Equipment Leasing

Everything You Need To Structure A Transaction Involving An Equipment Lease. In-Depth Coverage Of Vital Topics. This powerful one-stop guide to equipment leasing thoroughly analyzes and discusses Article 2A of the UCC, financing, regulatory, state, local and federal taxation, accounting, litigation, insurance and bankruptcy issues.

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Everything You Need To Structure A Transaction Involving An Equipment Lease.

In-Depth Coverage Of Vital Topics.

This powerful one-stop guide to equipment leasing thoroughly analyzes and discusses Article 2A of the UCC, financing, regulatory, state, local and federal taxation, accounting, litigation, insurance and bankruptcy issues. In addition, all essential types of leases, such as leveraged, operating, cross-border, consumer, finance, merchant and true leases, as well as specific industry leasing, including ship/vessels, railroads, satellites, computers, aircraft and more, are covered.

Insights From More Than Fifty Experts.

More than fifty of the nation's most prominent equipment leasing experts have brought their collective knowledge to this treatise, making it the most authoritative treatise on equipment leasing available today. All the chapters are coordinated and consistent in their style and depth of treatment. The material is clear and easy to understand--useful for both the seasoned practitioner as well as newcomers to the field. At last, here is an amazingly comprehensive treatment of the legal and business issues relating to the leasing and other commercial financing of equipment! This invaluable three-volume set will provide you with all the material you'll need when structuring a transaction involving an equipment lease. You'll also get indispensable practical guidance on litigation strategy and tactics.

Important topics covered include:

  • Lease vs. purchase or borrow decisions
  • Lease securitizations
  • Mergers and acquisitions, portfolio purchase, and vendor programs
  • Article 2A of the Uniform Commercial Code
  • Default and Remedies
  • Fraud
  • UNIDROIT Convention on International Financial Leasing
  • Federal, state, and local taxation
  • Environmental regulation and liability
  • Warranties

    First published in 1995.

    4 Volumes; loose-leaf; updated with revisions.

    eBooks, CDs, downloadable content, and software purchases are noncancelable, nonrefundable and nonreturnable. Click here for more information about LexisNexis eBooks. The eBook versions of this title may feature links to Lexis+® for further legal research options. A valid subscription to Lexis+® is required to access this content.


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    Table of contents

    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



    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


    CHAPTER 31A Venture Leasing & Software Leasing


    P 31A.01 Introduction

    P 31A.02 Lease Documentation

    P 31A.03 Warrant Documentation

    P 31A.04 Tenant Improvements and Fixtures


    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




    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