credit with banks. The
total lines in use as of December 31, 1994 are $77,508,000.

The aggregate maturities of long-term debt for each of the five years
subsequent to December 31, 1994 are as follows: 1995, $58,728,000; 1996,
$31,659,000; 1997, $16,143,000; 1998, $4,828,000; 1999, $12,545,000; and
thereafter, $7,310,000.

NOTE J -- CERTAIN COVENANTS

The terms of certain unsecured loan agreements provide for various
restrictive covenants. The most significant of these provide that: (1)
American Equipment Leasing Co., Inc. and its subsidiaries, AEL Leasing Co.,
Inc., American Commercial Credit Corp. and American Capital Leasing
Corporation, on a consolidated basis, shall maintain (a) a minimum cash flow
ratio of receipts to disbursements, as specifically defined, of 1 to 1 (b) a
ratio of debt to tangible net worth not in excess of 7 to 1 and (c) a minimum
tangible net worth of $21,000,000. (2) AEL Leasing Co., Inc., American
Commercial Credit Corp. and American Capital Leasing Corporation, on a
separate Company basis, shall maintain a ratio of debt to tangible net worth
not in excess of 7 to 1.

The Company is in compliance with the above covenants as of December 31,
1994.

<PAGE> 49

HORRIGAN AMERICAN, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)

NOTE K -- STOCKHOLDERS' EQUITY

The 8% noncumulative and nonvoting preferred stock was purchased and retired
by the Company in April, 1994. The preferred stock dividend was paid in January
and April, 1994.

The common stock of the Company is covered by an agreement restricting its
sale, redemption or transfer.

The Company terminated on November 30, 1992 a non-qualified stock option plan
for certain key employees. The options are exercisable at a price of 100% of the
fair market value of the stock on the date that the option is granted. Options
granted under the plan are exercisable at any time and expire five years from
the date of issuance. An analysis of the activity in this plan for the last
three years follows:

Option price
Number of common shares per share for
1994 1993 1992 current year
---- ---- ---- ------------
<S> <C> <C> <C> <C>
Options outstanding, January 1..... 74,970 102,620 141,500 --
Options exercised ................ (15,825) (11,300) (16,045) $7.41
Options forfeited ................ (5,175) (16,350) (22,835) $7.41
------- ------- -------
Options outstanding, December 31... 53,970 74,970 102,620
======= ======= =======
</TABLE>

The total options outstanding, by each year's option price, as of December
31, 1994 are: 23,900 at $7.79 and 30,070 at $6.43.

NOTE L -- INCOME TAXES

The total provision for income taxes for the years ended December 31
consists of:

<TABLE>
<CAPTION>
(In thousands) 1994 1993 1992
---- ---- ----
<S> <C> <C> <C>
Deferred income tax (benefit)
Federal .................... $ 195 $ (18) $ (979)
State ...................... 87 124 (157)
------ ------- --------
Total deferred ........ 282 106 (1,136)
------ ------- --------
Current income tax
Federal .................... 1,843 1,596 882
State ...................... 377 198 398
------ ------- --------
Total current ......... 2,220 1,794 1,280
------ ------- --------
Total provision ....... $2,502 $1,900 $ 144
====== ====== ========
</TABLE>

The sources of deferred income taxes (benefits) and the tax effect of each
for the years ended December 31 are as follows:

<TABLE>
<CAPTION>
(In thousands) 1994 1993 1992
---- ---- ----
<S> <C> <C> <C>
Direct finance lease revenue and expenses ............. $ 330 $ 141 $ (743)
Alternative minimum tax credit ........................ -- -- 1,083
Partnership revenue and expenses including write-down
of real estate ....................................... 57 (216) (1,310)
State tax provision (less than) in excess of state
taxes currently payable .............................. 87 124 (157)
Other ................................................. (192) 57 (9)
----- ----- --------
Total deferred .................................. $ 282 $ 106 $ (1,136)
===== ===== ========
</TABLE>

<PAGE> 50

HORRIGAN AMERICAN, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)

NOTE L -- INCOME TAXES -- (Continued)

The following is a reconciliation between the statutory federal income tax
rate and the effective income tax rate on the total provision for income
taxes for the years ended December 31:

<TABLE>
<CAPTION>
1994 1993 1992
---- ---- ----
<S> <C> <C> <C>
Statutory federal income tax rate applied to
earnings (loss) before income taxes and minority
interest .......................................... 34.0% 34.0% (34.0%)
Limited taxability of dividend income .............. (0.1) (0.1) (1.7)
State taxes, net of federal tax benefit ............ 4.8 4.2 31.8
Tax-exempt interest income ......................... -- -- (1.2)
Minority interest of partnership investments ....... (0.6) (0.7) 31.6
Purchase accounting adjustment ..................... 1.5 0.3 3.4
Other, net ......................................... (0.2) (0.3) (1.1)
---- ---- ----
Effective rate ............................... 39.4% 37.4% 28.8%
==== ==== ====
</TABLE>

The tax effects of temporary differences that give rise to significant
portions of the deferred tax assets and deferred tax liabilities as of
December 31, 1994 and 1993, in accordance with SFAS No. 109, are presented
below:

<TABLE>
<CAPTION>
(In thousands) 1994 1993
------------- ---- ----
<S> <C> <C>
Deferred tax assets:
Allowance for possible lease and loan
losses .................................. $ 1,195 $ 840
Partnership revenue and expenses including
write-down of real estate ............... 1,584 1,674
Other .................................... 202 167
------- -------
Total gross deferred tax assets ..... 2,981 2,681
------- -------
Deferred tax liabilities:
Direct finance lease revenue and expenses (2,349) (1,229)
Net unrealized holding gains for
available-for- sale securities .......... (388) (708)
Other .................................... (147) (71)
------- -------
Total gross deferred tax liabilities (2,884) (2,008)
------- -------
Deferred income taxes, net .......... $ 97 $ 673
======= =======
</TABLE>

In order to fully realize the gross deferred tax asset, the Company will
need to generate future taxable income of approximately $8,800,000. Based
upon the Company's current and historical tax history and the anticipated
level of future taxable income, management of the Company believes the
existing deductible temporary differences will, more likely than not, reverse
in future periods in which the Company generates net taxable income. There
can be no assurance, however, that the Company will generate any earnings or
any specific level of continuing earnings.

For income tax reporting purposes: The Company has no credit carryover to
offset regular tax liability during 1994.

For financial reporting purposes: (1) The Company records a provision for
income taxes on the minority interest share of loss absorbed by the Company
from any partnership investment. (2) The Company has no credit carryover to
offset regular tax liability during 1994. (3) The Company records a deferred
tax liability on the net unrealized holding gains for available-for-sale
securities in accordance with SFAS No. 115.

<PAGE> 51

HORRIGAN AMERICAN, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)

NOTE M -- BUSINESS SEGMENTS

The Company operates principally in three business segments, reports a fourth
segment pertaining to general corporate and other, and discloses any significant
transaction which is not specifically related to the normal operations of a
segment:

COMMERCIAL LEASING AND FINANCING -- leasing of various types of equipment
under direct finance and operating leases, lease financing programs, and direct
cash loans to commercial businesses.

REAL ESTATE -- leasing of real estate property under operating leases, and
investments in real estate. Two limited service hotel operations provide
operating earnings on two equity investments. Real estate management,
development and advisory services; and hotel management services are included.

FURNITURE AND EQUIPMENT SALES -- selling various types of office furniture
and equipment, and servicing equipment sold.

GENERAL CORPORATE AND OTHER -- includes investment activities other than real
estate; and consolidating elimination entries which are not material.

UNALLOCATED GENERAL CORPORATE EXPENSE -- consists of interest expense
allocated to the investments in marketable securities and long-term investments.

Revenues by segment are comprised of revenues from unaffiliated customers;
intersegment revenues are not significant.

Operating profit is total revenue less directly incurred costs and expenses,
and allocated corporate operating costs and expenses.

Identifiable assets by industry are those assets of the Company that are used
exclusively in or are reasonably allocated to operations in each industry.
Assets employed by the segment "general corporate and other" are principally
cash, investments exclusive of the real estate industry segment, and property
and equipment.

The following segment information is reconciled to the related consolidated
financial statements' amounts.

<TABLE>
<CAPTION>
(In thousands) 1994 1993 1992
- -------------- ---- ---- ----
<S> <C> <C> <C>
Revenues by business segment:
Commercial leasing and financing .............. $20,400 $19,009 $20,862
Real estate ................................... 6,984 5,493 1,822
Furniture and equipment sales ................. 1,177 694 345
General corporate and other ................... 64 461 67
------- ------- -------
Total .................................... $28,625 $25,657 $23,096
======= ======= =======
Operating earnings (loss) by business segment:
Commercial leasing and financing .............. $ 5,497 $ 5,220 $ 4,230
Real estate ................................... 800 (713) (4,744)
Furniture and equipment sales ................. 201 175 31
General corporate and other ................... (81) 440 52
------- ------- -------
Total .................................... 6,417 5,122 (431)
Unallocated general corporate expense ......... (72) (44) (69)
------- ------- -------
Earnings (loss) before income taxes and
minority interest ............................ $ 6,345 $ 5,078 $ (500)
======= ======= =======
</TABLE>

<PAGE> 52

HORRIGAN AMERICAN, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)

NOTE M -- BUSINESS SEGMENTS -- (Continued)

<TABLE>
<CAPTION>
(In thousands) 1994 1993 1992
- --------------- ---- ---- ----
<S> <C> <C> <C>
Identifiable assets by segment:
Commercial leasing and financing $150,944 $126,294 $111,578
Real estate .................... 39,465 35,486 37,559
Furniture and equipment sales .. 1,400 681 777
General corporate and other .... 2,521 2,492 3,349
-------- -------- --------
Total ..................... $194,330 $164,953 $153,263
======== ======== ========
Capital expenditures:
Commercial leasing and
financing:
Direct finance leases ..... $ 28,002 $ 24,383 $ 28,300
Operating leases .......... 348 328 75
Other ..................... 425 163 211
Real estate: ...................
Operating leases .......... 6,566 -- 294
Other ..................... 2 -- 2
Furniture and equipment sales .. 15 19 81
General corporate and other .... -- -- --
-------- -------- --------
Total ..................... $ 35,358 $ 24,893 $ 28,963
======== ======== ========
Depreciation and amortization:
Commercial leasing and
financing:
Direct finance leases ..... $ -- $ -- $ --
Operating leases .......... 173 94 29
Other ..................... 304 304 413
Real estate:
Operating leases .......... 1,049 1,053 1,144
Other ..................... 106 223 150
Furniture and equipment sales .. 39 33 33
General corporate and other .... -- -- --
-------- -------- --------
Total ..................... $ 1,671 $ 1,707 $ 1,769
======== ======== ========
</TABLE>

NOTE N -- LEASES

Rental expense included in operating expenses for each of the years in the
three-year period ended December 31, 1994 was $167,000, $77,000 and $64,000,
respectively.

As of December 31, 1994, the Company is committed to minimum rentals under
various operating leases totaling $760,000. The minimum annual rentals for each
of the five years subsequent to December 31, 1994 are as follows: 1995,
$197,000; 1996, $145,000; 1997, $134,000; 1998, $110,000; and 1999, $110,000;
and thereafter, $64,000.

NOTE O -- COMMITMENTS AND CONTINGENCIES

In the normal course of business, there are outstanding commitments and
contingent liabilities on which management does not anticipate any material
losses. Such commitments and contingent liabilities expose the company to
various degrees and types of risks, including credit risk, interest rate risk,
and liquidity risk.

A summary of significant commitments and contingent liabilities as of
December 31 follows:

<TABLE>
<CAPTION>
(In thousands) 1994 1993
- -------------- ---- ----
<S> <C> <C>
Unused lines of credit ........................................ $48,403 $38,183
Commitments to fund leases and loans .......................... $ 2,138 $ 924
Financial guarantees for unconsolidated real estate
partnerships ................................................. $ 2,253 $ 2,400
</TABLE>

<PAGE> 53

HORRIGAN AMERICAN, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)

NOTE O -- COMMITMENTS AND CONTINGENCIES -- (Continued)

Unused lines of credit represent conditional offers by the Company to lend
additional funds to qualified customers. Commitments to fund leases and loans
represent finance agreements secured by the Company wherein the equipment
collateral has not yet been delivered. Financial guarantees are conditional
commitments issued by the Company guaranteeing performance by an
unconsolidated real estate partnership to a third party.

As of December 31, 1994, the Company was party (plaintiff or defendant) to
certain legal actions. While any litigation has an element of uncertainty,
management, after reviewing these actions with legal counsel, is of the
opinion that the liability, if any, resulting from these actions will not
have a material effect on the financial condition or results of operations of
the Company.

DERIVATIVE FINANCIAL INSTRUMENTS

The Company has only limited involvement with derivative financial
instruments and does not use them for trading purposes. This involvement
under existing agreements is in the form of interest rate swap agreements
where the Company pays a fixed interest rate and receives a variable interest
rate. The Company manages its exposure to changes in interest rates on
certain floating-rate short-term borrowings up to the interest rate swap
notional principal amount outstanding. This strategy is utilized as an
alternative to fixed-rate long-term borrowings under the Company's interest
rate sensitivity objective of matching fixed-rate assets and fixed-rate
liabilities within a reasonable range, as measured with the Company's "gap"
analysis.

Interest rate swap transactions are not reflected in the above table. The
notional principal amounts of outstanding agreements were $7,587,701 and
$2,000,000 as of December 31, 1994 and 1993. The weighted average maturity of
these agreements was 2.4 and 2.2 years as of December 31, 1994 and 1993. The
weighted average fixed rate paid by the Company was 5.79% and the weighted
average variable rate received by the Company was 6.10% as of December 31,
1994.

The Company is exposed to loss (additional interest expense) in the event
of nonperformance by the counterparties to its agreements, whenever the
variable rate receivable exceeds the fixed rate payable as specified in the
agreements. The Company enters into agreements with credit worthy
counterparties and anticipates that counterparties will be able to fully
satisfy their obligations under the agreements. The Company does not obtain
collateral or other security to support these agreements.

NOTE P -- CASH FLOW INFORMATION

The following is the reconciliation of net earnings (loss) to net cash
provided by operating activities for the years ended December 31:

<TABLE>
<CAPTION>
(In thousands) 1994 1993 1992
- -------------- ---- ---- ----
<S> <C> <C> <C>
Net earnings (loss) ................................... $3,688 $3,047 $ (413)
Noncash expenses, revenues, losses and gains included
in net earnings (loss):
Depreciation and amortization ........................ 1,671 1,707 1,769
Excess of provision for income taxes over (under)
income taxes paid .................................. 517 (582) (1,527)
Net change in prepaid expenses and payables .......... (82) 437 351
Decrease (increase) in income receivable ............. 5 136 (7)
Lease purchase options: cash received in excess of
earned ............................................. 1,484 1,682 2,126
</TABLE>

<PAGE> 54

HORRIGAN AMERICAN, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)

NOTE P -- CASH FLOW INFORMATION -- (Continued)

<TABLE>
<CAPTION>
(In thousands) 1994 1993 1992
- -------------- ---- ---- ----
<S> <C> <C> <C>
Increase (decrease) in interest payable ............... $ 108 $ (41) $ (145)
Gain on sale of debt and equity securities, finance and
operating leases, property and equipment, and
investments ......................................... (1,407) (1,479) (1,283)
Provision for possible lease and loan losses .......... 1,377 1,573 2,190
Equity (gain) loss in real estate partnerships and
associated companies ................................ (747) 76 279
Provision for write-down of real estate ............... -- 488 4,302
Minority interest income (loss) ....................... 155 131 (231)
------- ------- -------
Net cash provided by operating activities .............. $ 6,769 $ 7,175 $ 7,411
======= ======= =======
</TABLE>

The following is a schedule of noncash investing and financing activities
for the years ended December 31:

<TABLE>
<CAPTION>
(In thousands) 1994 1993 1992
- -------------- ---- ---- ----
<S> <C> <C> <C>
Acquisition of American Capital Leasing Corporation
(1994) and Canyon Capital, Inc. (1993):
Net investment in finance receivables .................. $ 9,542 $ 12,186 $ --
Other assets ........................................... $ 67 $ 87 $ --
Short-term debt assumed ................................ $(7,000) $ (4,985) $ --
Long-term debt assumed ................................. $ -- $ (5,656) $ --
Security deposits ...................................... $ (630) $ (1,392) $ --
Other liabilities ...................................... $(1,365) $ (240) $ --
Deferred income taxes assumed .......................... $ (614) $ -- $ --

Change in carrying value of available-for-sale
securities:
Investments in debt and equity securities .............. $ (942) $ 2,082 $ --
Deferred tax liabilities ............................... $ 320 $ (708) $ --
Net unrealized holding gains for available-for-sale
securities ........................................... $ 622 $ (1,374) $ --

Real estate partnerships, previously accounted for on the
equity method, now included in the consolidated
financial statements:
Operating lease assets and other assets acquired ....... $ -- $ -- $ 1,927
Long-term debt and other liabilities assumed ........... $ -- $ -- $(1,683)
Partnership capital .................................... $ -- $ -- $ (244)

Investment interest in real estate partnership received
from minority interest in payment of commercial finance
receivable ............................................. $ -- $ 397 $ 100

Land received in foreclosure of commercial finance
receivable ............................................. $ -- $ -- $ 627

Sales of ownership interest in real estate partnerships,
previously included in the consolidated financial
statements:
Operating lease assets and other assets acquired ....... $(1,604) $ -- $ --
Long-term debt and other liabilities assumed ........... $ 1,318 $ -- $ --
Partnership capital .................................... $ 286 $ -- $ --
</TABLE>

<PAGE> 55

HORRIGAN AMERICAN, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)

NOTE P -- CASH FLOW INFORMATION -- (Continued)

<TABLE>
<CAPTION>
(In thousands) 1994 1993 1992
- -------------- ---- ---- ----
<S> <C> <C> <C>
Assets acquired:
Goodwill associated with acquisition of business ....... $ 151 $-- $--
Furniture and fixtures acquired through capital
lease ................................................ $ 36 $-- $--
Long-term debt ......................................... $(187) $-- $--
</TABLE>

NOTE Q -- FAIR VALUES OF FINANCIAL INSTRUMENTS

Statement of Financial Accounting Standards No. 107, "Disclosures about Fair
Value of Financial Instruments" (SFAS No. 107), requires the estimation of fair
values of financial instruments, as defined in SFAS No. 107.

Limitations

Estimates of fair value are made at a specific point in time, based upon,
where available, relevant market prices and information about the financial
instrument. Such estimates do not include any premium or discount that could
result from offering for sale at one time the Company's entire holdings of a
particular financial instrument. For a substantial portion of the Company's
financial instruments, no quoted market exists. Therefore, estimates of fair
value are necessarily based on a number of significant assumptions (many of
which involve events outside the control of management). Such assumptions
include assessments of current economic conditions, perceived risks
associated with these financial instruments and their counterparties, future
expected loss experience and other factors. Given the uncertainties
surrounding these assumptions, the reported fair values represent estimates
only and, therefore, cannot be compared to the historical accounting model.
Use of different assumptions or methodologies are likely to result in
significantly different fair value estimates.

The estimated fair values presented neither include nor give effect to the
values associated with the Company's existing customer relationships,
property, equipment, goodwill or certain tax implications related to the
realization of unrealized gains or losses.

The following methods and assumptions were used by the Company to estimate
the fair value as of December 31, 1994 of each class of financial instrument.

Debt and equity securities

The fair value of debt and equity securities are based on quoted market
values.

Net investment in finance receivables

The fair value of net investment in finance receivables with variable
rates and no significant change in credit risk approximates the carrying
amount. The fair value of fixed-rate finance receivables is estimated by
discounting future cash flows using current rates at which similar leases and
loans would be made to borrowers with similar credit ratings and for similar
remaining maturities. Included in direct finance leasing receivables is the
fair value of lessee purchase options which approximates the net residual
valuation carrying amount.

Short-term borrowings

The fair value of short-term borrowings (refer to note H) is the amount
payable.

Customer deposits

Customer deposits are interest bearing and non-interest bearing deposits
received on finance lease receivables and real estate operating leases. The
carrying amount of these deposits approximates fair value.

<PAGE> 56

HORRIGAN AMERICAN, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)

NOTE Q -- FAIR VALUES OF FINANCIAL INSTRUMENTS -- (Continued)

Long-term debt

The fair value of the Company's fixed rate long-term debt is estimated
using discounted cash flow analyses based on the estimated current rates
offered by banks to the Company for debt of similar remaining maturities, or
current rates offered by the Company for subordinated investment certificate
debt with similar remaining maturities. The fair value of floating rate
long-term debt approximates the carrying amount.

Unused lines of credit

Proceeds from both short-term and long-term lines of credit are issued at
current market rates at the time of each borrowing. The fair value of such
unused lines is considered nominal.

Commitments

Unused lines of credit and commitments to fund leases and loans: the
Company does not charge a fee to extend lines of credit and commitments to
fund leases and loans to customers. Extension of credit is conditional upon
Company approval (of the amount, rate, and maturity) at the time of request.
The fair value of unused lines of credit and commitments to fund leases and
loans is considered nominal.

Financial guarantees for unconsolidated real estate partnerships: the
Company receives nominal fees for two agreements, and the estimated cost to
terminate such guarantees is considered nominal.

Derivative financial instruments: the fair value of interest rate swap
agreements is based on the cost to terminate the agreement. The costs were
obtained from the counterparties. The Company does not use the interest rate
swaps for trading purposes. See Note O to the Consolidated Financial
Statements.

The carrying amounts and estimated fair values of the Company's financial
instruments as of December 31 were as follows:

<TABLE>
<CAPTION>
1994 1993
------------------ -----------------------
Carrying Fair Carrying Fair
(In thousands) Amount Value Amount Value
- -------------- ------ ----- ------ -----
<S> <C> <C> <C> <C>
Debt and equity securities ................. $ 2,335 $ 2,335 $ 2,697 $ 2,697
-------- -------- -------- --------
Net investment in finance receivables
Commercial financing receivables .......... $ 31,088 $ 30,132 $ 35,050 $ 34,952
Direct finance leasing receivables ........ 123,040 118,605 92,532 91,856
Allowance for possible lease and loan
losses .................................. (6,055) -- (5,438) --
Total net investment .................... $148,073 $148,737 $122,144 $126,808
-------- -------- -------- --------
Short-term borrowings ...................... $ 23,393 $ 23,393 $ 16,305 $ 16,305
-------- -------- -------- --------
Customer deposits .......................... $ 2,316 $ 2,316 $ 2,188 $ 2,188
-------- -------- -------- --------

Long-term debt
Senior debt ............................... $ 79,508 $ 78,638 $ 63,733 $ 63,876
Nonrecourse and other debt ................ 25,738 25,492 23,515 24,205
Subordinated debt ......................... 25,967 26,452 26,067 27,191
-------- -------- -------- --------
Total long-term debt .................... $131,213 $130,582 $113,315 $115,272
-------- -------- -------- --------
Derivative financial instruments: ..........
(Gain) loss to terminate interest rate swap
agreements ............................... $ (1) $ (127) $ 1 $ 4
-------- -------- -------- --------
</TABLE>

<PAGE> 57

HORRIGAN AMERICAN, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (Continued)

NOTE R -- ACQUISITIONS

On June 1, 1993, the Company purchased all of the capital stock of Canyon
Capital, Inc. ("Canyon") whose principal business consisted of financing and
leasing equipment, for $4,270,000 in cash. Until the purchase, Canyon was a
wholly-owned subsidiary of KOA Holdings, Inc. The purchase price was based
principally on the book value of the common stock multiplied by a factor of
126.8%. The acquisition has been accounted for as a purchase and, accordingly,
the results of operations of Canyon have been included in the Company's
consolidated financial statements since the acquisition date.

On June 1, 1994, the Company purchased all of the capital stock of American
Capital Leasing Corporation ("ACL") whose principal business consists of
financing and leasing equipment, for $3,869,000 in cash. The purchase price was
based principally on the book value of the common stock multiplied by a factor
of 109.5%, less a credit because of ACL's deferred tax liability. The
acquisition has been accounted for as a purchase and, accordingly, the results
of operations of ACL have been included in the Company's consolidated financial
statements since the acquisition date.

The following unaudited pro forma financial information for the years ended
December 31, 1994 and 1993 presents the combined results of operations of the
Company, ACL and Canyon as if the acquisitions had occurred as of the beginning
of 1993, after giving effect to certain adjustments. The pro forma financial
information does not necessarily reflect the results of operations that would
have occurred had the Company, ACL and Canyon constituted a single entity during
such periods.

<TABLE>
<CAPTION>
1994 1993
---- ----
<S> <C> <C>
Commercial leasing and financing revenue.... $19,251,000 $20,465,000
Net earnings .............................. $ 3,705,000 $ 3,159,000
Earnings per share ........................ $ 1.18 $ 0.97
</TABLE>

In conjunction with the Company's acquisition of ACL, ACL recorded a total
pre-tax loss of $96,000 for the five months ended May 31, 1994 (consisting of
a non-recurring pre-tax charge of $400,000 and normal pre-tax operating
earnings of $304,000). The non-recurring pre-tax charge recorded by ACL was
for an expense accrual in conjunction with this transaction. This adjustment
is not reflected in the above pro formas because it is considered to be
non-recurring. Also, the pro forma adjustments record premium expense and
additional interest expense, and a provision for income taxes for the
conversion of ACL from an S corporation to a C corporation.

NOTE S -- SUBSEQUENT EVENT

Certain shareholders of the Company, through a stock swap exchange offer,
have committed to an exchange of at least 21,806 shares of the Company's common
stock for 90% of the common stock of the Company's wholly-owned subsidiary, The
Business Outlet, Inc., and additional commitments may be received. The exchange
of shares is expected to be recorded, for accounting purposes, as a sale of
investment in March 1995. The Company anticipates recognizing no significant
gain or loss. The major business activity of this subsidiary was reported as the
Furniture and Equipment Segment in Note M.

<PAGE> 58

INDEPENDENT AUDITORS' REPORT

THE BOARD OF DIRECTORS AND STOCKHOLDERS
AMERICAN CAPITAL LEASING CORPORATION:

We have audited the accompanying balance sheet of American Capital Leasing
Corporation as of December 31, 1993, and the related statements of
operations, stockholders' equity, and cash flows for the vear then ended.
These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.

We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of American Capital Leasing
Corporation as of December 31, 1993, and the results of its operations, and
its cash flows for the year then ended in conformity with generally accepted
accounting principles.

KPMG PEAT MARWICK LLP

January 5, 1994, except for note 7,
which is as of June 1, 1994
Portland, Oregon

<PAGE> 59

AMERICAN CAPITAL LEASING CORPORATION
BALANCE SHEET
DECEMBER 31, 1993

<TABLE>
<CAPTION>
<S> <C>
ASSETS (Note 5)
Current assets:
Cash ................................................................... $ 122,121
Net investment in direct financing leases (note 2) ..................... 3,622,736
Prepaid expenses ....................................................... 33,350
-----------
Total current assets ................................................. 3,778,207

Net investment in direct financing leases (note 2) ...................... 7,869,224
Furniture and equipment, net (note 3) ................................... 56,152
Other assets ............................................................ 1,840
-----------
$11,705,423
===========

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable ....................................................... $ 987,209
Amount due to affiliated company (note 6) .............................. 101,856
Other accrued liabilities .............................................. 87,399
Note payable to bank (note 5) .......................................... 6,100,000
-----------
Total current liabilities ............................................ 7,276,464
-----------
Lease deposits (non-interest bearing) ................................... 560,532

Stockholders' equity (note 2):
Common stock of $1 par value. Authorized 10,000 shares; issued and
outstanding 10,000 shares ........................................... 10,000
Additional paid-in capital ............................................. 2,000,205
Retained earnings ...................................................... 1,858,222
-----------
Total stockholders' equity ........................................... 3,868,427
Commitments (notes 4 and 7) .............................................
-----------
$11,705,423
===========
</TABLE>

See accompanying notes to financial statements.

<PAGE> 60

AMERICAN CAPITAL LEASING CORPORATION
STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 1993

<TABLE>
<CAPTION>
<S> <C>
Lease income .............................. $1,899,155
Other income .............................. 27,372
----------
Total income ........................... 1,926,527

General, administrative and selling
expenses ................................. 502,224
Provision for possible credit losses ...... 122,000
Interest expense .......................... 455,428
----------
Net income ............................. $ 846,875
==========

Net earnings per share .................... $ 84.69
==========
</TABLE>

See accompanying notes to financial statements.

===============================================================================

AMERICAN CAPITAL LEASING CORPORATION
STATEMENT OF STOCKHOLDERS' EQUITY
YEAR ENDED DECEMBER 31, 1993

<TABLE>
<CAPTION>
Number
of shares
outstanding Additional Total
common Common paid-in Retained stockholders'
stock stock capital earnings equity
------- ------ --------- ---------- ------------
<S> <C> <C> <C> <C> <C>
Balances, at December 31, 1992..... 10,000 $10,000 $2,000,205 $1,011,347 $3,021,552
Net income ....................... -- -- -- 846,875 846,875
------ ------- ---------- ---------- ----------
Balances, at December 31, 1993..... 10,000 $10,000 $2,000,205 $1,858,222 $3,868,427
====== ======= ========== ========== ==========
</TABLE>

See accompanying notes to financial statements.

<PAGE> 61

AMERICAN CAPITAL LEASING CORPORATION
STATEMENT OF CASH FLOWS
YEAR ENDED DECEMBER 31, 1993

<TABLE>
<CAPTION>
<S> <C>
Cash flows provided by operating activities:
Net income ......................................... $ 846,875
---------
Adjustments to reconcile net income to net cash
provided
(used) by operating activities:
Depreciation and amortization ................... 21,505
Increase in allowance for uncollectible leases .. 60,912
Changes in assets and liabilities:
Increase in net investment in direct
financing leases ........................... (859,563)
(Increase) decrease in prepaid expenses ..... 6,339
Increase in accounts payable ................ 653,181
Increase in amount due to affiliated company 4,365
Increase in other accrued liabilities ....... 15,215
Increase in lease deposits .................. 64,243
---------
Total adjustments ......................... (33,803)
---------
Net cash provided by operating activities . 813,072
---------
Cash flows used by investing activities --
Purchase of equipment .............................. (10,810)
---------
Net cash used by investing activities ..... (10,810)
---------
Cash flows used by financing activities --
Net reduction under line of credit agreement ....... (800,000)
---------
Net cash used by financing activities ..... (800,000)
---------
Net increase in cash ...................... 2,262
Cash at beginning of year ............................. 119,859
---------
Cash at end of year ................................... $ 122,121
=========
Supplemental disclosure of cash flow information --
Cash paid during the year for interest ............. $ 460,127
=========
</TABLE>

See accompanying notes to financial statements.

<PAGE> 62

AMERICAN CAPITAL LEASING CORPORATION
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1993

(1) SUMMARY OF ACCOUNTING POLICIES

(a) Nature of Business

American Capital Leasing Corporation (the Company) was incorporated in the
State of Oregon on September 5, 1989. The Company leases diversified types of
equipment, generally for a period of three to five years which represents a
substantial portion of the estimated economic life of the equipment.

(b) Accounting for Unearned Lease Income

The Company accounts for its leases as direct financing leases under the
provisions of Statement of Financial Accounting Standards No. 13, and
accordingly, the aggregate lease payments to be received over the term of the
leases plus the estimated residual value are capitalized as the Company's net
investment in the leases. The excess of the investment in the leases over the
cost of the equipment (unearned lease income) is recognized as income over
the term of the leases on the interest method to reflect a constant periodic
rate of return on the net investment in the leases.

The Company records all furniture and equipment at cost. Depreciation is
provided over the estimated useful lives of the respective assets on the
straight-line basis (generally five to ten years).

(d) Income Taxes

The Company and its stockholders have elected treatment as an S
Corporation under Federal income tax regulations whereby the Company is not
subject to corporate income taxes. Accordingly, there is no provision for
income taxes included in the accompanying financial statements.

(e) Earnings Per Share

Earnings per common share are based on the weighted average number of
common shares outstanding during the period. The weighted average number of
common shares used in the earnings per common share computation for the year
ended December 31, 1993 was 10,000 shares.

(2) NET INVESTMENT IN DIRECT FINANCING LEASES

The following lists the components of the net investment in direct
financing leases as of December 31, 1993:

<TABLE>
<CAPTION>
<S> <C>
Total minimum lease payments receivable ..... $13,484,084
Less allowance for uncollectibles ........... 178,912
-----------
13,305,172
Add estimated unguaranteed residual values of
leased equipment ........................... 1,766,689
-----------
15,071,861
Less unearned income ........................ 3,579,901
-----------
Net investment in direct financing leases $11,491,960
===========
Net investment classified as:
Current .................................. 3,622,736
Noncurrent ............................... 7,869,224
-----------
$11,491,960
===========
</TABLE>

<PAGE> 63

Future minimum lease payments to be received on direct financing leases
are as follows:

<TABLE>
<CAPTION>
Year Ended December 31,
- -----------------------
<S> <C>
1994 $ 5,535,197
1995 4,117,533
1996 2,180,242
1997 1,135,889
1998 515,223
-----------
Total $13,484,084
===========
</TABLE>

The realization of the estimated residual value of leased property depends
on the ultimate sale of the leased equipment at the end of the lease term.
The residual value is not a part of the contractual agreement with the lessee
but is based on values that have been realized in the past by the principals
in the Company and their history with similar businesses.

(3) FURNITURE AND EQUIPMENT

Furniture and equipment consists of the following at December 31, 1993:

<TABLE>
<CAPTION>
<S> <C>
Automobiles ...................... $ 41,515
Furniture ........................ 16,151
Office equipment ................. 36,260
Computer software ................ 19,795
--------
Total cost .................... 113,721
Less accumulated depreciation ..... 57,569
--------
Net furniture and equipment ..... $ 56,152
========
</TABLE>

(4) LEASES

The Company leases office facilities under a month-to-month agreement and
equipment under a long-term lease agreement. The equipment lease is
classified as an operating lease and expired in November 1993. Rental expense
for all leases was $16,470 for the year ended December 31, 1993.

(5) NOTE PAYABLE TO BANK

Note payable at December 31, 1993 of $6,100,000 consists of draws upon the
Company's loan and security agreement (hereinafter referred to as the
agreement) with First Interstate Bank of Oregon. If the bank declines the
Company's request to renew the agreement upon its expiration (June 30, 1994)
or any subsequent expiration date, the Company shall be entitled to convert
the then outstanding principle balance to an installment term loan (due 48
months from such expiration date). Borrowings under the agreement are secured
by a continuing security interest in all goods of the Company (including
receivables, intangible assets, furniture and equipment and cash) currently
owned or hereinafter acquired by the Company. The agreement contains certain
restrictive covenants with which the Company was in compliance as of December
31, 1994.

(6) RELATED PARTY TRANSACTIONS

During the year ended December 31, 1993, the Company made equipment
purchases from an affiliated company, in the amount of $678,578. Amounts due
to such affiliated company of $101,856 related to these transactions are
reflected as amount due to affiliated company in the accompanying balance
sheet.

(7) SUBSQUENT EVENT

On June 1, 1994, the Company entered into an agreement with American
Equipment Leasing Co., Inc. (the buyer) wherein the Company agreed to sell
all of its outstanding common stock as of June 1, 1994 to the buyer. Pursuant
to the agreement, the Company is obligated to pay certain miscellaneous costs
related to the acquisition in the amount of $400,000.

<PAGE> 64

HORRIGAN AMERICAN, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONSOLIDATED
CONDENSED STATEMENT OF OPERATIONS

The attached pro forma financial information gives effect to the
acquisition of American Capital Leasing Corporation ("ACL") by the Company.
The pro forma consolidated condensed statements of operations for the year
ended December 31, 1993 reflects the operations of the combined entities as
though the acquisition has been made at the beginning of 1993. It should be
read in conjunction with the historical consolidated financial statements and
notes thereto of the Company and ACL as of and for the year ended December
31, 1993.

The pro forma financial information does not purport to be indicative of
the actual results of operations that would have occurred if the acquisition
had been consummated on the date indicated or that may be obtained in the
future. Adjustments in anticipation of cost savings through consolidation of
the Company and ACL are not included.

The pro forma adjustments reflected in the pro forma statements of
operations include adjustments to amortize the premium on the acquired net
investment in finance receivables; to record the interest incurred on funds
borrowed to fund the purchase and to refinance all outstanding debt of ACL,
and to remove ACL's historical interest expenses; and to apply the Company's
estimated incremental income tax rate.

<PAGE> 65

HORRIGAN AMERICAN, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONSOLIDATED CONDENSED
STATEMENT OF OPERATIONS
Year ended December 31, 1993
($ In thousands, except per share data)

<TABLE>
<CAPTION>
Horrigan ACL Pro Forma
Historical Historical Adjustments Pro Forma
------------ ------------ ------------- -----------
<S> <C> <C> <C> <C>
Finance Revenues:
Commercial leasing and financing
revenues ........................... $ 17,401 $1,899 $ (312)(a) $ 18,988
Interest expense ...................... 6,511 455 307 (b) 7,273
---------- ---------- ------ ----------
Finance revenue margin ............. 10,890 1,444 (619) 11,715
Provision for possible lease and loan
losses ............................. 1,573 122 0 1,695
---------- -------- ------ ----------
Finance revenues after provision for
possible lease and loan losses .... 9,317 1,322 (619) 10,020
---------- ---------- ------ ----------
Net operating lease revenues ........... 2,017 0 0 2,017
Total other operating revenues ......... 2,575 27 0 2,602
Operating expenses: ....................
Salaries and employees benefits ....... (4,566) (237) 0 (4,803)
Other expenses ........................ (4,265) (265) 0 (4,530)
---------- ---------- ------ ----------
Earnings (loss) before income taxes and
minority interest ..................... 5,078 847 (619) 5,306
Provision for income taxes ............ 1,900 0 87 (c) 1,987
---------- ---------- ------ ----------
Earnings (loss) before minority interest 3,178 847 (706) 3,319
Minority interest loss ................ (131) 0 0 (131)
---------- ---------- ------ ----------
Net earnings (loss) .................... $ 3,047 $ 847 $ (706) $ 3,188
========== ========== ====== ==========
Net earnings per common share .......... $ 0.92 $ 0.97
========== ==========
Weighted number of shares outstanding .. 3,278,159 3,278,159
========== ==========
</TABLE>

- ------
(a) The finance receivables acquired were valued at their estimated fair values
as of May 31, 1994. The resulting premium is being amortized against finance
revenue over the remaining life of the portfolio to produce a constant yield
to maturity.

(b) The debt to fund the purchase of the capital stock of ACL and to pay-off all
of the outstanding debt as of June 1, 1994 has been borrowed under existing
Company credit lines at a rate of 7.3%. ACL's historical interest expense
has been removed and replaced with estimated interest expense under the new
funding terms using average balances outstanding for the period.

(c) The pro forma adjustment to the provision for income taxes is calculated
using an estimated incremental income tax rate of 38%.

<PAGE> 66

==============================================================================

TABLE OF CONTENTS

<TABLE>
<CAPTION>
Page
--------
<S> <C>
Available Information .................... 2
Incorporation of Certain Documents by
Reference ............................... 2
The Company .............................. 3
Investment Considerations and Risk Factors 3
Prospectus Summary ....................... 4
Capitalization ........................... 6
Use of Proceeds .......................... 8
Business ................................. 8
Selected Financial Data .................. 18
Management's Discussion and Analysis of
Financial Condition and Results of
Operations .............................. 19
Description of Subordinated Investment
Certificates ............................ 28
Legal Opinion ............................ 32
Experts .................................. 32
Additional Information ................... 32
Financial Statements ..................... 33
</TABLE>

------

No person has been authorized to give any information or to make any
representations, other than those contained in this Prospectus, in connection
with the offer contained in this Prospectus, and, if given or made, such
information or representations must not be relied upon. This Prospectus is
not an offer to sell or a solicitation of an offer to buy any security to
which this Prospectus relates in any State to any person to whom it is
unlawful for the Company to make such offer or solicitation. Neither the
delivery of this Prospectus nor any sale hereunder shall, under any
circumstances, create an implication that there has been no change in the
facts herein set forth since the date hereof.

=============================================================================

<PAGE> 67

=============================================================================

LOGO

Subordinated Investment Certificates
1995 Series 8
1995 Series A
1995 Series B
1995 Series C
Passbook Series

April , 1995

==============================================================================

<PAGE> 68

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

Item 14. Other Expenses of Issuance and Distribution.

Registration fee........................................ $ 8,620
Accounting and legal fees*.............................. 26,000
Printing and engraving*................................. 27,500
Blue sky fees*.......................................... 250
Trustee's fees.......................................... 2,200
Other*.................................................. 600
-------
$65,170
=======
- ----------
*Estimated

Item 15. Indemnification of Directors and Officers.

The registrant's by-laws require the registrant to indemnify any person who
was or is a party or is threatened to be made a party to or is involved in any
action, suit or proceeding (including an action or suit by or in the right of
the registrant) by reason of the fact that he is or was a director or officer of
the registrant or is or was serving at the request of the registrant as a
director, officer, employee, fiduciary or agent of another corporation, trust,
employee benefit plan or other enterprise against expenses, liabilities and
losses (including attorneys' fees, judgments, penalties, fines, ERISA excise
taxes or penalties and amounts paid or to be paid in settlement) reasonably
incurred or suffered by him in connection therewith if he acted in good faith
and in a manner he reasonably believed to be in, or not opposed to, the best
interests of the registrant, and, with respect to any criminal proceeding, had
no reasonable cause to believe his conduct was unlawful. Such indemnification as
to expenses is mandatory to the extent the individual is successful on the
merits of the matter. Indemnification is not permitted in connection with
actions or suits by or in the right of the registrant if the person is adjudged
liable to the registrant, unless a court determines that such indemnification
is proper. Pennsylvania law in addition permits the registrant to provide
similar indemnification to employees and agents who are not directors or
officers. The determination of whether an individual meets the applicable
standard of conduct may be made by the disinterested directors, independent
legal counsel, or the shareholders.

Item 16. Exhibits.

The following exhibits are filed herewith or incorporated by reference.

Certain exhibits are incorporated by reference to registrant's Annual Report on
Form 10-K for the year ended December 31, 1994 (the "1994 Form 10-K"); to
registrant's registration statement on Form S-2, No. 33-52745, filed March 18,
1994 (the "1994 Form S-2") or Amendment No. 1 thereto, filed April 26, 1994 (the
"1994 Amendment"); to registrant's Annual Report on Form 10-K for the year ended
December 31, 1993 (the "1993 Form 10-K"); to registrant's registration statement
on Form S-2, No. 33-59620, filed March 16, 1993 (the "1993 Form S-2"); to
registrant's current report on Form 8-K, filed June 16, 1993 (the "1993 Form
8-K"); to registrant's Annual Report on Form 10-K for the year ended December
31, 1992 (the "1992 Form 10-K"); to registrant's current report on Form 8-K,
filed February 18, 1992 (the "1992 Form 8-K"); to registrant's registration
statement on Form S-2, No. 33-46346, filed March 12, 1992 (the "1992 Form S-2");
to registrant's Annual Report on Form 10-K for the year ended December 31, 1991
(the "1991 Form 10-K"); to registrant's registration statement on Form S-2, No.
33-39469, filed March 15, 1991 (the "1991 Form S-2"); to registrant's
registration statement on Form S-2, No. 33-33771, filed March 7, 1990 (the "1990
Registration Statement"); to registrant's registration statement on Form S-2,
No. 33-28009, filed April 7, 1989 (the "1989 Registration Statement"); to
registrant's registration state- ment on Form S-2, No. 33-20953, filed March 30,
1988 (the "1988 Registration Statement"); to registrant's Annual Report on Form
10-K for the year ended December 31, 1987 (the "1987 Form 10-K"); to
registrant's registration statement on Form S-2, No. 33-12869, filed March 24,

<PAGE>69

1987 (the "1987 Registration Statement"); to registrant's registration statement
on Form S-2, No. 33-4051, filed March 17, 1986 (the "1986 Registration
Statement"); to registrant's Annual Report on Form 10-K for the year ended
December 31, 1985 (the "1985 Form 10-K"); to registrant's registration statement
on Form S-1, No. 2-96525, filed March 19, 1985 (the "1985 Registration
Statement"); to registrant's registration statement on Form S-1, No. 2-90161,
filed March 26, 1984 (the "1984 Registration Statement"); to registrant's
registration statement on Form S-1, No. 2-82551, filed March 21, 1983 (the "1983
Registration Statement") or Amendment No. 1 thereto, filed April 28, 1983 (the
"1983 Amendment"); to Amendment No. 1 to the registration statement on Form S-1,
No. 2-76479, of registrant's predecessor, Horrigan Companies, Inc. ("HCI"),
filed April 14, 1982 (the "1982 Amendment"); to Amendment No. 1, filed April 24,
1981, to HCI's registration statement on Form S-1, No. 2-71420, (the "1981
Amendment"); or to Amendment No. 1 to HCI's registration statement on Form S-1,
No. 2-58452, filed July 1, 1977 (the "1977 Amendment").

<TABLE>
<CAPTION>
Exhibit Exhibit Incorporation by Reference
No. Description (if applicable)
- ------- ----------- --------------------------
<S> <C> <C>
2.1 Asset Purchase Agreement dated Exhibit 1 to the 1992 Form 8-K is
January 31, 1992, among Reli Financial incorporated by reference
Corp., American Commercial Credit
Corp., and AEL Leasing Co., Inc.
(Schedules, described in the agreement,
are omitted but will be furnished
supplementally to the Commission upon
request.)

2.2 Non-Competition Agreement dated Exhibit 2 to the 1992 Form 8-K is
January 31, 1992, among General incorporated by reference
Electric Capital Corporation,
LeaseAmerica Corporation, Reli
Financial Corp., AEL Leasing Co., Inc.,
and American Commercial Credit Corp.

2.3 Agreement for Purchase and Sale of Exhibit 1 to the 1993 Form 8-K is
Stock dated June 1, 1993, between KOA incorporated by reference
Holdings, Inc. and American Commercial
Credit Corp. (Schedules and exhibits,
described in the agreement, are omitted
but will be furnished supplementally to
the Commission upon request.)

2.4 Non-Competition Agreement dated June Exhibit 2 to the 1993 Form 8-K is
1, 1993, between KOA Holdings, Inc. and incorporated by reference
American Commercial Credit Corp.

2.5 Consulting Agreement dated June 1, Exhibit 3 to the 1993 Form 8-K is
1993, between American Commercial incorporated by reference
Credit Corp. and Thomas O'Connor

4.1 Indenture dated as of July 21, 1977 Exhibit 4(c) to the 1977 Amendment is
incorporated by reference

4.2 First Supplemental Indenture Exhibit 4(a)(2) to the 1981 Amendment is
incorporated by reference

4.3 Second Supplemental Indenture Exhibit 4(a)(3) to the 1982 Amendment is
incorporated by reference
</TABLE>

<PAGE> 70

<TABLE>
<CAPTION>
Exhibit Exhibit Incorporation by Reference
No. Description (if applicable)
- ------- ----------- --------------------------
<S> <C> <C>
4.4 Third Supplemental Indenture Exhibit 4.4 to the 1983 Registration
Statement is incorporated by reference

4.5 Fourth Supplemental Indenture Exhibit 4.5.1 to the 1983 Amendment is
incorporated by reference

4.6 Fifth Supplemental Indenture Exhibit 4.7 to the 1984 Registration
Statement is incorporated by reference

4.7 Sixth Supplemental Indenture Exhibit 4.8 to the 1985 Registration
Statement is incorporated by reference

4.8 Seventh Supplemental Indenture Exhibit 4.11 to the 1986 Registration
Statement is incorporated by reference

4.9 Eighth Supplemental Indenture Exhibit 4.11 to the 1987 Registration
Statement is incorporated by reference

4.10 Ninth Supplemental Indenture Exhibit 4.12 to the 1988 Registration
Statement is incorporated by reference

4.11 Tenth Supplemental Indenture Exhibit 4.13 to the 1989 Registration
Statement is incorporated by reference

4.12 Eleventh Supplemental Indenture Exhibit 4.12 to the 1990 Registration
Statement is incorporated by reference

4.13 Twelfth Supplemental Indenture Exhibit 4.13 to the 1991 Registration
Statement is incorporated by reference

4.14 Thirteenth Supplemental Indenture Exhibit 4.14 to the 1991 Form 10-K is
incorporated by reference

4.15 Fourteenth Supplemental Indenture Exhibit 4.15 to the 1992 Registration
Statement is incorporated by reference

4.16 Fifteenth Supplemental Indenture Exhibit 4.16 to the 1993 Registration
Statement is incorporated by reference

4.17 Sixteenth Supplemental Indenture Exhibit 4.17 to the 1994 Registration
Statement is incorporated by reference

4.18 Seventeenth Supplemental Indenture Exhibit 4.19 to the 1994 Amendment is
incorported by reference

4.19 Eighteenth Supplemental Indenture Filed herewith
(including forms of 1995 Series 8,
A, B and C Subordinated Investment
Certificates being registered
hereunder)

4.20 Form of Passbook Series Subordinated Exhibit 4.16 to the 1992 Registration
Investment Certificate Statement is incorporated by reference

5 Opinion of Drinker Biddle & Reath Filed herewith

Employment agreements:
10.1 J. F. Horrigan, Jr. Exhibits 10.1 through 10.5 inclusive to
10.2 A. A. Haberberger the 1994 Form 10-K are incorporated by
10.3 W M. Horrigan reference
10.4 V. A. Faino
10.5 J. F. Horrigan, III
</TABLE>

<PAGE> 71

<TABLE>
<CAPTION>
Exhibit Exhibit Incorporation by Reference
No. Description (if applicable)
- ------- ----------- --------------------------
<S> <C> <C>
Split-Dollar Insurance
10.6 J. F. Horrigan, Jr., 11/27/85 Exhibits 10.8 and 10.9 to the 1985 Form
10.7 R. W. Horrigan, 11/27/85 10-K are incorporated bv reference

10.8 Amended and Restated Shareholders Exhibit 10.21 to the 1985 10-K is
Agreement dated as of April 16, 1985 incorporated by reference

10.9 Amendment to Exhibit 10.8 Exhibit 10.9 to the 1994 10-K is
incorporated by reference

Redemption Agreements
10.10 J. F. Horrigan, Jr. Exhibits 10.8 through 10.10 to the 1992
10.11 A. A. Haberberger Form 10-K are incorporated by reference.
10.12 W. M. Horrigan

10.13 Amendment to Exhibit 10.10 Exhibits 10.13 through 10.15
10.14 Amendment to Exhibit 10.11 to the 1994 10-K are
10.15 Amendment to Exhibit 10.12 incorporated by reference

10.16 Horrigan American, Inc. 401(k) Exhibit 10.12 to the 1993 Form 10-K is
Retirement Plan incorporated by reference

10.17 Amendment to Exhibit 10.16 Exhibit 10.17 to the 1994 10-K
is incorporated by reference

10.18 1987 Stock Option Plan Exhibit 10.20 to the 1987 Form 10-K is
incorporated by reference

10.19 Stockholders' Agreement for Outside Exhibit 10.25 to the 1985 Form 10-K is
Directors dated March 25, 1985 incorporated by reference

10.20 Amendment to Exhibit 10.19 Exhibit 10.19 to the 1994 Form 10-K is
incorporated by reference

10.21 Phantom Stock Plan Exhibit 10.15 to the 1993 Form 10-K is
incorporated by reference

11 Statement of calculation of earnings per Filed herewith
share

12 Statement of calculation of ratios of Filed herewith
earnings to fixed charges

24.1 Consent of KPMG Peat Marwick Filed herewith

Consent of Counsel Included in Exhibit 5

26 Statement of Eligibility and Qualification Filed herewith
of Tustee under the Indenture

27 Financial Data Schedule Filed herewith
</TABLE>

Item 17. Undertakings.

The undersigned registrant hereby undertakes:

(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement:

(i) To include any prospectus required by section 10(a)(3) of the
Securities Act of 1993;

<PAGE> 72

(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement;

(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the registration statement
or any material change to such information in the registration
statement;

(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.

(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.

Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the provisions described in item 15, or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the registrant
in the successful defense of any action, suit or proceeding) is asserted by
such director, officer or controlling person in connection with the securities
being registered, the registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act and will be governed by the final
adjudication of such issue.

<PAGE> 73

SIGNATURES

Pursuant to the registration requirements of the Securities Act of 1933,
the registrant has duly caused this registration statement or amendment
thereto to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Reading, and the Commonwealth of Pennsylvania on
the 20th day of March, 1995

HORRIGAN AMERICAN, INC.

By: /s/ JOHN F. HORRIGAN, JR.
--------------------------
John F. Horrigan, Jr.
Chairman

POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints John F. Horrigan, Jr., Arthur A. Haberberger,
Robert Ordway, and each of them, his or her true and lawful attorney-in-fact
and agent, with full power of substitution and resubstitution, for him or her
and in his or her name, place and stead, in any and all capacities (including
his or her capacity as a director and/or officer of Horrigan American, Inc.),
to sign any or all amendments (including post-effective amendments) to this
Registration Statement, and to file the same, with all exhibits thereto, and
other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorney-in-fact and agent, full power and
authority to do and perform each and every act and thing requisite and
necessary to be done in and about the premises, as fully to all intents and
purposes as he or she might or could do in person, hereby ratifying and
confirming all that said attorney-in-fact and agent or his or her substitute
or substitutes, may lawfully do or cause to be done by virtue hereof.

Pursuant to the rquirements of the Securities Act of 1933, this
registration statement or amendment thereto has been signed below by the
following persons in the capacities and on the dates indicated.

<TABLE>
<CAPTION>
Signatures Title Date
---------- ----- ----
<S> <C> <C>
/s/ JOHN F. HORRIGAN, JR. Chairman of the Board of Directors March 20, 1995
- --------------------------------
John F. Horrigan, Jr.

/s/ ARTHUR A. HABERBERGER President (principal executive officer) March 20, 1995
- -------------------------------- and Director
Arthur A. Haberberger

/s/ ROBERT ORDWAY Senior Vice President (principal March 20, 1995
- -------------------------------- financial and accounting officer)
Robert Ordway

/s/ RICHARD W. HORRIGAN Director March 20, 1995
- --------------------------------
Richard W. Horrigan

/s/ W. MICHAEL HORRIGAN Director March 20, 1995
- --------------------------------
W. Michael Horrigan

/s/ SIDNEY D. KLINE, JR. Director March 20, 1995
- --------------------------------
Sidney D. Kline, Jr.

/s/ JOHN A. MULLINEAUX Director March 20, 1995
- --------------------------------
John A. Mullineaux
Director
- --------------------------------
Elizabeth Horrigan Rathz

/s/ RICHARD W. HORRIGAN, JR. Director March 20, 1995
- --------------------------------
Richard W. Horrigan, Jr.

/s/ ALTHEA L. A. SKEELS Director March 20, 1995
- --------------------------------
Althea L. A. Skeels
</TABLE>

<PAGE> 74

Exhibit 4.19

EIGHTEENTH SUPPLEMENTAL INDENTURE,

dated as of April 1, 1995
to Indenture dated
July 21, 1977, between

HORRIGAN AMERICAN, INC.

and

PNC BANK, NATIONAL ASSOCIATION

<PAGE> 75

EIGHTEENTH SUPPLEMENTAL INDENTURE,

dated as of April 1, 1995
to Indenture dated
July 21, 1977, between

HORRIGAN AMERICAN, INC.
and
PNC BANK, NATIONAL ASSOCIATION

HORRIGAN AMERICAN, INC., a Pennsylvania corporation (hereinafter
called the "Company"), and PNC BANK, NATIONAL ASSOCIATION, successor trustee
under the Indenture hereinafter mentioned (hereinafter called the "Trustee"),
are parties to an Indenture dated as of July 21, 1977, as amended by a First
Supplemental Indenture dated as of May 1, 1981, by a Second Supplemental
Indenture dated as of May 1, 1982, by a Third Supplemental Indenture dated as of
December 1, 1982, by a Fourth Supplemental Indenture dated as of May 1, 1983, by
a Fifth Supplemental Indenture dated as of April 1, 1984, by a Sixth
Supplemental Indenture dated as of April 1, 1985, by a Seventh Supplemental
Indenture dated as of April 1, 1986, by an Eighth Supplemental Indenture dated
as of April 1, 1987, by a Ninth Supplemental Indenture dated as of April 1,
1988, by a Tenth Supplemental Indenture dated as of April 1, 1989, by an
Eleventh Supplemental Indenture dated as of April 1, 1990, by a Twelfth
Supplemental Indenture dated as of April 1, 1991, by a Thirteenth Supplemental
Indenture dated as of September 1, 1991, by a Fourteenth Supplemental Indenture
dated as of April 1, 1992, by a Fifteenth Supplemental Indenture dated as of
April 1, 1993, by a Sixteenth Supplemental Indenture dated as of April 1, 1994,
and by a Seventeenth Supplemental Indenture dated as of April 25, 1994 (such
Indenture, as so amended, being herein called the "Indenture"), relating to
securities of the Company known as Subordinated Investment Certificates. The
Company is successor under the Indenture to Horrigan Companies, Inc., a
Pennsylvania corporation, the original obligor under the Indenture and the
issuer of certain Subordinated Investment Certificates heretofore issued under
the Indenture.

The Company and the Trustee agree as follows, intending to be
legally bound:

Authorization of Additional Series of Debentures. The Indenture is
amended by inserting after Article XXVIII thereof the following:

ARTICLE XXIX

Additional Series of Debentures

Section 29.1. Title and Terms.

There is hereby created and there shall be issued pursuant to this
Article four series of Debentures (collectively, the "1995 Fixed Rate
Debentures") consisting of a Series of Debentures known as the Company's
"1995 Series 8 Subordinated Investment Certificates," a series of Debentures
known as the Company's "1995 Series A Subordinated Investment Certificates,"
a series of Debentures known as the Company's "1995 Series B Subordinated
Investment Certificates" and a series of Debentures known as the Company's
"1995 Series C Subordinated Investment Certificates." The Stated Maturity of
each 1995 Series 8 Subordinated Investment Certificate shall be the eighth
anniversary of the date on which it is issued (or, if earlier, the date eight
years after the date on which the first Predecessor Debenture of the Debenture
was issued). The Stated Maturity of each 1995 Series A Subordinated Investment
Certificate shall be the fourth anniversary of the date on which it is issued
(or, if earlier, the date four years after the date on which the first
Predecessor Debenture of the Debenture was issued). The Stated Maturity of
each 1995 Series B Subordinated Investment Certificate shall be the date
thirty months after the date on which it is issued (or, if earlier, the date
thirty months after the date on which the first Predecessor Debenture of the

<PAGE> 76

Debenture was issued). The Stated Maturity of each 1995 Series C Subordinated
Investment Certificate shall be the date twelve months after the date on which
it is originally issued (or, if earlier, the date twelve months after the date
on which the first Predecessor Debenture of the Debenture was issued). Each
1995 Fixed Rate Debenture shall bear interest from the date on which it is
issued, payable semi-annually on June 1 and December 1 in each year (provided,
that interest will be paid quarterly or monthly to the Holder of a 1995 Fixed
Rate Debenture in the principal amount of $10,000 or more, at the written
request of such Holder), at the rates determined in accordance with
Section 29.2.

Section 29.2. Rates of Interest; Denominations.

The 1995 Fixed Rate Debentures shall bear interest at the rates per
annum in effect at the time of issuance, determined by the Company as
hereinafter provided. The Company in its discretion shall set the rate to be
paid with respect to each series of Debentures prior to the issuance of the
first 1995 Fixed Rate Debenture. Thereafter, the Company, in its discretion, may
modify the rates on the first day of each calendar month with respect to
Debentures issued on or after that date. To establish the initial rates of
interest and each modification thereof, the Company shall (unless authentication
is not required in accordance with Section 3.3) deliver to the Trustee, prior to
the aforementioned dates, a supplemental instruction, in substantially the form
specified in Section 29.3, signed by any one of the following officers: the
Chairman, the President, or any Senior Vice President, stating the rates of
interest at which 1995 Fixed Rate Debentures are to be issued. The Trustee shall
be fully protected in relying on any such supplemental instruction. Upon receipt
of such a supplemental instruction, the Trustee shall cease to authenticate and
deliver (or, if such authentication is not required in accordance with Section
3.3 hereof, the Company shall cease to execute and deliver) 1995 Fixed Rate
Debentures of the series affected thereby bearing interest at the rate
theretofore in effect (except Debentures delivered upon transfer of, or in
exchange for, or in lieu of other Debentures pursuant to Sections 3.4, 3.5, 3.6,
9.6 or 11.8) and shall thereafter authenticate and deliver (or, if applicable,
the Company shall execute and deliver) 1995 Fixed Rate Debentures of the series
so affected bearing interest only at the rates stated in the supplemental
instruction.

The Company may modify prospectively the Stated Maturity of any series
of 1995 Fixed Rate Debentures, but no such modification shall affect the Stated
Maturity of 1995 Fixed Rate Debentures then outstanding; and upon receipt of a
Board Resolution and a Company Order authorizing and directing such a
modification, the Trustee shall cease to authenticate and deliver (or, if such
authentication is not required in accordance with Section 3.3 hereof, the
Company shall cease to execute and deliver) 1995 Fixed Rate Debentures of the
series so affected, having the Stated Maturity theretofore in effect (except
Debentures delivered upon transfer of, or in exchange for, or in lieu of other
Debentures pursuant to Sections 3.4, 3.5, 3.6, 9.6 or 11.8) and shall thereafter
authenticate and deliver (or, if applicable, the Company shall execute and
deliver) 1995 Fixed Rate Debentures of the series so affected having only the
Stated Maturity stated in accordance with the Board Resolution and Company
Order.

1995 Series 8 Debentures shall be issued in denominations of $1,000
and multiples of $100 in excess thereof. 1995 Series A Debentures shall be
issued in denominations of $1,000 and multiples of $100 in excess thereof.
1995 Series B Debentures shall be issued in denominations of $500 and
multiples of $100 in excess thereof. 1995 Series C Debentures shall be
issued in denominations of $500 and multiples of $100 in excess thereof.

<PAGE> 77

The Company may modify prospectively the authorized denominations of
unissued 1995 Fixed Rate Debentures, but no such modification shall affect the
authorized denominations of the 1995 Fixed Rate Debentures then outstanding; and
upon receipt of a Board Resolution and a Company Order authorizing and directing
such a modification, the Trustee shall cease to authenticate and deliver (or, if
no authentication is required in accordance with Section 3.3, the Company shall
cease to execute and deliver) 1995 Fixed Rate Debentures of the series so
affected in the denominations theretofore authorized (except Debentures
delivered upon transfer of, or in exchange for, or in lieu of other Debentures
pursuant to Sections 3.4, 3.5, 3.6, 9.6 or 11.8) and shall thereafter
authenticate and deliver (or, if applicable, the Company shall execute and
deliver) 1995 Fixed Rate Debentures of the series so affected only in the
authorized denominations stated in the Board Resolution and Company Order.

Section 29.3. Form of Supplemental Instruction.

The supplemental instruction to be delivered to the Trustee by the
Company pursuant to Section 29.2 shall be in substantially the following form:

HORRIGAN AMERICAN, INC.

Supplemental Instruction

To: PNC Bank, National Association (the "Trustee"), successor
trustee under the Indenture dated July 21, 1977, as amended by all
indentures supplemental thereto, including the Eighteenth
Supplemental Indenture dated as of April 1, 1995 (collectively the
"Indenture"), between Horrigan American, Inc. (the "Company") and
the Trustee.

Pursuant to section 29.2 of the Indenture, the Trustee is
instructed that until delivery of a further supplemental instruction the rate
of interest on the Company's 1995 (specify series) Subordinated Investment
Certificates from and after , 19 , is %.

Dated: , 19 HORRIGAN AMERICAN, INC.

By xxxxxxxxxxxxxxxxxxxxx
-------------------------

Title
-----------------------

Section 29.4 Redemption.

(a) At Election of the Company. The Company at its election may at any
time and from time to time redeem 1995 Fixed Rate Debentures, as a whole or in
part, at a Redemption Price equal to 100% of their principal amount plus accrued
interest to the Redemption Date (but interest installments whose Stated Maturity
is on or prior to the Redemption Date shall be payable to the Holders of such
1995 Fixed Rate Debentures, or one or more Predecessor Debentures, of record at
the close of business on the relevant Record Dates according to their terms and
the provisions of Section 3.7). Any such redemption shall be made in accordance
with the provisions of Sections 11.3 through 11.8.

<PAGE> 78

(b) Upon Death of Holder. The Company will, at the request
of the person or persons entitled to payment, redeem any 1995 Fixed Rate
Debenture at a Redemption Price equal to 100% of its principal amount plus
accrued interest, at any time after 30 days following the date on which it is
issued (or, if earlier, after 30 days following the date on which the first
Predecessor Debenture of the Debenture was issued) upon the death of the
Holder thereof (or, if there is more than one Holder, upon the death of any
of them). Any request to the Company to redeem a 1995 Fixed Rate Debenture
under this subsection must be received by the Company within one year
following the date of death. The Company may require satisfactory proof of
death and of other matters affecting the right of the person requesting
payment and may require up to 30 days' written notice of such person's
intention to effect the redemption.

(c) Prospective Modification of Redemption Provisions. The
Company may modify prospectively the provisions of subsection (b) and may
provide prospectively for redemption of the 1995 Fixed Rate Debentures at the
election of the Holders thereof, but no such modification or provision shall
affect redemption rights with respect to 1995 Fixed Rate Debentures then
outstanding; and upon receipt of a Board Resolution and a Company Order
authorizing and directing such a modification or provision, the Trustee shall
cease to authenticate and deliver (or, if no authentication is required in
accordance with Section 3.3, the Company shall cease to execute and deliver)
1995 Fixed Rate Debentures of the series so affected having the redemption
rights theretofore in effect (except Debentures delivered upon transfer of, or
in exchange for, or in lieu of other Debentures pursuant to Sections 3.4, 3.5,
3.6, 9.6 or 11.8) and shall thereafter authenticate and deliver (or the Company
shall execute and deliver) 1995 Fixed Rate Debentures of the series so affected
having only the redemption rights stated in the Board Resolution and Company
Order. Section 28.5. Automatic Renewal.

At the Stated Maturity of a 1995 Fixed Rate Debenture, unless the
Holder or the Company otherwise elects in the manner hereinafter provided, the
Company will issue (in the manner hereinafter provided) to the Holder of such
1995 Fixed Rate Debenture, in payment thereof, a fixed rate subordinated
investment certificate (the "Renewal Debenture") in the same principal amount as
the matured Debenture, of the series then being offered with the same term to
maturity as such 1995 Fixed Rate Debenture. The Renewal Debenture shall bear
interest at the rate then borne by newly issued Debentures of that series, and
shall otherwise have the same terms and conditions as such series.

The Company shall send to the Holder of a 1995 Fixed Rate Debenture
written notice of the proposed issuance of the Renewal Debenture at least 15
days before the Stated Maturity of the 1995 Fixed Rate Debenture. The
Company will also send to the Holder written notice of the interest rate per
annum to be paid on the Renewal Debenture on approximately the first day of
the month in which the Holder's 1995 Fixed Rate Debenture matures. The
Holder may elect not to have a Renewal Debenture issued to him by presenting
the 1995 Fixed Rate Debenture for payment, in the manner provided in the 1995
Fixed Rate Debenture and in this Indenture, at the Stated Maturity date or
within ten days thereafter, in which case interest will be paid only to the
Stated Maturity date. If a maturing 1995 Fixed Rate Debenture is not
presented within that time, it will not thereafter be redeemable by the
Holder before the Stated Maturity of the Renewal Debenture, except to the
extent, at the Redemption Price and in the manner provided in the provisions
of this Indenture (or of another indenture) creating the series of Debentures
of which the Renewal Debenture is a part.

<PAGE> 79

Promptly after the expiration of ten days following the Stated
Maturity of a 1995 Fixed Rate Debenture, unless the Holder thereof shall have
presented the 1995 Fixed Rate Debenture for payment as provided above, the
Company will prepare and the Trustee will authenticate and deliver to the
Holder a confirmation showing the Stated Maturity date and interest rate per
annum of the Renewal Debenture; provided, however, that confirmations may be
prepared and delivered by the Company without authentication by the Trustee
if such confirmations are manually executed on behalf of the Company by its
Chairman, President, Treasurer or any one of its Vice Presidents. The
Company's obligation under a newly issued Renewal Debenture will be
represented by the 1995 Fixed Rate Debenture and by the current confirmation.

The Company may elect not to issue a Renewal Debenture in payment
of a maturing 1995 Fixed Rate Debenture by delivering notice to that effect
to the Holder at least 15 days before the Stated Maturity date.

Section 29.6. Form of 1995 Series 8 Subordinated Investment
Certificate.

Subject to the provisions of Section 2.1, the 1995 Series 8
Subordinated Investment Certificates shall be in substantially the following
form, with such appropriate insertions, omissions, substitutions and other
variations as are required or permitted by this Indenture:

HORRIGAN AMERICAN, INC.

% 1995 Series 8 Subordinated Investment Certificate
------

Due
--------------------

No. $
--------------------------- -------------------

Date of this Certificate Date of Original Issuance
------------- -------------

Issued pursuant to the Indenture hereinafter mentioned and the
Supplemental Indenture dated as of April 1, 1995 (hereinafter
collectively referred to as the "Indenture").

HORRIGAN AMERICAN, INC., a Pennsylvania corporation
(hereinafter called the "Company," which term includes any
successor corporation under the Indenture hereinafter referred to),
for value received, hereby promises to pay to
, or registered assigns, eight years after
the Date of Original Issuance shown hereon, the sum of
Dollars and to pay interest thereon from the date
hereof semi-annually on June 1 and December 1 in each year
(provided that if the principal amount of this Certificate is
$10,000 or more, interest will be paid quarterly or monthly to the
Holder upon his written request), at the rate set forth elsewhere
hereon, calculated on the basis of a year of 360 days composed of
twelve months of 30 days each, until the principal hereof is paid
or made available for payment.

<PAGE> 80

Payment of the principal of and interest on this Certificate will
be made at the office of the Company in Reading, Pennsylvania, and at
such other locations as the Company may designate from time to time,
provided that the Company may, at its option, make payments of
interest or principal by check or draft mailed by first class mail to
the registered Holder at his address appearing in the Certificate
Register.

The Company may at any time, at its election, redeem this
Certificate as a whole or in part, at a Redemption Price equal to
100% of the principal amount redeemed plus accrued interest thereon
to the Redemption Date, all as more fully provided in the
Indenture.

As more fully provided in the Indenture, the Company will, at
the request of the person or persons entitled to payment, redeem
this Certificate at 100% of its principal amount plus accrued
interest, at any time after 30 days following the Date of Original
Issuance shown hereon, upon the death of the Holder (or, if there
is more than one Holder, upon the death of any of them). Any
request to the Company to redeem this Certificate in such
circumstances must be received by the Company within one year
following the date of death. The Company may require satisfactory
proof of death and of other matters affecting the right of the
person requesting payment, and may require up to 30 days' written
notice of such person's intention to effect the redemption.

The Indenture provides that the Company may prospectively
modify the terms of unissued Certificates of this series to permit
the redemption thereof at the election of the Holder, but no such
modification shall affect previously issued Certificates.

As more fully provided in the Indenture, unless the Holder or
the Company otherwise elects, the Company will, at maturity of this
Certificate, issue to the Holder hereof, in payment of this
Certificate, a new subordinated investment certificate in the same
principal amount as this Certificate (the "Renewal Certificate") of
the series then being offered with the same term as this
Certificate. Such issuance will be accomplished by the issuance
and delivery of a confirmation stating the maturity and interest
rate per annum of the subordinated investment certificate so
issued, as provided in the Indenture. The Renewal Certificate
shall bear interest at the then existing rate per annum for newly
issued certificates of that series, and shall otherwise have the
same terms and conditions as such series. The Company shall send
to the Holder of this Certificate written notice of the proposed
issuance of the Renewal Certificate, at least 15 days before the
maturity of this Certificate. The Company shall also send to the
Holder of this Certificate written notice of the interest rate per
annum to be paid on the Renewal Certificate on approximately the
first day of the month in which this Certificate matures. The
Holder may elect not to have a Renewal Certificate issued to him by
presenting this Certificate for payment, in the manner provided
herein and in the Indenture, at its maturity or within ten days
thereafter, in which case this Certificate will bear interest only
to its maturity. The Company may elect not to issue a Renewal
Certificate in payment of this Certificate by sending notice to
that effect to the Holder approximately 15 days before maturity of
this Certificate.

All payments of principal of and interest on this Certificate
shall be made in such coin or currency of the United States of
America as at the time of payment is legal tender for payment of
public and private debts.

<PAGE> 81

This Certificate is one of a duly authorized issue of the
"Subordinated Investment Certificates" (herein called the
"Certificates") of the Company, issued and to be issued under an
Indenture dated July 21, 1977, the Supplemental Indenture identified
elsewhere hereon and all other indentures supplemental thereto (herein
collectively called the "Indenture"), between the Company and PNC
Bank, National Association, as Trustee (herein called the
"Trustee," which term includes any successor Trustee under the
Indenture), to which Indenture and all indentures supplemental thereto
reference is hereby made for a statement of the respective rights
thereunder of the Company, the Trustee and the Holders of the
Certificates, and the terms upon which the Certificates are, and are
to be, authenticated and delivered. As provided in the Indenture, the
Certificates are issuable in one or more series which may vary as in
the Indenture provided or permitted. This Certificate is one of a
series bearing the designation shown elsewhere hereon. The rate of
interest on, and the Stated Maturity of, unissued Certificates of this
series available to be issued may be modified prospectively by the
Company, but no such modification shall affect previously issued
Certificates.

The indebtedness evidenced by the Certificates is, to the
extent set forth in certain provisions of the Indenture, expressly
subordinated and subject in right of payment to the prior payment
in full of all Senior Debt as defined in the Indenture, and this
Certificate is issued subject to such provisions. Each Holder of
this Certificate, by accepting the same, agrees to and shall be
bound by such provisions and authorizes and directs the Trustee in
his behalf to take such action as may be necessary or appropriate
to acknowledge or effectuate the subordination as provided in the
Indenture, and appoints the Trustee his attorney-in-fact for any
and all such purposes.

If an Event of Default, as defined in the Indenture, shall
occur, the principal of all the Certificates may be declared due
and payable in the manner and with the effect provided in the
Indenture.

The Indenture permits, with certain exceptions as therein
provided, the amendment thereof and the modification of the rights
and obligations of the Company and the rights of the Holders of the
Certificates under the Indenture at any time by the Company with
the consent of the holders of a majority in aggregate principal
amount of the Certificates at the time Outstanding, as defined in
the Indenture. The Indenture also contains provisions permitting
the Holders of a majority in aggregate principal amount of the
Certificates at the time Outstanding, as defined in the Indenture,
on behalf of the Holders of all the Certificates, to waive
compliance by the Company with certain provisions of the Indenture
and certain past defaults under the Indenture and their
consequences. Any such consent or waiver by the Holder of this
Certificate shall be conclusive and binding upon such Holder and
upon all future Holders of this Certificate and of any Certificate
issued upon the transfer hereof or in exchange herefor or in lieu
hereof, whether or not notation of such consent or waiver is made
upon this Certificate.

No reference herein to the Indenture and no provisions of this
Certificate or of the Indenture shall alter or impair the
obligation of the Company, which is absolute and unconditional, to
pay the principal of and interest on this Certificate at the times,
place and rate, and in the coin or currency, herein prescribed.

<PAGE> 82

As provided in the Indenture and subject to certain
limitations therein set forth, this Certificate is transferable on
the Certificate Register of the Company, upon surrender of this
Certificate for transfer at the office or agency of the Company in
Reading, Pennsylvania, and at such other locations as the Company
may designate from time to time, duly endorsed by, or accompanied
by a written instrument of transfer in form satisfactory to the
Company and the Certificate Registrar duly executed by, the
registered Holder hereof or his attorney duly authorized in
writing, and thereupon one or more new Certificates of this series,
of authorized denominations and for the same aggregate principal
amount, bearing the same interest rate and with the same Stated
Maturity, will be issued to the designated transferee or
transferees. Any new Certificate issued upon transfer will be
dated as of the last date to which interest has been paid or duly
provided for in respect of the Certificate surrendered by the
transferor; provided, however, that in the case of any Certificate
surrendered for transfer after a Regular or Special Record Date but
before the interest payment date to which it relates, the transfer
shall be effected as of, and the new Certificate shall be dated the
date of, the interest payment date to which such Record Date
relates.

Interest punctually paid or duly provided for on any Interest
Payment Date will, as provided in the Indenture, be paid to the
Person in whose name this Certificate (or one or more Predecessor
Certificates as defined in the Indenture) is registered at the
close of business on the Regular Record Date for such interest
which shall be the 20th day (whether or not a business day) of the
calendar month next preceding such Interest Payment Date. Any such
interest not so punctually paid or duly provided for shall
forthwith cease to be payable to the registered Holder on such
Regular Record Date, and may be paid to the Person in whose name
this Certificate (or one or more Predecessor Certificates) is
registered at the close of business on a Special Record Date for
the payment of such defaulted interest to be fixed by the Company,
notice whereof shall be given to Certificate Holders not less than
10 days prior to such Special Record Date, or may be paid at any
time in any other lawful manner, all as more fully provided in the
Indenture.

The Certificates of this series are issuable only as
registered Certificates without coupons in the denominations
authorized by or in the manner provided in the Indenture. As
provided in the Indenture and subject to certain limitations
therein set forth, Certificates of this series are exchangeable for
a like aggregate principal amount of Certificates of this series of
a different authorized denomination, as requested by the Holder
surrendering the same. No service charge will be made for any such
transfer or exchange, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge payable in
connection therewith. The Indenture provides that the Company may
prospectively modify the authorized denominations of Certificates
of this series, but no such modification shall affect previously
issued Certificates.

The Company undertakes to pay on behalf of the Holder hereof
any Pennsylvania corporate loans tax (not in excess of the amount
of such tax calculated on the basis of the rates in effect as of
the date of the Indenture) which is or shall be payable in respect
of the obligation evidenced by this Certificate.

<PAGE> 83

The Company, the Trustee and any agent of the Company or the
Trustee may treat the Person in whose name this Certificate is
registered as the owner hereof for the purpose of receiving payment
as herein provided and for all other purposes whether or not this
Certificate be overdue, and neither the Company, the Trustee nor
any such agent shall be affected by notice to the contrary.

Unless this Certificate has been executed by the manual or
facsimile signature of an officer of the Company and attested by
the manual signature of the Secretary or an Assistant Secretary of
the Company, this Certificate shall not be entitled to any benefit
under the Indenture, or be valid or obligatory for any purpose.

(Unless the certificate of authentication hereon has been
executed by the Trustee by manual signature, this Certificate shall
not be entitled to any benefit under the Indenture, or be valid or
obligatory for any purpose.*)

IN WITNESS WHEREOF, the Company has caused this Certificate to
be duly executed under its corporate seal.

HORRIGAN AMERICAN, INC.

Attest:

xxxxxxxxxxxxxxxxxxx By xxxxxxxxxxxxxxxxxxxxx
- ------------------------- -------------------------
Secretary/Asst. Secretary (title)

* To be included only if the Certificates are required to be authenticated
by the Trustee under Section 3.3 of the Indenture.

29.7. Form of 1995 Series A Subordinated Investment Certificate.

Subject to the provisions of Section 2.1, the 1995 Series A
Subordinated Investment Certificates shall be in substantially the following
form, with such appropriate insertions, omissions, substitutions and other
variations as are required or permitted by this Indenture:

HORRIGAN AMERICAN, INC.

% 1995 Series A Subordinated Investment Certificate
------

Due
-----------------

No. $
--------------------- ------------------------

Date of this Certificate Date of Original Issuance
-------- ---------

Issued pursuant to the Indenture hereinafter mentioned and the
Supplemental Indenture dated as of April 1, 1995 (hereinafter
collectively referred to as the "Indenture").

<PAGE> 84

HORRIGAN AMERICAN, INC., a Pennsylvania corporation
(hereinafter called the "Company," which term includes any
successor corporation under the Indenture hereinafter referred to),
for value received, hereby promises to pay to
, or registered assigns, four years after the
Date of Original Issuance shown hereon, the sum of
Dollars and to pay interest thereon from the date hereof semi-
annually on June 1 and December 1 in each year (provided that if
the principal amount of this Certificate is $10,000 or more,
interest will be paid quarterly or monthly to the Holder upon his
written request), at the rate set forth elsewhere hereon,
calculated on the basis of a year of 360 days composed of twelve
months of 30 days each, until the principal hereof is paid or made
available for payment.

<PAGE> 85

maturity of this Certificate. The Company shall also send to the
Holder of this Certificate written notice of the interest rate per
annum to be paid on the Renewal Certificate on approximately the
first day of the month in which this Certificate matures. The
Holder may elect not to have a Renewal Certificate issued to him by
presenting this Certificate for payment, in the manner provided
herein and in the Indenture, at its maturity or within ten days
thereafter, in which case this Certificate will bear interest only
to its maturity. The Company may elect not to issue a Renewal
Certificate in payment of this Certificate by sending notice to
that effect to the Holder approximately 15 days before maturity of
this Certificate.

If an Event of Default, as defined in the Indenture, shall
occur, the principal of all the Certificates may be declared due
and payable in the manner and with the effect provided in the
Indenture.

<PAGE> 86

<PAGE> 87

IN WITNESS WHEREOF, the Company has caused this Certificate to
be duly executed under its corporate seal.

HORRIGAN AMERICAN, INC.

Attest:

xxxxxxxxxxxxxxxxxxx By xxxxxxxxxxxxxxxxxxxxx
- ------------------------- --------------------------
Secretary/Asst. Secretary (title)

- -----------
* To be included only if the Certificates are required to be authenticated
by the Trustee under Section 3.3 of the Indenture.

<PAGE> 88

Section 29.8. Form of 1995 Series B Subordinated Investment
Certificate.

Subject to the provisions of Section 2.1, the 1995 Series B
Subordinated Investment Certificates shall be in substantially
the following form, with such appropriate insertions, omissions,
substitutions and other variations as are required or permitted by this
Indenture:

HORRIGAN AMERICAN, INC.

% 1995 Series B Subordinated Investment Certificate
------
Due
-----------------
No. $
----------------- --------------------

Date of this Certificate Date of Original Issuance
------------ ------------

Issued pursuant to the Indenture hereinafter mentioned and the
Supplemental Indenture dated as of April 1, 1995 (hereinafter
collectively referred to as the "Indenture").

HORRIGAN AMERICAN, INC., a Pennsylvania corporation
(hereinafter called the "Company," which term includes any
successor corporation under the Indenture hereinafter referred to),
for value received, hereby promises to pay to
, or registered assigns, thirty (30)
months after the Date of Original Issuance shown hereon, the sum of
Dollars and to pay interest thereon from the date
hereof semi-annually on June 1 and December 1 in each year
(provided that if the principal amount of this Certificate is
$10,000 or more, interest will be paid quarterly or monthly to the
Holder upon his written request), at the rate set forth elsewhere
hereon, calculated on the basis of a year of 360 days composed of
twelve months of 30 days each, until the principal hereof is paid
or made available for payment.

<PAGE> 89

This Certificate is one of a duly authorized issue of the
"Subordinated Investment Certificates" (herein called the
"Certificates") of the Company, issued and to be issued under an
Indenture dated July 21, 1977, the Supplemental Indenture identified
elsewhere hereon and all other indentures supplemental thereto (herein
collectively called the "Indenture"), between the Company and PNC
Bank, National Association, as Trustee (herein called the "Trustee,"
which term includes any successor Trustee under the Indenture), to
which Indenture and all indentures supplemental thereto reference is
hereby made for a statement of the respective rights thereunder of the
Company, the Trustee and the Holders of the Certificates, and the
terms upon which the Certificates are, and are to be, authenticated
and delivered. As provided in the Indenture, the Certificates are
issuable in one or more series which may vary as in the Indenture
provided or permitted. This Certificate is one of a series bearing the
designation indicated elsewhere hereon. The rate of interest on, and
the Stated Maturity of, unissued Certificates of this series available
to be issued may be modified prospectively by the Company, but no such
modification shall affect previously issued Certificates.

<PAGE> 90

If an Event of Default, as defined in the Indenture, shall
occur, the principal of all the Certificates may be declared due
and payable in the manner and with the effect provided in the
Indenture.

The Indenture permits, with certain exceptions as therein
provided, the amendment thereof and the modification of the rights
and obligations of the Company and the rights of the Holders of the
Certificates under the Indenture at any time by the Company with
the consent of the holders of a majority in aggregate principal
amount of the Certificates at the time Outstanding, as defined in
the Indenture. The Indenture also contains provisions permitting
the Holders of a majority in aggregate principal amount of the
Certificates at the time Outstanding, as defined in the Indenture,
on behalf of the holders of all the Certificates, to waive
compliance by the Company with certain provisions of the Indenture
and certain past defaults under the Indenture and their
consequences. Any such consent or waiver by the Holder of this
Certificate shall be conclusive and binding upon such Holder and
upon all future Holders of this Certificate and of any Certificate
issued upon the transfer hereof or in exchange herefor or in lieu
hereof, whether or not notation of such consent or waiver is made
upon this Certificate.

As provided in the Indenture and subject to certain
limitations therein set forth, this Certificate is transferable on
the Certificate Register of the Company, upon surrender of this
Certificate for transfer at the office or agency of the Company in
Reading, Pennsylvania, and at such other locations as the Company
may designate from time to time, duly endorsed by, or accompanied
by a written instrument of transfer in form satisfactory to the
Company and the Certificate Registrar duly executed by, the
registered Holder hereof or his attorney duly authorized in
writing, and thereupon one or more new Certificates of this series,
of authorized denominations and for the same aggregate principal
amount, bearing the same interest rate and with the same Stated
Maturity, will be issued to the designated transferee or
transferees. Any new Certificate issued upon transfer will be
dated as of the last date to which interest has been paid or duly
provided for in respect of the Certificate surrendered by the
transferor; provided, however, that in the case of any Certificate
surrendered for transfer after a Regular or Special Record Date but
before the interest payment date to which it relates, the transfer
shall be effected as of, the interest payment date to which such
Record Date relates.

<PAGE> 91

<PAGE> 92

(Unless the certificate of authentication hereon has been
executed by the Trustee by manual signature this Certificate shall
not be entitled to any benefit under the Indenture, or be valid or
obligatory for any purpose.*)

IN WITNESS WHEREOF, the Company has caused this Certificate to
be duly executed under its corporate seal.

HORRIGAN AMERICAN, INC.

Attest:

xxxxxxxxxxxxxxxxxxx By xxxxxxxxxxxxxxxxxxxxx
- ------------------------- -------------------------
Secretary/Asst. Secretary (title)

- -------------
* To be included only if the Certificates are required to be authenticated
by the Trustee under Section 3.3 of the Indenture.

Section 29.9 Form of 1995 Series C Subordinated Investment
Certificates.

Subject to the provisions of Section 2.1, the 1995 Series C
Subordinated Investment Certificates shall be in substantially the following
form, with such appropriate insertions, omissions, substitutions or other
variations as are required or permitted by this Indenture:

HORRIGAN AMERICAN, INC.

% 1995 Series C Subordinated Investment Certificate
-------

Due
----------------------------

No. $
---------------------- ------------------------

Date of this Certificate Date of Original Issuance
------------- -------------

Issued pursuant to the Indenture hereinafter mentioned and the
Supplemental Indenture dated as of April 1, 1995 (hereinafter
collectively referred to as the "Indenture").

HORRIGAN AMERICAN, INC., a Pennsylvania corporation
(hereinafter called the "Company," which term includes any
successor corporation under the Indenture hereinafter referred to),
for value received, hereby promises to pay to
, or registered assigns, twelve (12)
months after the date of Original Issuance shown hereon, the sum of
Dollars and to pay interest thereon from the date
hereof semi-annually on June 1 and December 1 in each year
(provided that if the principal amount of this Certificate is
$10,000 or more, interest will be paid quarterly or monthly to the
Holder upon his written request), at the rate set forth elsewhere
hereon, calculated on the basis of a year of 360 days composed of
twelve months of 30 days each, until the principal hereof is paid
or made available for payment.

<PAGE> 93

The Indenture provides that the Company may prospectively
modify the terms of the unissued Certificates of this series to
permit the redemption thereof at the election of the Holder, but no
such modification shall affect previously issued Certificates.

<PAGE> 94

This Certificate is one of a duly authorized issue of the
"Subordinated Investment Certificates" (herein called the
"Certificates") of the Company, issued and to be issued under an
Indenture dated July 21, 1977, the Supplemental Indenture
identified elsewhere hereon and all other indentures supplemental
thereto (herein collectively called the "Indenture"), between the
Company and PNC Bank, National Association, as Trustee
(herein called the "Trustee," which term includes any successor
Trustee under the Indenture), to which Indenture and all indentures
supplemental thereto reference is hereby made for a statement of
the respective rights thereunder of the Company, the terms upon
which the Certificates are, and are to be, authenticated and
delivered. As provided in the Indenture, the Certificates are
issuable in one or more series which may vary as in the Indenture
provided or permitted. This Certificate is one of a series bearing
the designation indicated elsewhere hereon. The rate of interest
on, and the Stated Maturity of, unissued Certificates of this
series available to be issued may be modified prospectively by the
Company, but no such modification shall affect previously issued
Certificates.

If an Event of Default, as defined in the Indenture, shall
occur, the principal of all the Certificates may be declared due
and payable in the manner and with the effect provided in the
Indenture.

No reference herein to the Indenture and no provision of this
Certificate or of the Indenture shall alter or impair the
obligation of the Company, which is absolute and unconditional, to
pay the principal of and interest on this Certificate at the times,
place and rate, and in the coin or currency, herein prescribed.

<PAGE> 95

As provided in the Indenture and subject to certain
limitations therein set forth, this Certificate is transferable on
the Certificate Register of the Company, upon surrender of this
Certificate for transfer at the office or agency of the Company in
Reading, Pennsylvania, and at such other locations as the Company
may designate from time to time, duly endorsed by, or accompanied
by a written instrument of transfer in form satisfactory to the
Company and the Certificate Registrar duly executed by, the
registered Holder hereof or his attorney duly authorized in
writing, and thereupon one or more new Certificates of this series,
of authorized denominations and for the same aggregate principal
amount, bearing the same interest rate and with the same Stated
Maturity, will be issued to the designated transferee or
transferees. Any new Certificate issued upon transfer will be
dated as of the last date to which interest has been paid or duly
provided for in respect of the Certificate surrendered by the
transfer; provided, however, that in the case of any Certificate
surrendered for transfer after a Regular or Special Record Date but
before the interest payment date to which it relates, the transfer
shall be effected as of, and the new Certificate shall be dated the
date of, the interest payment date to which such Record Date
relates.

The Certificates of this series are issuable only as
registered Certificates without coupons in the denominations
authorized by or in the manner provided in the Indenture. As
provided in the Indenture and subject to certain limitations
therein set forth, Certificates of this series are exchangeable for
a like aggregate principal amount of Certificates this series of a
different authorized denomination, as requested by the Holder
surrendering the same. No service charge will be made for any such
transfer or exchange, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge payable in
connection therewith. The Indenture provides that the Company may
prospectively modify the authorized denominations of the
Certificates of this series, but no such modification shall affect
previously issued Certificates.

<PAGE> 96

IN WITNESS WHEREOF, the Company has caused this Certificate to
be duly executed under its corporate seal.

HORRIGAN AMERICAN, INC.

Attest:

xxxxxxxxxxxxxxxxxxx By xxxxxxxxxxxxxxxxxxxxx
- ------------------------- ----------------------------
Secretary/Asst. Secretary (title)

- -----------
* To be included only if the Certificates are required to be authenticated
by the Trustee under Section 3.3 of the Indenture.

Section 29.10. Trustee's Certificate of Authentication.

(a) The Trustee's certificate of authentication for the 1995
Series 8 Subordinated Investment Certificates, if required in accordance with
Section 3.3, shall be in the following form:

This is one of the 1995 Series 8 Subordinated Investment
Certificates referred to in the within-mentioned Indenture.

FIRST EASTERN BANK, NATIONAL
ASSOCIATION, as Trustee

By xxxxxxxxxxxxxxxxxxxxx
-------------------------
Authorized Officer

(b) The Trustee's certificate of authentication for the 1995 Series A
Subordinated Investment Certificates, if required in accordance with Section
3.3, shall be in the following form:

This is one of the 1995 Series A Subordinated Investment
Certificates referred to in the within-mentioned Indenture.

FIRST EASTERN BANK, NATIONAL
ASSOCIATION, as Trustee

By xxxxxxxxxxxxxxxxxxxxx
-------------------------
Authorized Officer
<PAGE> 97

(c) The Trustee's certificate of authentication for the 1995 Series B
Subordinated Investment Certificates, if required in accordance with Section
3.3, shall be in the following form:

This is one of the 1995 Series B Subordinated Investment
Certificates referred to in the within-mentioned Indenture.

FIRST EASTERN BANK, NATIONAL
ASSOCIATION, as Trustee

By xxxxxxxxxxxxxxxxxxxxx
--------------------------
Authorized Officer

(d) The Trustee's certificate of authentication for the 1995 Series C
Subordinated Investment Certificates, if required in accordance with Section
3.3, shall be in the following form:

This is one of the 1995 Series C Subordinated Investment
Certificates referred to in the within-mentioned Indenture.

FIRST EASTERN BANK, NATIONAL
ASSOCIATION, as Trustee

By xxxxxxxxxxxxxxxxxxxxx
--------------------------
Authorized Officer

* * *

This instrument may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.

IN WITNESS WHEREOF, the parties hereto have caused this
Supplemental Indenture to be duly executed as of the date and year first
above written.

HORRIGAN AMERICAN, INC.

Attest:

/s/ JOANNE HABERBERGER By /s/ JOHN F. HORRIGAN, JR.
- ------------------------ --------------------------
Joanne Haberberger, John F. Horrigan, Jr.,
Secretary Chairman

PNC BANK, NATIONAL
ASSOCIATION, as Trustee

By /s/ LILLIAN COHEN
--------------------------
Lillian Cohen,
Authorized Officer

<PAGE> 98

Exhibit 5

DRINKER BIDDLE & REATH
Philadelphia National Bank Building
1345 Chestnut Street
Philadelphia, PA 19107-3496

March 20, 1995

Horrigan American, Inc.
P.O. Box 13428
Reading, Pennsylvania 19612

Ladies and Gentlemen:

We have acted as special counsel for Horrigan American, Inc. (the
"Company") in connection with the corporate and other proceedings related
to the authorization and execution of the Eighteenth Supplemental Indenture
dated as of April 1, 1995 (the "Supplemental Indenture"), to the Indenture
dated as of July 21, 1977 (collectively with its amendments and supplements
hereinafter called the "Indenture"), between the Company and PNC Bank,
National Association (the "Trustee"), successor trustee; the proposed
issuance by the Company of up to $25,000,000 principal amount of 1995
Series 8, 1995 Series A, 1995 Series B, 1995 Series C and Passbook Series
Subordinated Investment Certificates (collectively, the "Certificates");
and the registration of the Certificates under the Securities Act of 1933
pursuant to a registration statement on Form S-2 filed with the Securities
and Exchange Commission on the date hereof (the "Registration Statement").
In this capacity, we have examined the Indenture, including the
Supplemental Indenture and the forms of the Certificates included therein,
the form of the Passbook Series Certificates, the Articles of Incorporation
and By-Laws of the Company, resolutions adopted by the board of directors
of the Company, and such other records of the Company's corporate
proceedings as we have deemed appropriate for purposes of this opinion.

Based upon the foregoing, it is our opinion that:

1. The execution and delivery of the Supplemental Indenture has
been authorized by all necessary corporate action on the part of the
Company, and the Indenture constitutes the valid, legal, and binding
obligation of the Company, enforceable against it in accordance with
its terms, subject to equitable principles and to bankruptcy, insolvency
or other laws affecting creditors' rights generally.

2. The issuance of the Certificates has been duly authorized by
all necessary corporate action on the part of the Company.

3. When executed by authorized officers of the Company,
authenticated (if required by the Indenture) by the Trustee, and
delivered for the consideration contemplated by the Registration
Statement, all in conformity with the provisions of the Indenture, the
Certificates will be legally issued and binding obligations of the
Company, enforceable against it in accordance with their terms and the
terms of the Indenture, subject to equitable principles and to
bankruptcy, insolvency, and other laws affecting creditors' rights
generally.

We consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to our firm under the caption
"Legal Matters" in the prospectus included in the Registration Statement.
However, this does not constitute a consent under Section 7 of the
Securities Act of 1933, because in consenting to the reference to our firm
under such heading we have not certified any part of the Registration
Statement and do not otherwise come within the categories of persons whose
consent is required under Section 7 or under the rules and regulations of
the Securities and Exchange Commission thereunder.

Yours very truly,

DRINKER BIDDLE & REATH

<PAGE> 99

Exhibit 11

Horrigan American, Inc. and Subsidiaries

STATEMENT OF COMPUTATION OF PER SHARE EARNINGS (LOSS)

<TABLE>
<CAPTION>
Year Ended December 31,
--------------------------------------------------------------
1994 1993 1992 1991 1990
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
SCHEDULE OF COMMON SHARES OUTSTANDING
Number of common shares outstanding at January l ........ 3,111,766 3,300,298 3,323,055 3,339,761 3,360,096
Common shares issued .................................... 16,496 12,034 16,521 12,792 24,400
Treasury stock acquired, net ............................ (1,500) (200,566) (39,278) (29,498) (44,735)
--------- --------- --------- --------- ---------
Number of common shares outstanding at December 31 ...... 3,126,762 3,111,766 3,300,298 3,323,055 3,339,761
========= ========= ========= ========= =========
Weighted average number of common shares
outstanding (see note 1, to selected financial data).... 3,120,916 3,278,159 3,310,584 3,328,109 3,361,468
========= ========= ========= ========= =========
SCHEDULE OF NET EARNINGS APPLICABLE TO
COMMON SHARES (in thousands of dollars, except per share data)
Earnings (loss) from continuing operations.............. $3,688 $3,047 $(413) $1,382 $1,218
Cash dividends declared on preferred stock.............. (8) (16) (16) (16) (16)
--------- --------- --------- --------- ---------
Earnings (loss) from continuing operations applicable to
common shares.......................................... $3,680 $3,031 $(429) $1,366 $1,202
========= ========= ========= ========= =========
Earnings (loss) from continuing operations per common
share(1)............................................... $1.18 $ .92 $(.13) $ .41 $ .36
========= ========= ========= ========= =========
</TABLE>
- ----------
(1) Earnings (loss) per common share is the same on both a primary and fully
diluted basis.

<PAGE> 100

Exhibit 12

Horrigan American, Inc. and Subsidiaries

STATEMENT OF COMPUTATION OF RATIOS OF EARNINGS TO FIXED CHARGES
<TABLE>
<CAPTION>
Year Ended December 31,
------------------------------------------------------------
1994 1993 1992 1991 1990
---- ---- ---- ---- ----
(In thousands of dollars)
<S> <C> <C> <C> <C> <C>
Earnings (loss) from continuing operations before income taxes
and after deducting minority interest....................... $ 6,190 $ 4,947 $ (269) $ 2,270 $ 1,959

Add fixed charges
Interest ................................................... 9,821 9,028 11,250 12,879 13,773
Portion of rents representative of the interest factor ..... 209 162 194 174 180
-------- -------- -------- -------- --------
Total fixed charges ...................................... 10,030 9,190 11,444 13,053 13,953
-------- -------- -------- -------- --------
Total earnings as adjusted ............................... $16,220 $14,137 $11,175 $ 15,323 $ 15,912
======== ======== ======== ======== ========
Ratio of earnings to fixed charges ........................... 1.62 1.54 .98 1.17 1.14
======== ======== ======== ======== ========
</TABLE>

The Company guaranteed $2,253,000 of debt of unconsolidated real estate
partnerships as of December 31, 1994. The amount of fixed charges associated
with this guaranteed debt was $205,000 for 1994. The computation of the ratio of
earnings to fixed charges does not include the fixed charges associated with the
guaranteed debt because the Company has not been required to honor the
guarantees nor is it probable that the Company will be required to honor the
guarantees.

In 1992, earnings from continuing operations were inadequate to cover fixed
charges by $269,000. However, the ratio of earnings to fixed charges is not
intended to disclose cash flow from operations. In addition to the normal
noncash expenses, such as depreciation and provision for possible lease and loan
losses, the provision for write-down of real estate negatively affects the ratio
for 1992. The ratio of earnings to fixed charges would be 1.35 if the provision
for write-down of real estate were excluded.

<PAGE> 101

Exhibit 24.1

The Board of Directors
Horrigan American Inc.

We consent to the use of our reports included herein or incorporated herein
by reference and to the reference to our firm under the heading of "Experts" in
the Registration Statement and Prospectus.

KPMG Peat Marwick LLP
March 16, 1995

<PAGE> 102
Exhibit 26

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM T-1

STATEMENT OF ELIGIBILITY AND QUALIFICATION
UNDER THE TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE

CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY
OF A TRUSTEE PURSUANT TO SECTION 305(b)(2) / /

PNC BANK, NATIONAL ASSOCIATION
---------------------------------------------------
(Exact name of trustee as specified in its charter)

(national bank) 25-1197336
--------------------------- --------------------
(State of incorporation if (I.R.S. Employer
not a U.S. national bank) Identification No.)

One PNC Plaza
Fifth Avenue and Wood Streets
Pittsburgh, Pennsylvania 15222
- ------------------------------ ----------
(Address of principal (Zip Code)
executive offices)

Lillian Cohen, PNC Bank, National Association
201 Penn Avenue, Scranton, Pennsylvania 18501
717-961-7309
--------------------------------------------------------
(Name, address and telephone number of
agent for service)

HORRIGAN AMERICAN, INC.
---------------------------------------------------
(Exact name of obligor as specified in its charter)

Pennsylvania 23-2224614
- ------------------------- ------------------
(State or other jurisdic- (I.R.S. Employer
tion of incorporation Identification No.)
or organization)

6 Commerce Drive, Shillington, Pennsylvania 19607
- ---------------------------------------------- ----------
(Address of principal executive offices) (Zip Code)

Subordinated Investment Certificates of the following series:

1995 Series 8 Subordinated Investment Certificates
1995 Series A Subordinated Investment Certificates
1995 Series B Subordinated Investment Certificates
1995 Series C Subordinated Investment Certificates
Passbook Series Subordinated Investment Certificates
----------------------------------------------------
(Title of the indenture securities)

<PAGE> 103

Item 1. General Information
-------------------
Furnish the following information as to the trustee:

(a) Name and address of each examining or supervising authority
to which it is subject.

Comptroller of the Currency
Washington, D.C.

Board of Governors of the
Federal Reserve System
Washington, D.C.

Federal Deposit Insurance Corporation
Washington, D.C.

(b) Whether it is authorized to exercise corporate trust powers.

Yes.

Item 2. Affiliations with Obligor
-------------------------

If the obligor is an affiliate of the trustee, describe each such affiliation.

None.

Items 3 through 14.

The obligor is not in default under any of its outstanding securities for which
PNC Bank, National Association is trustee. Accordingly, responses to Items 3
through 14 of Form T-1 are not required pursuant to General Instruction B to
Form T-1.

Item 15. Foreign Trustee
---------------

Identify the order or rule pursuant to which the foreign trustee is authorized
to act as sole trustee under indentures to be qualified under the Act.

Not applicable.

Item 16. List of Exhibits
----------------

List below the exhibits filed as part of this statement of eligibility and
qualification.

1. Articles of Association of the trustee, filed as
Exhibit 1 to the trustee's statement of eligibility and
qualification, no. 22-25912, and incorporated by
reference.

<PAGE> 104

2. Certificate of authority of the trustee to commence
business, filed as Exhibit 2 to the trustee's statement
of eligibility and qualification, registration
no. 2-58789, and incorporated by reference.

3. Authorization of the trustee to exercise corporate
trust powers, filed as Exhibit 3 to the trustee's
statement of eligibility and qualification,
registration no. 2-58789, and incorporated by
reference.

4. By-Laws of the trustee, filed as Exhibit 4 to the
trustee's statement of eligibility and qualification,
no. 22-25912, and incorporated by reference.

5. Not applicable.

6. The consent of the trustee required by Section 321(b)
of the Trust Indenture Act of 1939 appears below.

7. Report of condition of the trustee as of the close of
business December 31, 1994.

8. Not applicable.

9. Not applicable.

CONSENT OF TRUSTEE

Pursuant to the requirements of Section 321(b) of the Trust Indenture
Act of 1939, in connection with the filing of this statement of eligibility, the
trustee hereby consents that reports of examination by Federal and State
authorities may be furnished by such authorities to the Securities and Exchange
Commission upon its request.

<PAGE> 105

SIGNATURE

Pursuant to the requirements of the Trust Indenture Act of 1939, the
trustee, PNC BANK, NATIONAL ASSOCIATION, a national banking association
organized and existing under the laws of the United States of America, has duly
caused this statement of eligibility and qualification to be signed on its
behalf by the undersigned, thereunto duly authorized, all in the City of
Scranton and Commonwealth of Pennsylvania, on the 20th day of March, 1995.

PNC BANK, NATIONAL ASSOCIATION

By /s/ Lillian Cohen
-----------------------------
Lillian Cohen
Authorized Officer

<PAGE> 106

EXHIBIT T-1-7

REPORT OF CONDITION
Consolidating domestic and foreign subsidiaries of
PNC BANK, NATIONAL ASSOCIATION
of PITTSBURGH in the state of PENNSYLVANIA
at the close of business on
December 31, 1994
published in response to call made by
Comptroller of the Currency,
under title 12, United States Code, Section 161
Charter Number 540
Comptroller of the Currency Northeastern District

STATEMENT OF RESOURCES AND LIABILITIES

Thousands
of Dollars
----------
ASSETS

Cash and balances due from depository institutions
Noninterest-bearing balances and currency and coin.......... $ 1,915,923
Interest-bearing balances................................... 3,134
Securities
Held-to-maturity securities................................. 13,012,893
Available-for-sale securities............................... 2,599,848
Federal funds sold and securities purchased under
agreements to resell in domestic offices of the
bank and of its Edge and Agreement subsidiaries,
and in IBFs:
Federal funds sold........................................ 143,200
Securities purchased under agreements to resell........... 0
Loans and lease financing receivables:
Loans and leases, net of unearned income $24,628,499
LESS: Allowance for loan and lease losses 662,850
Loans and leases, net of unearned income, -----------
allowance and reserve..................................... 23,956,649
Assets held in trading accounts............................... 89
Premises and fixed assets (including capitalized leases)...... 485,753
Other real estate owned....................................... 44,015
Investments in unconsolidated subsidiaries and
associated companies........................................ 36,562
Customers' liability to this bank on acceptances
outstanding................................................. 33,770
Intangible assets............................................. 492,068
Other assets.................................................. 1,888,857
-----------
Total Assets................................................ $44,624,761
===========

<PAGE> 107

LIABILITIES

Deposits:
In domestic offices......................................... $21,686,988
Noninterest-bearing $ 5,352,189
Interest-bearing 16,334,799
In foreign offices, Edge and Agreement subsidiaries,
and IBFs.................................................. 3,042,582
Noninterest-bearing $ 7,190
Interest-bearing 3,035,392
Federal funds purchased and securities sold under agreements
to repurchase in domestic offices of the bank and of its
Edge and Agreement subsidiaries, and in IBFs:
Federal funds purchased................................... 812,775
Securities sold under agreements to repurchase............ 3,179,914
Demand notes issued to U.S. Treasury.......................... 1,703,413
Other borrowed money
With original maturity of one year or less.................. 8,250,302
With original maturity of more than one year................ 1,901,200
Mortgage indebtedness and obligations under
capitalized leases.......................................... 5,535
Bank's liabilities on acceptances executed and outstanding.... 36,770
Subordinated notes and debentures............................. 155,000
Other liabilities............................................. 573,760
-----------
Total liabilities............................................. 41,348,239

EQUITY CAPITAL

Common Stock.................................................. 30,850
Surplus....................................................... 1,341,900
Undivided profits and capital reserves........................ 2,001,620
Net unrealized gains (losses) on available-for-sale
securities.................................................. (97,848)
Total equity capital.......................................... 3,276,522
-----------
Total liabilities and equity capital.......................... $44,624,761
===========

<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> DEC-31-1994
<CASH> 1,947,000
<SECURITIES> 2,335,000
<RECEIVABLES> 154,128,000
<ALLOWANCES> 6,055,000
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 45,498,000
<DEPRECIATION> 7,916,000
<TOTAL-ASSETS> 194,330,000
<CURRENT-LIABILITIES> 0
<BONDS> 154,606,000
<COMMON> 3,128,000
0
0
<OTHER-SE> 27,318,000
<TOTAL-LIABILITY-AND-EQUITY> 194,330,000
<SALES> 1,177,000
<TOTAL-REVENUES> 27,448,000
<CGS> 0
<TOTAL-COSTS> 11,082,000
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 1,377,000
<INTEREST-EXPENSE> 9,821,000
<INCOME-PRETAX> 6,345,000
<INCOME-TAX> 2,502,000
<INCOME-CONTINUING> 3,688,000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3,688,000
<EPS-PRIMARY> 1.18
<EPS-DILUTED> 1.18

</TABLE>