UNL FINA 361 FINAL EXAM UPDATED
PRACTICE SOLUTION BUNDLED REVIEW
SHEET TESTED ANSWERS
⩥ What are some requirements for a guarantee agreement
(personal/corporate)?.
Answer: (a) CONSIDERATION - (i.e. VALUE) of some sort to the
proposed guarantor in order to make their agreement enforceable (b)
AUTHORITY OF GUARANTEE - an authorization should be obtained
to demonstrate authority of parties signing (c) SPECIFY that the
obligation is guaranteed - specify that GUARANTEE IS OF
PERFORMANCE, not collection and guarantor is liable for any
obligations (d) WAIVER OF SURETY SHIP DEFENSES - obligations
of the guarantor are not subject to some traditional defenses to
guaranties. Guaranty is absolutely enforceable (e) INTEGRATE LEASE
PROVISIONS - include attorney fee/recovery expense, jurisdiction and
venue, etc.
⩥ Real Estate Waiver.
Answer: This document is the acknowledgement of an owner or
mortgagee of real property that the leased equipment belongs to the
lessor and can be removed.
⩥ Landlord's Waiver.
,Answer: A document in which a landlord acknowledges that certain
property on the premises is being leased by a tenant but is owned by a
3rd party and the landlord agrees to recognize and not interfere with the
lessors rights to their property.
⩥ Fixture Filing.
Answer: A filing similar to a UCC-1, used if equipment being leased can
be defined as part of the real estate, provides notice to 3rd parties of
lessor's ownership interest in the equipment. Filed in the county where
the equipment is located. Should preserve the lessor's right to the
equipment.
⩥ Purchase Order.
Answer: Issued by a lessor indicating it will purchase equipment from
the vendor upon fulfillment of certain conditions by the vendor and
lessee.
⩥ What are the two UCC forms related to financing?.
Answer: UCC forms are filed in the state where the debtor is
incorporated to preserve priority lien rights of the creditor and to provide
notice to inquiring parties of a creditor's interest in the equipment. UCC-
1 (good for 5 years) is basic form of financing statement, UCC-3 is the
amendment/termination form.
⩥ What is tax indemnity?.
, Answer: Lessee reimburses lessor for any loss incurred as the result of
the tax treatment of an operating lease.
⩥ Delivery and Acceptance Certificate.
Answer: Proves that lessor delivered possession of the equipment to
lessee. Lessee signs after equipment inspection verifying that the
equipment is fully functional (unconditional acceptance is required
under UCC Article 2A).
⩥ Standard Lease Agreement.
Answer: An agreement only governing one lease transaction.
⩥ Plain Language Agreement.
Answer: An agreement written to be easily understood without
legalease.
⩥ Name 3 common lease contracts.
Answer: (a) standard lease agreement (b) master lease agreement (c)
plain language agreement.
⩥ When would "Additional Collateral" need to be leveraged?.
Answer: To enhance the credit profile of an applicant by taking interest
in additional assets through a security agreement, may need
subordination from other creditors.
PRACTICE SOLUTION BUNDLED REVIEW
SHEET TESTED ANSWERS
⩥ What are some requirements for a guarantee agreement
(personal/corporate)?.
Answer: (a) CONSIDERATION - (i.e. VALUE) of some sort to the
proposed guarantor in order to make their agreement enforceable (b)
AUTHORITY OF GUARANTEE - an authorization should be obtained
to demonstrate authority of parties signing (c) SPECIFY that the
obligation is guaranteed - specify that GUARANTEE IS OF
PERFORMANCE, not collection and guarantor is liable for any
obligations (d) WAIVER OF SURETY SHIP DEFENSES - obligations
of the guarantor are not subject to some traditional defenses to
guaranties. Guaranty is absolutely enforceable (e) INTEGRATE LEASE
PROVISIONS - include attorney fee/recovery expense, jurisdiction and
venue, etc.
⩥ Real Estate Waiver.
Answer: This document is the acknowledgement of an owner or
mortgagee of real property that the leased equipment belongs to the
lessor and can be removed.
⩥ Landlord's Waiver.
,Answer: A document in which a landlord acknowledges that certain
property on the premises is being leased by a tenant but is owned by a
3rd party and the landlord agrees to recognize and not interfere with the
lessors rights to their property.
⩥ Fixture Filing.
Answer: A filing similar to a UCC-1, used if equipment being leased can
be defined as part of the real estate, provides notice to 3rd parties of
lessor's ownership interest in the equipment. Filed in the county where
the equipment is located. Should preserve the lessor's right to the
equipment.
⩥ Purchase Order.
Answer: Issued by a lessor indicating it will purchase equipment from
the vendor upon fulfillment of certain conditions by the vendor and
lessee.
⩥ What are the two UCC forms related to financing?.
Answer: UCC forms are filed in the state where the debtor is
incorporated to preserve priority lien rights of the creditor and to provide
notice to inquiring parties of a creditor's interest in the equipment. UCC-
1 (good for 5 years) is basic form of financing statement, UCC-3 is the
amendment/termination form.
⩥ What is tax indemnity?.
, Answer: Lessee reimburses lessor for any loss incurred as the result of
the tax treatment of an operating lease.
⩥ Delivery and Acceptance Certificate.
Answer: Proves that lessor delivered possession of the equipment to
lessee. Lessee signs after equipment inspection verifying that the
equipment is fully functional (unconditional acceptance is required
under UCC Article 2A).
⩥ Standard Lease Agreement.
Answer: An agreement only governing one lease transaction.
⩥ Plain Language Agreement.
Answer: An agreement written to be easily understood without
legalease.
⩥ Name 3 common lease contracts.
Answer: (a) standard lease agreement (b) master lease agreement (c)
plain language agreement.
⩥ When would "Additional Collateral" need to be leveraged?.
Answer: To enhance the credit profile of an applicant by taking interest
in additional assets through a security agreement, may need
subordination from other creditors.
