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addition, CFP would be entitled to terminate CLI’s exclusive
remarketing agency if an item of equipment was not leased for
more than 120 days and CLI had not presented a remarketing
opportunity within that 120-day period.
6. Also on November 1, 1994, EQ and CLI entered into a
remarketing agreement (owner remarketing agreement) providing
that CLI would be responsible for the remarketing of the leased
equipment after the master lease’s term expired. The owner
remarketing agreement, with respect to the application of rent
proceeds, had identical terms to those contained in the above-
described master remarketing agreement between CFP and CLI.
7. On November 30, 1994, CFP sold for $11,773,040 to
Hitachi Credit America Corp. (HCA) its right to the rental income
from the existing end-user leases on the K-Mart, Shared, and
other equipment in a transaction described as a “rent strip
sale”. CFP, in turn, paid the $11,773,040 to ERA in satisfaction
of the senior debt that encumbered the leased equipment.
Simultaneously with the rent strip sale to HCA, CLI, ERA, and CFP
agreed to release their liens against the rents to become due
under the K-Mart, Shared, and other end user leases. CLI and
ERA, but not CFP, subordinated their claims against the leased
equipment to the rights of HCA. Thereafter, K-Mart, Shared, and
other end users were also instructed to pay the rent due from
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