Documentation Flashcards
Standard “One-Off” Lease Agreement
A lease that governs only one transaction and includes all other documentation, terms and conditions
Master Lease Agreement
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.”
Plain Language Agreement
Lease document that avoids legalese and make the terms more easily understood.
Lease
Basic agreement where a Lessor agrees to provide use of equipment to Lessee in exchange for rental payments
Lease Schedule
Document used with a Master Lease that includes the equipment, and payment terms specific to one project
Exhibits
Formal additions to a lease
Guaranty
Document providing additional credit enhancement from an individual or other business that is not the Lessee
Delivery and Acceptance Certificate
Document signed by Lessee that they agree to accept the equipment
Corporate Resolution (COI)
Document that explains who can sign on behalf of the Lessee (Legally)
Real Estate Waiver (LLLW)
Acknowledgment from a Landlord that the equipment being leased belongs to the Lessor and the Lessor can remove it if needed.
Fixture Filing
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
UCC Filings
Filing with the Secretary of State (Where the Lessee is incorporated) preserving the priority of Lessor’s security interest in the equipment
Cross Default Agreement
For when multiple agreements are in place, if one goes into default, Lessor can declare all other agreements to also be in default
Purchase Order
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.
Invoice
Request for payment from Vendor, also demonstrates the passing of Title to the equipment to Lessor
Advance Funding Agreement (pre delivery)
Lessor advances funds ahead of equipment delivery, Lessee agrees to pay regardless (“Hell or High Water”)
Purchase Option
Terms for how the Lessee can obtain ownership of the equipment at the end of term
Identification and Signature of both Parties
Legal names of Lessee and Lessor clearly identified, and signed for by both parties
Equipment Description
What is being leased, specifically
Equipment Location
Where it is located and being used, for obtaining and tax purposes
Terms of Payments and Commencement
Amount, Frequency (“plus applicable taxes”) and when rent begins specifically
Intent of Agreement
Lessee agrees to pay rent to lessor for use of the equipment
Acceptance of Equipment by Lessee
Lessee agrees the equipment is “satisfactory” as supplied by the vendor
Disclaimer of Warranties
Lessee agrees any issues related to equipment will be resolved with the vendor, not the Lessor
Assignments
Terms around if the Lessee can assign payments to another entity, or if a Lessor can do the same
Choice of Law/Jurisdiction/Venue
Where disputes will be held in court, and what choice of law will be used
Authorizations allowed to Lessor
Specifies what Lessee authorizes Lessor to do on their behalf, such as file UCCs, insert numbers (such as adjusted payments, etc.)
Ownership
Specifies the equipment is “personal property” and is owned by the Lessor
Renewal
Explains options for once the original term is completed
Insurance Requirements
Property- Lender Loss Payee (Lessor can obtain lost value in a claim)
Liability- Additional Insured (Lessor is covered for liability)
Responsibilities for Taxes
Specifies that the Lessee is responsible for all taxes including use, value, possession, or property taxes (‘Net Lease”)
Default Provisions and Remedies
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
Late Fees
How will any late fees be handled
Indemnification of Lessor
Lessee will hold lessor fully harmless for any claim against Lessee related to the equipment, and compensate Lessor for any damage or loss
Cross Default Clause
If one lease is under default, Lessor can call all other agreements with Lessee in default as well.
Severability
If any one provision of a lease agreement is deemed unenforceable, the remaining provisions remain enforceable
