- 7 -
with Section 5, or loss or liability resulting from the
willful misconduct or negligence of the party otherwise
to be indemnified hereunder. Lessee's obligations
hereunder shall be those of primary obligor
irrespective of whether Lessor shall also be
indemnified with respect to the same matter under any
other agreement by any other person. Upon payment in
full of any indemnities contained herein by Lessee,
Lessee shall be subrogated to any rights of Lessor in
respect of the matter against which indemnity has been
given.
The Lease Agreement was a net lease under which GCC's obligation
to pay rent was unconditional and not subject to set-off. As
security for its obligations under the Lease Agreement, GCC
granted petitioner a security interest in the underlying end-user
leases. Additionally, the Lease Agreement provided that
petitioner, upon GCC's default, had the right to direct the
underlying lessees to make payment directly to petitioner.
Finally, GCC could substitute equipment where, in GCC's opinion,
a unit was uneconomical to lease, or where an end-user purchased
the equipment for its fair market value or pursuant to a purchase
option.7
On December 22, 1982, GCC, Elmco, and petitioner entered
into a "Depository Agreement." Pursuant to the Depository
Agreement, First Interstate Bank of Arizona (First Interstate)
agreed to receive, and transfer between accounts, the amounts
7 If GCC replaced a unit of equipment, it would transfer title
to the replacement unit to petitioner free and clear of all
encumbrances, other than the rights of the end-user lessees.
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
Last modified: May 25, 2011