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between March 29, 1997, and April 30, 2000, and July 31, 1997,
and October 31, 2002, respectively, all of which followed the
existing leases. It also provided that CFP had the right to
receive rents on the K-Mart and Shared equipment during its
master lease residual periods. The master lease rental payments
due from CFP to EQ were equal to, coincided with, and were fully
offset by the installments owed to CFP by EQ under the $14.125
million equipment purchase note.
5. On November 1, 1994, Johnson executed, on behalf of
CMACM in its capacity as managing partner of CFP, a remarketing
agreement with CLI (master remarketing agreement) providing that
CLI would be the exclusive remarketing agent for the leased
equipment for the period between the expiration of the K-Mart and
Shared end-user leases and the expiration of the master lease.
The master remarketing agreement provided that revenue and
proceeds from the lease, sale, or disposition of the leased
equipment would be applied in the following order: (1) Senior
financing; (2) reimbursement of CLI’s expenses; (3) reimbursement
of CFP’s (sublessor’s) expenses; (4) payment of a 5-percent fee
to CLI; and (5) payment of any remainder to CFP (sublessor). The
master remarketing agreement also provided that the sublessor
(CFP) could terminate the agreement if, among other events, CLI
ceased its remarketing activities, filed for bankruptcy, or
failed to perform its obligations under the agreement. In
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