IPO II, A Partnership, Gerald R. Forsythe, Tax Matters Partner - Page 7

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                    acknowledges that it is fully aware of, and consents to           
                    the terms and conditions of the Security Agreement, the           
                    Note and each of the other Basic Agreements.  The                 
                    obligations of the Debtor hereby guaranteed are herein            
                    called the “Obligations”;                                         
                         *    *    *    *    *    *    *                              
                    SECTION 3.  No Subrogation.  * * *  The Guarantor                 
               hereby further irrevocably waives all contractual, common              
               law, statutory or other rights of reimbursement,                       
               contribution, exoneration or indemnity (or any similar                 
               right) from or against the Debtor or any other party which             
               may have arisen in connection with this Guarantee.                     

               Additionally, as required by the loan and security                     
          agreement, IPO II and Indeck Energy were issued an aircraft                 
          insurance policy with respect to the aircraft.  The promissory              
          note, loan and security agreement, and guaranties were recorded             
          and filed in due course.                                                    
               In 1997, petitioner was appointed TMP of IPO II, and Indeck            
          Overseas was appointed manager of IPO II.  Both members continue            
          to serve in their respective capacities.                                    
               Petitioner filed a Form 1065, U.S. Partnership Return of               
          Income, on behalf of IPO II for each of the years in issue.  On             
          July 12, 2002, respondent issued the FPAA to petitioner, as TMP             
          of IPO II, with respect to the years in issue.  In the FPAA,                
          respondent determined, inter alia, that 100 percent of the                  
          recourse liability shown on the Schedules K-1, Partner’s Share of           
          Income, Credits, Deductions, etc., was allocable to Mr. Forsythe,           








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