Documentation

Question 1

Standard “One-Off” Lease Agreement

Answer 1

A lease that governs only one transaction and includes all other documentation, terms and conditions

Question 2

Master Lease Agreement

Answer 2

Umbrella agreement that sets the general terms and conditions that will govern all equipment specific projects, typically accompanied by additional one-time documents for each project, a “Lease Schedule.”

Question 3

Plain Language Agreement

Answer 3

Lease document that avoids legalese and make the terms more easily understood.

Question 4

Lease

Answer 4

Basic agreement where a Lessor agrees to provide use of equipment to Lessee in exchange for rental payments

Question 5

Lease Schedule

Answer 5

Document used with a Master Lease that includes the equipment, and payment terms specific to one project

Question 6

Exhibits

Answer 6

Formal additions to a lease

Question 7

Guaranty

Answer 7

Document providing additional credit enhancement from an individual or other business that is not the Lessee

Question 8

Delivery and Acceptance Certificate

Answer 8

Document signed by Lessee that they agree to accept the equipment

Question 9

Corporate Resolution (COI)

Answer 9

Document that explains who can sign on behalf of the Lessee (Legally)

Question 10

Real Estate Waiver (LLLW)

Answer 10

Acknowledgment from a Landlord that the equipment being leased belongs to the Lessor and the Lessor can remove it if needed.

Question 11

Fixture Filing

Answer 11

Similar to a UCC, but filed in the real property record to provide third party notice that the Lessor has interest in the equipment on the property

Question 12

UCC Filings

Answer 12

Filing with the Secretary of State (Where the Lessee is incorporated) preserving the priority of Lessor’s security interest in the equipment

Question 13

Cross Default Agreement

Answer 13

For when multiple agreements are in place, if one goes into default, Lessor can declare all other agreements to also be in default

Question 14

Purchase Order

Answer 14

Lessor notice to vendor that Lessor intends to purchase the equipment on behalf of the Lessee, once Lessee has met certain terms with Lessor.

–Purchase orders and invoices go together. Invoicing shows title entity, once payments is made there is a transfer of title.

Question 15

Invoice

Answer 15

Request for payment from Vendor, also demonstrates the passing of Title to the equipment to Lessor

Question 16

Advance Funding Agreement (pre delivery)

Answer 16

Lessor advances funds ahead of equipment delivery, Lessee agrees to pay regardless (“Hell or High Water”)

Question 17

Purchase Option

Answer 17

Terms for how the Lessee can obtain ownership of the equipment at the end of term

Question 18

Identification and Signature of both Parties

Answer 18

Legal names of Lessee and Lessor clearly identified, and signed for by both parties

Question 19

Equipment Description

Answer 19

What is being leased, specifically

Question 20

Equipment Location

Answer 20

Where it is located and being used, for obtaining and tax purposes

Question 21

Terms of Payments and Commencement

Answer 21

Amount, Frequency (“plus applicable taxes”) and when rent begins specifically

Question 22

Intent of Agreement

Answer 22

Lessee agrees to pay rent to lessor for use of the equipment

Question 23

Acceptance of Equipment by Lessee

Answer 23

Lessee agrees the equipment is “satisfactory” as supplied by the vendor

Question 24

Disclaimer of Warranties

Answer 24

Lessee agrees any issues related to equipment will be resolved with the vendor, not the Lessor

Question 25

Assignments

Answer 25

Terms around if the Lessee can assign payments to another entity, or if a Lessor can do the same

Question 26

Choice of Law/Jurisdiction/Venue

Answer 26

Where disputes will be held in court, and what choice of law will be used

Question 27

Authorizations allowed to Lessor

Answer 27

Specifies what Lessee authorizes Lessor to do on their behalf, such as file UCCs, insert numbers (such as adjusted payments, etc.)

Question 28

Ownership

Answer 28

Specifies the equipment is “personal property” and is owned by the Lessor

Question 29

Renewal

Answer 29

Explains options for once the original term is completed

Question 30

Insurance Requirements

Answer 30

Property- Lender Loss Payee (Lessor can obtain lost value in a claim)
Liability- Additional Insured (Lessor is covered for liability)

Question 31

Responsibilities for Taxes

Answer 31

Specifies that the Lessee is responsible for all taxes including use, value, possession, or property taxes (‘Net Lease”)

Question 32

Default Provisions and Remedies

Answer 32

What events trigger an event of default and what remedies the Lessor has against Lessee at the time.

–Call you in default, what are we going to do to get repaid. We can resell equipment, default situations

Question 33

Late Fees

Answer 33

How will any late fees be handled

Question 34

Indemnification of Lessor

Answer 34

Lessee will hold lessor fully harmless for any claim against Lessee related to the equipment, and compensate Lessor for any damage or loss

Question 35

Cross Default Clause

Answer 35

If one lease is under default, Lessor can call all other agreements with Lessee in default as well.

Question 36

Severability

Answer 36

If any one provision of a lease agreement is deemed unenforceable, the remaining provisions remain enforceable