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18. Indemnification
18.1 Lessee will indemnify Lessor and protect,
defend and hold it harmless from and against any and
all loss, cost, damage, injury or expense, including,
without limitation, reasonable attorneys' fees,
wheresoever and howsoever arising which Lessor or its
subsidiaries or shareholders, or any of its or their
directors, officers, agents, employees, stockholders or
partners, may incur by reason of any breach by Lessee
of any of the representations by, or obligations of,
Lessee contained in this Lease or in any way relating
to or arising out of this Lease, the Equipment, claims
of holders of the Lien or Underlying Leases; * * *
On March 19, 1984, the partnership purchased the initial
equipment from Hambrose for $419,132.00 subject to the liens of
the original third-party lender, a lien on and security interest
in the initial equipment on the part of Hambrose, and the user
lease and the initial equipment wrap lease. This $419,132.00
purchase price was payable as follows: $1,000.00 in cash on
May 8, 1984, $48,000.00 in cash on December 31, 1984, and then in
85 consecutive monthly installment payments of $6,287.99 each,
with the first payment due on April 1, 1984. This note was
nonrecourse as to the partnership.2
These payments were subject to deferral until September 30,
1992, if the partnership did not receive amounts due it from
Charterhouse. The partnership anticipated that a substantial
portion of a limited partner's return would depend on the
residual value of the equipment (for resale or release purposes)
2 Hambrose Leasing v. Commissioner, 99 T.C. 298, 301, 312
(1992); see infra note 9.
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