Cover image for The complete equipment-leasing handbook : a deal maker's guide with forms, checklists, and worksheets
Title:
The complete equipment-leasing handbook : a deal maker's guide with forms, checklists, and worksheets
Author:
Contino, Richard M., 1941-
Personal Author:
Publication Information:
New York : AMACOM, [2002]

©2002
Physical Description:
xxi, 480 pages : forms ; 29 cm + 1 CD-ROM (4 3/4 in.)
General Note:
Includes indexes.
Language:
English
Added Corporate Author:
ISBN:
9780814406670
Format :
Book

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Summary

Summary

In this work, the equipment lease transaction is analyzed from start to finish, taking readers through the nine most important aspects. Also covered is the legal, financial, and business information needed to evaluate, negotiate, and document favourable equipment lease transactions.


Author Notes

Richard M. Contino, Esq., is an internationally known equipment financing expert, as well as practicing attorney, business consultant, and businessman. The author of several books on equipment leasing and business financing, he is the managing partner of Contino + Partners, in White Plains, New York


Table of Contents

Prefacep. xv
About the Authorp. xxi
Chapter 1 Fundamentals of Equipment Leasingp. 1
A Overviewp. 1
B Tax Motivations of Leasingp. 2
C Who Are the Prospective Lessees?p. 4
D Who Are the Potential Lessors?p. 4
E Types of Leasesp. 8
F Pros and Cons of Leasingp. 11
G When-to-Lease Checklistp. 16
H Checklist for Prospective Lessees Approaching Potential Lessorsp. 17
I Summaryp. 18
Chapter 2 The Proposal Stage--Where the Leasing Deal Is Madep. 19
A Overviewp. 19
B Obtaining Bids--The Request-for-Bids Letterp. 19
C What Is the Proposal Letter?p. 20
D What Issues Should the Proposal Letter Address?p. 22
E Agreement to the Proposal Letterp. 35
F Prospective Lessee's Obligations after a Proposal Is Acceptedp. 35
G Prospective Lessor's Obligations after a Proposal Is Acceptedp. 36
H Proposal Stage Checklist for the Lesseep. 36
I Proposal Stage Checklist for the Lessorp. 39
J Summaryp. 42
Chapter 3 Negotiating the Lease Documentp. 43
A What Is the Lease's Central Purpose?p. 43
B Common Lease Formsp. 43
C Subjects to Address in Negotiating the Leasep. 45
D Checklist for Drafting and Negotiating a Lease Agreementp. 75
E Summaryp. 80
Chapter 4 Closing the Lease Financingp. 81
A Overviewp. 81
B Legal Opinionsp. 81
C Financial Reportsp. 84
D Corporate Authorization Documentsp. 86
E Guaranteesp. 86
F Proof of Insurance Documentsp. 87
G Equipment Purchase Agreementsp. 87
H An Equipment Bill of Salep. 88
I Waivers from Land Owners or Mortgageesp. 88
J Security Interest Filingsp. 89
K Participation Agreementsp. 89
L Owner's Trust Agreementp. 89
M Lender's Trust Agreementp. 90
N Using a Partnership Instead of a Trust Arrangementp. 90
O Underwriter's Fee Agreementp. 90
P Supplemental Lease Document Closing Checklistp. 90
Q Summaryp. 93
Chapter 5 Tax Advantages in Lease Transactionsp. 95
A Investment Tax Creditp. 95
B Equipment Depreciation--An Overviewp. 96
C Property Eligible for MACRSp. 96
D MACRS Deduction Computationsp. 97
E Alternative MACRS Depreciation Approachp. 100
F Antiabuse Rules Under MACRSp. 102
G Special Depreciation Rules for Automobiles and Listed Propertyp. 102
H Recapturep. 103
I Expensingp. 103
J MACRS Effective Datesp. 103
K Bonus Depreciationp. 104
L Summaryp. 104
Chapter 6 The Minimum Tax's Role in Leasingp. 105
A Introductionp. 105
Part I The Corporate AMTp. 105
A Overviewp. 105
B The AMT's General Approachp. 106
Part II The Individual AMTp. 112
A Overviewp. 112
B Computing the Individual AMTp. 112
Part III The AMT Considerations for Leasingp. 114
A Working with the AMTp. 114
B Overviewp. 115
C The Deferral Effectp. 115
D The AMT and the Lesseep. 115
E The Lessor and the AMTp. 116
F Summaryp. 117
Chapter 7 How to Cope Successfully with the Tax Lease Rulesp. 119
A The True Leasep. 119
B Procedural Alternativesp. 120
C The Guidelinesp. 121
D Ruling Request Submission Requirementsp. 131
E Foundation Tax Rulesp. 132
F Potential Penaltiesp. 132
G Quick True Lease Checklistp. 133
H Summaryp. 134
Chapter 8 Advantages and Risks of Leveraged Leasing Decisionsp. 135
A What Is the Concept of Leveraged Leasing?p. 135
B Leveraged Lease Participants Have Unique Characteristicsp. 138
C How Different is the Leveraged Lease Document?p. 140
D Three Advantages to the Lessee in a Leveraged Leasep. 140
E Investment Pitfalls and Recommendations for Prospective Lessorsp. 141
F Checklist for the Leveraged Lease Investorp. 146
G Summaryp. 147
Chapter 9 Financial Analysis of Leasesp. 149
A Overviewp. 149
B Importance of Cash Flow and Timing for a Lesseep. 149
C Prospective Lessee's Analysisp. 150
D Lessor's Lease Investment Analysisp. 153
E Summaryp. 163
Chapter 10 Understanding the Lease Accounting Rulesp. 165
A Backgroundp. 165
B Lease Classifications for a Lessee Vary Significantly--A Careful Analysis Is Essentialp. 165
C Accounting Requirements Have an Impact on a Lesseep. 167
D Lease Classification Categories for a Lessor Are Extensivep. 167
E Lessor's Accounting Requirements Are Complexp. 169
F Accounting Rules Governing Sale-Leaseback Situationsp. 171
G Lease Classification Checklist for Lesseesp. 171
H Lease Classification Checklist for Lessorsp. 172
I Summary of Accounting Lease Classificationsp. 173
J Summaryp. 174
Chapter 11 The Business of Leasing Equipmentp. 175
A Overviewp. 175
B Key Profit Strategiesp. 175
C Making Money in the Leasing Businessp. 178
D Considerations for Setting Up a Leasing Operationp. 185
E Leasing Offers Equipment Vendors a Marketing Edgep. 189
F Summaryp. 192
Chapter 12 Equipment Leasing in International Marketsp. 193
A Overviewp. 193
B A Complex Market of Growthp. 193
C The Foreign Lessee Demandp. 194
D Advantages for Lessors Leasing Internationallyp. 194
E Risks of Operating in Foreign Marketsp. 195
F Local Law Considerationsp. 197
G International Lease Documentsp. 197
H Uniform International Lease Rulesp. 199
I Summaryp. 206
Chapter 13 The Equipment Leasing Laws under the Uniform Commercial Codep. 207
A Introductionp. 207
B UCC Article 2, Sales--An Overviewp. 208
C UCC Article 9, Secured Transactions; Sales of Accounts and Chattel Paper--An Overviewp. 208
D Equipment Leasing under UCC Article 2Ap. 208
E Summaryp. 215
Chapter 14 The Bankruptcy Rules for Leasingp. 217
A Introductionp. 217
B Bankruptcy Liquidation and Reorganizationp. 218
C Automatic Stayp. 219
D Equipment Lease Treatment in Bankruptcyp. 220
E Special Treatment for Aircraft, Railroad Rolling Stock, and Vesselsp. 221
F What Happens If the Lease Is Not a True Lease?p. 222
G Summaryp. 222
Chapter 15 Equipment Lease Terminologyp. 225
Formsp. 237
Acknowledgment Documents
Acknowledgment of Receipt of Certificate of Deposit a-01p. 239
Assignment Documents
Assignment of Certificate of Deposit a-02p. 240
Assignment of Savings Account and/or Stock Certificate a-03p. 243
Assignment of Lease to Lender--Single Takedown a-04p. 244
Assignment of Lease to Lender--Multiple Takedowns a-05p. 247
Assignment of Lease--Sale by Lessor (Limited Recourse) a-06p. 250
Assignment of Master Lease--Sale by Lessor Integrated (without Recourse) a-07p. 252
Assignment of Lease--Sale by Lessor (with Recourse) a-08p. 254
Assignment Amendment--Equipment Loan a-09p. 256
Assignment of Equipment Purchase Contract a-10p. 258
Assignment of Rights under Purchase Agreement--Integrated
Assignment of Purchase Contract Notification to Vendor a-11p. 261
Assignment of Purchase Contract--Consent by Vendor
Assumption Documents
Assumption Agreement a-12p. 262
Assumption Consent--Guarantor a-13p. 264
Amendment to Lease Documents
Amendment to Lease Agreement a-14p. 265
Bill of Sale Documents
Bill of Sale--Warranty b-01p. 266
Bill of Sale--"As Is, Where Is" b-02p. 267
Bill of Sale--Integrated
Casualty Value Schedules
Casualty Value Schedule
Certificates of Acceptance
Certificate of Acceptance
Checklists
Checklist--Lessee Proposal Stage c-01p. 268
Checklist--Lease Negotiation and Drafting c-02p. 268
Checklist--Lessor Proposal Stage c-03p. 268
Checklist--Supplemental Lease Document Closing c-04p. 268
Collection Documents
Collection Notification--Initial Lessee Nonpayment c-05p. 269
Collection Notification--Follow-up Lessee Nonpayment c-06p. 270
Collection Notification--Lawsuit c-07p. 271
Collection Notification--Repossession c-08p. 272
Corporate Secretary Certification Documents--Lessee
Certified Corporate Guarantor's Resolutions c-09p. 273
Certified Corporate Resolutions--Loan/Lease (with Incumbency Certification) c-10p. 274
Certified Corporate Resolutions--Loan (with Incumbency Certification) c-11p. 276
Certified Corporate Resolutions--Lease (with Incumbency Certification--Alternate Form) c-12p. 278
Certified Corporate Resolutions--Lease (with Chapter, By-Laws, Incumbency Certification) c-13p. 279
Certified Corporate Resolution--Short Form c-14p. 281
Certified Resolutions--Corporate--Integrated c-15p. 282
Certification of Incumbency c-16p. 283
Certification of Incumbency
Corporte Resolutions--Lessee
Corporate Guarantor's Resolutions
Corporate Resolutions--Loan/Lease (with Incumbency Certification)
Corporate Resolutions--Loan (with Incumbency Certification)
Corporate Resolutions--Lease (with Incumbency Certification--Alternative Form)
Corporate Resolutions--Lease (with Chapter, By-Laws, Incumbency Certification)
Corporate Resolution--Short Form
Deficiency Agreement Documents
Deficiency Agreement d-01p. 284
Equipment Schedules
Equipment Schedule
Guaranty Documents
Guaranty of Lease--Integrated g-01p. 286
Guaranty of Lease--Corporate g-02p. 288
Guaranty of Lease--Individual g-03p. 289
Guaranty--General Obligation g-04p. 290
Guaranty--Vendor g-05p. 294
Incumbency Documents
Incumbency Certificate
Incumbency Certificate
Insurance Documents
Insurance Request Letter to Lessee (from Lessor) i-01p. 298
Insurance Request to Insurance Company (from Lessee) i-02p. 299
Insurance Requirements Notice--Integrated (from Lessor) i-03p. 300
Landlord Waiver Documents
Landlord Waiver l-01p. 302
Lease Agreement Documents
Lease Agreement--Master (High Tech/General Equipment) l-02p. 303
Exhibit
A Equipment Schedule l-02ap. 316
Annex
A Certificate of Acceptance l-02bp. 320
B Casualty Value Schedule l-02cp. 321
C Termination Value Schedule l-02dp. 322
D Incumbency Certificate l-02ep. 323
E Certified Resolutions l-02fp. 324
F Opinion of Counsel l-02gp. 325
G Prohibited Lender Assignee Schedule l-02hp. 327
Lease Agreement--Short Form (General) l-03p. 328
Integrated Document Forms
Schedule l-03ap. 335
Exhibits
A Acceptance Certificate l-03bp. 337
B Casualty Value Table l-03cp. 339
Amendment to Lease Agreement
Automatic Transfer of Title
Insurance Request to Insurance Company (from Lessee)
Representation and Warranties l-03dp. 341
Opinion of Counsel--Lesp. 343
Opinion of Counsel--Guarantor Form l-03fp. 345
Purchase Right/Option--Fair Market Value
Purchase Right/Option--Fixed Price
Put
Renewal Right/Option--Fair Market Value
Renewal Right/Option--Fixed Price
Sublease Right/Option
Secretary's Certificate--Lessee Resolutions
Secretary's Certificate--Guarantor's Resolutions
Leveraged Lease Documents
Leveraged Lease (Aircraft/General) l-04p. 347
Integrated Document Forms
Assignment of Rights under Purchase Agreement l-04ap. 347
Participation Agreement l-04bp. 348
Trust Indenture and Security Agreement l-04cp. 348
Trust Agreement l-04dp. 349
Tax Indemnity Agreement l-04ep. 349
Loan Documents
Loan and Security Agreement--Short Form l-05p. 350
Loan and Security Agreement--Long Form (Railcars/General) l-06p. 355
Integrated Document Forms
Exhibits
A Form of Note l-06ap. 355
B Form of Guaranty l-06bp. 356
C Form of Bill of Sale l-06cp. 356
D Form of Certificate of Acceptance l-06dp. 356
E Form of Certificate of Cost l-06ep. 357
F Form of Legal Opinion--General l-06fp. 357
G Form of Legal Opinion--Special Counsel l-06gp. 357
Loan and Security Agreement--Master Format l-07p. 358
Integrated Document Forms
Exhibits
A Loan Supplement l-07ap. 377
B Promissory Note l-07bp. 381
C Acknowledgment and Consent to Assignment of Equipment Lease l-07cp. 383
D Supplement l-07dp. 386
Marketing Documents--Lessor
Credit Application m-01p. 387
Credit Guidelines--Small Ticket m-02p. 388
Financing Instructions--Small Ticket m-03p. 389
Financing Lease Rate Sheet--Small Ticket m-04p. 390
New Leasee Welcome Letter
Mortgage--Indemnity m-05p. 391
Operational Documents/Worksheets--Leasing Company
Bank Reference Worksheet o-01p. 396
Master Documentation Worksheet/Checklist o-02p. 397
New Lessee Welcome Letter o-03p. 400
Tax Notification--Personal Property o-04p. 401
Trade Reference Worksheet/Report o-05p. 402
Transaction Summary Worksheet o-06p. 403
Transaction Worksheet/Checklist o-07p. 405
Verification and Audit Worksheet o-08p. 407
Opinions of Counsel
Opinion of Counsel--Integrated
Options/Rights--Lessee
Early Termination Right/Option o-09p. 408
Annex
A Termination Value Tablep. 409
Purchase Right/Option--Fair Market Value/Fixed o-10p. 411
Purchase Right/Option--Fair Market Value o-11p. 412
Purchase Right/Option--Fixed Price o-12p. 414
Renewal Right/Option--Fair Market Value o-13p. 415
Renewal Right/Option--Fixed Price o-14p. 417
Sublease Right/Option o-15p. 418
Options/Rights--Lessor
Automatic Transfer of Title o-16p. 419
Put o-17p. 420
Participation Agreement Document
Participation Agreement--Integrated (Leveraged Lease)
Prohibited Lender Assignee Schedule
Prohibited Lender Assignee Schedule
Promissory Note Documents
Promissory Note--General Form p-01p. 421
Promissory Note--Integrated p-02p. 423
Promissory Note--Integrated
Promissory Note--Integrated
Promissory Note--Confessed Judgment p-03p. 425
Proposal Documents--Lessor
Single Investor (Nonunderwritten) p-04p. 427
Underwritten p-05p. 429
Purchase Agreement/Assignment
Purchase Agreement Rights Assignment--Integrated
Purchase Agreement Assignment--Integrated p-06p. 432
Purchase Order Documents
Purchase Order--Equipment p-07p. 435
Resolutions--Corporate Lessee
Request for Lease Quotations
RFQ--Deal Sheet Format r-01p. 438
RFQ--Informal r-02p. 440
RFQ--Long Form r-03p. 442
RFQ--Short Form r-04p. 447
Schedules--Equipment
Equipment Schedule
Security Agreements
Secretary's Certificates
Subordination Agreements
Lessee Creditor s-01p. 449
Termination Value Schedules
Termination Value Schedule
Time Tables
Time Table--Deal Schedule t-01p. 450
Tax Indemnity Documents
Tax Indemnity Agreement
Trust Documents
Trust Agreement
Trust Indenture and Security Agreement Documents
Trust Indenture and Security Agreement
Vendor Agreement Documents
Program Agreement v-01p. 452
Remarketing Agreement v-02p. 456
Worksheets
Worksheet/Report--Lease Proposal Evaluation w-01p. 469
Worksheet--Trade Reference
Worksheet--Transaction Summary
Worksheet/Checklist--Transaction
Worksheet--Verification and Audit
Subject Indexp. 471
Forms Indexp. 477