Equipment Leasing

Part I Equipment Leasing: Theory and Practical Guidance
CHAPTER 1 Lease vs. Purchase or Borrow Decision
P 1.01 Scope
P 1.02 True Lease or Conditional Sales Agreement
P 1.03 Conditional Sales Agreement with One Dollar Purchase Option
P 1.04 Conditional Sales Agreement with Bargain Purchase Option
P 1.05 True Lease vs. Purchase and Borrow Decision

CHAPTER 2 Statutory Treatment of Leasing Transactions: The Legislative History of Article 2A and the UNIDROIT Convention on International Financial Leasing
P 2.01 Scope
P 2.02 Leasing in Our Economy
P 2.03 Drafting the 1987 Version of Article 2A
P 2.04 The Adoption Process
P 2.05 The 1990 Revision
P 2.06 Comparison of 1987 and 1990 Versions
P 2.07 Judicial Acceptance of Article 2A
P 2.08 Model and Structure of Article 2A
P 2.09 International Leasing Transactions
P 2.10 Statutory Treatment of Leases: The End or Merely the Beginning

CHAPTER 3 Article 2A--Statutory Analysis
P 3.01 Scope of Chapter
P 3.02 Overview of Article 2A
P 3.03 Article 2A and Other Law
P 3.04 General Provisions
P 3.05 The Finance Lease
P 3.06 Warranties Under Article 2A
P 3.07 Risk of Loss
P 3.08 Alienability of Interests
P 3.09 Fixtures
P 3.10 Default
P 3.11 Damages and Other Remedies
P 3.12 The Lessor's Remedies Upon the Lessee's Default
P 3.13 The Lessee's Remedies Upon the Lessor's Default
P 3.14 The Impact of Article 2A

CHAPTER 4 How the Uniform Commercial Code and Common Law Distinguish a True Lease from a Security Interest
P 4.01 Introduction
P 4.02 Some Notes on Terminology
P 4.03 The Significance of the Distinction
P 4.04 The Statute
P 4.05 The Need to Look Beyond the Statute for Answers--Supplementary Concepts
P 4.06 An Alternative Principle for Understanding Both the Statute and the Concepts Offered to Supplement the Statute
P 4.07 The Puzzling Case of TRAC Leases
P 4.08 Conclusion

CHAPTER 5 State Law Issues
P 5.01 Scope
P 5.02 Corporate Formalities
P 5.03 Foreign Corporation Licensing, Registration and Reporting Requirements
P 5.04 Usury Laws
P 5.05 Unconscionability
P 5.06 Common-Law and Statutory Liens
P 5.07 State Filing Taxes
P 5.08 Choice of Law
P 5.09 Consent to Jurisdiction and Forum
P 5.10 Security Deposits

CHAPTER 6 Annotated Middle Market Master Lease and Equipment Schedule
P 6.01 Scope of Chapter
P 6.02 Annotated Middle Market Master Lease Agreement
P 6.03 Annotated Lease Schedule
Appendix A Form of Middle Market Master Lease and Equipment Schedule

CHAPTER 7 Annotated Unconditional Continuing Guaranty and Letter of Credit
P 7.01 Scope of Chapter
P 7.02 Annotated Unconditional Continuing Guaranty
P 7.03 Annotated Letter of Credit
Appendix A Form of Unconditional Continuing Guaranty
Appendix B Form of Letter of Credit

CHAPTER 8 Commitment Letters and Other Preliminary Agreements (Written and Unwritten); Liability for Failing to Close
P 8.01 Scope of Chapter
P 8.02 Types of Preliminary Documents
P 8.03 Content of Preliminary Documents
P 8.04 "Unintentional" Commitments; Liability for Failing to Close
P 8.05 Sample Clauses
Appendix 8A Forms

CHAPTER 9 Legal Opinions
P 9.01 Scope of Chapter
P 9.02 Overview of Legal Opinions
P 9.03 In-House Versus Outside Counsel Opinions
P 9.04 Specific Clauses
P 9.05 Specific Kinds of Opinions
P 9.06 Illustrative Opinion Forms
Appendix 9A Bibliography

CHAPTER 10 Insurance
P 10.01 Insurance in Equipment Leases
P 10.02 Negotiation of Insurance Provisions
P 10.03 Sources of Insurance
P 10.04 Insurance in Ship Leases
P 10.05 Insurance in Aircraft Leases
P 10.06 Insurance in Satellite Transponder Leases
P 10.07 Insurance in Railroad Leases
P 10.08 Insurance in Computer Leases
P 10.09 Residual Value Insurance

CHAPTER 11 Mergers and Acquisitions, Portfolio Purchases and Vendor Programs
P 11.01 Mergers and Acquisitions and Portfolio Purchases
P 11.02 Vendor Programs

CHAPTER 12 Vendor Finance
P 12.01 Introduction
P 12.02 Areas of Primacy
P 12.03 Types of Programs
P 12.04 Joint Venture Formation
P 12.05 Relationship Specifics
P 12.06 Program Economics
P 12.07 Reporting
P 12.08 Dealer Finance
P 12.09 Purchase Process (for Lease Finance)
P 12.10 Credit Support
P 12.11 Program Marketing
P 12.12 Remarketing
P 12.13 Portfolio Servicing
P 12.14 Separation Issues
P 12.15 Finance Partner Issues
P 12.16 Accounting Issues
P 12.17 Regulation
P 12.18 Additional Considerations for Specific Asset Types
P 12.19 Conclusion

CHAPTER 13 Securitization
P 13.01 Equipment Lease Securitization Generally
P 13.02 Portfolio Analysis
P 13.03 Credit Enhancement
P 13.04 Accounting Aspects
P 13.05 Tax Considerations
P 13.06 Bankruptcy Aspects
P 13.07 Securities Law Aspects
P 13.08 UCC Considerations
P 13.09 Certain Regulatory Aspects
P 13.10 Selected Bibliography

CHAPTER 13A Synthetic Leasing
P 13A.01 Overview
P 13A.02 Benefits to the Lessee
P 13A.03 Operating Lease Treatment
P 13A.04 Lease Intended for Security or Conditional Sale
P 13A.05 Documentation
P 13A.06 End of Term Options
P 13A.07 Third Party Financing
P 13A.08 Specific Issues to Be Considered
P 13A.09 Conclusion
Appendix A MASTER LEASE AGREEMENT
Appendix B EQUIPMENT SCHEDULE

CHAPTER 14 Warranties in Equipment Leasing
P 14.01 Scope of Chapter
P 14.02 Defining the Applicable Law in Terms of the Type of Leasing Transaction
P 14.03 Warranties Under Common Law
P 14.04 Uniform Commercial Code
P 14.05 Waivers of Warranties
P 14.06 Article 2A

CHAPTER 15 Default, Remedies, and Litigation
P 15.01 Introduction
P 15.02 Events of Default--Contractual and Statutory
P 15.03 Pre-Litigation Review
P 15.04 Remedies
P 15.05 Obtaining Possession of the Equipment
P 15.06 Disposition of the Equipment
P 15.07 Litigation
P 15.08 Trial
P 15.09 Forms
CHAPTER 16 Equipment Lease Defaults: Calculating the Lessor's Damages
P 16.01 Equipment Leases Contrasted with Other Types of Financing
P 16.02 Elements of the Lessor's Damages
P 16.03 Lessee's Damages
P 16.04 Liquidated Damages
P 16.05 Uniform Commercial Code Article 2A

CHAPTER 17 Bankruptcy
P 17.01 Introduction and Scope
P 17.02 Dichotomy of Treatment in Bankruptcy of "True Leases" and Leases Intended as Security
P 17.03 Rejection, Assumption and Assignment
P 17.04 Selected Issues Affecting Equipment Lessors
P 17.05 Article 2A and the Bankruptcy Code
P 17.06 Forms
P 17.07 Appendix

CHAPTER 18 Fraud in Equipment Leasing
P 18.01 Scope of Chapter
P 18.02 Wrongful Omissions or Commissions
P 18.03 How to Detect Fraudulent Lease Transactions
P 18.04 Famous Frauds: Lessons to Be Learned
P 18.05 How to Prevent Fraud
P 18.06 How to Deal With Fraud Once Detected
P 18.07 Appendix

CHAPTER 19 Financing and Syndication of Equipment Lease Transactions
P 19.01 Introduction
P 19.02 "Routine" Procedures for Financing and Syndicating of Equipment Lease Transactions
P 19.03 Methods of Financing and Syndicating Equipment Lease Transactions
P 19.04 Representations and Warranties of Lessor in Financing of Equipment Lease Transactions
P 19.05 Covenants of Lessor in Financing of Equipment Lease Transactions
P 19.06 Representations, Warranties and Covenants of Funding Source
P 19.07 Remedies for Breach of Representations, Warranties and Covenants by Lessor
P 19.08 Voluntary Repurchase or Prepayment of Financed Lease Transactions
P 19.09 Negotiating Documentation for Financing of Lease Transactions

CHAPTER 20 Lessor's Tort and Lender Liability
P 20.01 Theories of Lessor Tort Liability: Scope
P 20.02 Strict Products Liability
P 20.03 Negligence
P 20.04 Avoidance Techniques: Insurance Coverage
P 20.05 Theories of Lender Liability: Background
P 20.06 Obligations of Good Faith Under the Uniform Commercial Code
P 20.07 Common Law Theories
P 20.08 Statutory Theories of Lender Liability
P 20.09 Checklist for Avoidance of Lender Liability Claims

CHAPTER 21 The Environmental Aspects of Equipment Leasing
P 21.01 Introduction
P 21.02 Comprehensive Environmental Response, Compensation and Liability Act
P 21.03 Oil Pollution Act of 1990
P 21.04 Federal Water Pollution Control Act
P 21.05 Other Significant Federal Statutes
P 21.06 Risk Management and Safeguards Against Liability

CHAPTER 22 Lease Syndication
P 22.01 Introduction
P 22.02 Equipment Syndication Structures
P 22.03 Equipment Syndication Entities
P 22.04 Securities Aspects of Syndications
P 22.05 Private Offerings
P 22.06 ERISA Considerations

CHAPTER 23 Regulation of Bank Leasing Activities
P 23.01 Introduction
P 23.02 National Banks
P 23.03 State Member Banks
P 23.04 State Nonmember Banks
P 23.05 Bank Holding Companies
P 23.06 Joint Activities
P 23.07 International Leasing Activities
P 23.08 Savings Associations
P 23.09 Affiliates of Savings Associations P 23.10 Other Regulations

CHAPTER 24 Leveraged Leasing
P 24.01 Background
P 24.02 Overview
P 24.03 Structure of a Leveraged Lease Transaction
P 24.04 Documentation
P 24.05 Variations of Leveraged Leases
P 24.06 Federal Laws

CHAPTER 25 Operating Leases
P 25.01 Scope of Chapter
P 25.02 Definitions
P 25.03 Classes of Operating Leases
P 25.04 Drafting the Traditional Operating Lease
P 25.05 Drafting the Hybrid Operating Lease
Appendix 25A Forms

CHAPTER 26 Cross-Border Leasing
P 26.01 Introduction
P 26.02 Catalysts
P 26.03 History
P 26.04 Structural Issues
P 26.05 Applicable Law
P 26.06 Accounting and Reporting Requirements
P 26.07 Privatization and Political Climates
P 26.08 Export Financing
P 26.09 Bankruptcy
P 26.10 Uniform Codes

CHAPTER 27 Consumer Leasing
P 27.01 Scope of Chapter
P 27.02 Federal Consumer Leasing Act
P 27.03 Equal Credit Opportunity Act
P 27.04 State Laws Focused on Consumer Leases
P 27.05 Special Further Considerations

CHAPTER 28 Facility and Project Lease Financing
P 28.01 Scope
P 28.02 Distinguishing a Facility Lease from an Equipment Lease
P 28.03 Different Kinds of Facility Leases: Project Leases, Credit Leases and Hybrid Leases
P 28.04 The Pros and Cons of a Facility Lease Financing
P 28.05 Construction Financing Issues
P 28.06 Preparing for Permanent Financing
P 28.07 Special Issues for Consideration by the Parties to a Facility Lease Transaction
P 28.08 Documentation
P 28.09 Special Considerations in Closing a Facility Lease Transaction
Appendix A Facility and Project Lease Financing List of Principal Documents

CHAPTER 29 Leasing of Healthcare and Medical Equipment
P 29.01 Introduction
P 29.02 Financing the Healthcare Delivery System
P 29.03 Identity of the Lessee
P 29.04 Regulatory Considerations
P 29.05 Lessor Tort Liability
P 29.06 Bankruptcy Law Considerations
P 29.07 Re-Marketing
P 29.08 Drafting the Healthcare Equipment Lease
Appendix A Healthcare/Medical Equipment Rider to Equipment Schedule to Master Lease Agreement

Part II Specific Industry Leasing
CHAPTER 30 Satellites and Transponders
P 30.01 Introduction
P 30.02 Satellites and Transponders
P 30.03 Recommended Provisions in Financing Documentation
P 30.04 Security Interests in Transponders
P 30.05 Insurance
P 30.06 Regulatory Considerations
P 30.07 Tax Considerations

CHAPTER 31 High-Tech and Computers
P 31.01 Introduction
P 31.02 The Computer Leasing Industry
P 31.03 Characteristics of Computer and High-Technology Equipment
P 31.04 Article 2A and High-Technology Leasing
P 31.05 Analysis of Typical Computer Lease Terms and Provisions
P 31.06 Analysis of Lessor/Lessee Ancillary Documents
P 31.07 Assignment and Sale of Computer Leases
P 31.08 Leasing of Software

APPENDIX
CHAPTER 31A Venture Leasing & Software Leasing

I. VENTURE LEASING
P 31A.01 Introduction
P 31A.02 Lease Documentation
P 31A.03 Warrant Documentation
P 31A.04 Tenant Improvements and Fixtures

II. SOFTWARE LEASING
P 31A.05 Introduction
P 31A.06 Really Unsecured Financing?--Risks Inherent in Software Leasing
P 31A.07 Overview of Different Software Lease Structures
P 31A.08 Perfection of a Security Interest in Intellectual Property
P 31A.09 What Is the Proper Legal Characterization of a "Software Lease"?
P 31A.10 What Is the Governing Law in a Software Lease Transaction?
P 31A.11 Actions That a Lessor Can Take to Minimize Legal Risk
P 31A.12 Sample Forms

CHAPTER 32 Aircraft
P 32.01 Introduction
P 32.02 Aircraft
P 32.03 Recommended Provisions in Lease Documentation
P 32.04 Ownership, Leases and Security Interests in Aircraft and Engines
P 32.05 Insurance
P 32.06 Tax Considerations
P 32.07 Conclusion

CHAPTER 32A Corporate Aircraft
P 32A.01 Introduction
P 32A.02 Differences between Corporate Aircraft and Commercial Aircraft
P 32A.03 Corporate Aircraft Financing Structures
P 32A.04 Corporate Aircraft Fractional Interest Programs
P 32A.05 Financing Fractional Interests
P 32A.06 Conclusion

CHAPTER 33 Railroad Rolling Stock
P 33.01 The U.S. Rail System
P 33.02 Recordation of Interests in Railroad Equipment
P 33.03 Securities Regulation
P 33.04 Special Tax Treatment
P 33.05 Bankruptcy
P 33.06 Selected Lease Provisions
P 33.07 Appendix

CHAPTER 34 Ships and Vessels
P 34.01 Overview
P 34.02 The "Wet Lease"
P 34.03 The Ship Mortgage, Vessel Documentation, and the Jones Act
P 34.04 Special Ship Leasing Considerations
P 34.05 Glossary of Terms
P 34.06 Table of Acts, Conventions and Treaties
P 34.07 Marine Insurance Checklist
P 34.08 Ship Loan Checklist

Part III Taxation
CHAPTER 35 Federal Income Taxation of Equipment Leasing
P 35.01 Scope of Chapter
P 35.02 Determining the Owner of the Leased Equipment
P 35.03 The I.R.S. Ruling Guidelines
P 35.04 Tax Consequences to Lessors
P 35.05 Tax Consequences to Lessees
P 35.06 Holding Ownership Interests in Leased Property
P 35.07 Motor Vehicle Leases with Terminal Rental Adjustment Clauses
P 35.08 Cross Border Leasing Transactions
P 35.09 Tax Indemnities
P 35.10 Tax Considerations in Defaults and Workouts
Appendix A TAX INDEMNITY AGREEMENT
Appendix B SAMPLE PURCHASE AND RENEWAL OPTION PROVISIONS
Appendix C GENERAL TAX INDEMNITY PROVISION

CHAPTER 36 Captive Leasing Companies
P 36.01 Scope
P 36.02 Definition and Purpose of Captive Leasing
P 36.03 Financial Accounting Issues
P 36.04 Tax Issues
P 36.05 Legal Considerations

CHAPTER 37 Meeting the Equipment Needs of State and Local Governments With Tax-Exempt Lease Purchase Financings
P 37.01 Introduction
P 37.02 Structure of Lease Purchase Financings
P 37.03 Lease Purchase Agreements
P 37.04 State Law Considerations
P 37.05 Income Tax Considerations
P 37.06 Conclusions

CHAPTER 38 State and Local Taxation
P 38.01 Overview
P 38.02 Sales and Use Tax
P 38.03 Other State and Local Taxes
P 38.04 Sample Forms: Certificates of Exemption

Part IV Accounting
CHAPTER 39 Accounting for Leases
P 39.01 Scope of Chapter
P 39.02 Lease Accounting Theory
P 39.03 Lease Classification Criteria
P 39.04 Lessee Accounting
P 39.05 Lessor Accounting
P 39.06 Contingent Rents
P 39.07 Sale-Leaseback Arrangements
P 39.08 Leveraged Leases
P 39.09 Leases Involving Real Estate
P 39.10 Other Lease-Related Transactions
P 39.11 Financial Statement Presentation and Disclosure
P 39.12 Nonsubstantive Lessors--Synthetic Leases
P 39.13 Securitizations--FASB 125

CHAPTER 40 Lessee Concerns in Equipment Leasing
P 40.01 Overview
P 40.02 Preparation for Leasing
P 40.03 Lease Commencement Considerations
P 40.04 Lessor Responsibility
P 40.05 Equipment Use Provisions
P 40.06 Flexibility Regarding Equipment Term
P 40.07 Return Provisions
P 40.08 Equipment Casualty
P 40.09 Additional Considerations
P 40.10 Summary

Part V U.C.C. Article 2A Leases
AMENDMENTS TO UNIFORM COMMERCIAL CODE ARTICLE 2A--LEASES