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equipment. With those lease periods specified by the
over lease agreement, CAP would have no actual over lease
residual interests in the K-Mart and Shared equipment. See
supra note 7.
The right to the master lease rental payments owed by CFX
Financial for the K-Mart and Shared equipment was separate from
the over lease rental payments that CAP owed to Jenrich. Under
the over lease, CAP was obligated to apply those CFX Financial
master lease rental payments to pay off the EQ installment note
held by CFX Financial. As to CAP’s over lease rental payments
due to Jenrich, they equaled and coincided with the installments
that Jenrich was required to make to CAP under Jenrich’s
$4,056,220 equipment purchase installment note (which had been
issued in connection with the above CAP-Jenrich transaction in
step 2).
4. On the next day, September 1, 1995, CAP sold to Aardan
Leasing Corp. (Aardan), a Delaware corporation, the rights to the
master lease rental payments due from CFX Financial relating to
the K-Mart and Shared equipment. The September 1, 1995,
agreement between CAP and Aardan provided that Aardan assume
CAP’s obligation (described above in step 1) to CFX Financial
under the EQ installment note.
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