Rapid Prototyping Equipment Financing
Documenting The Formal Structure Of A Lease
NCP leases consist of more than one document. The master lease agreement sets out the terms and conditions. The key concept in a lease agreement is that it is triple net, by which we mean the lease costs do not include any taxes, insurance and maintenance fees. These expenses must be borne by the lessee. A schedule adds to the master agreement specifics associated with a particular asset, including the term of the lease and the payment amount.
The acceptance certificate is the lessee's acknowledgement that the equipment has been delivered and accepted within the terms of the lease. It is the formality that marks the inception of the lease term and it ties the equipment to the master lease and the schedule.
The landlord's waiver is a document that makes it clear that any leased equipment is owned by the lessor, even if it is installed in a way that secures it to the structure. This document addresses a general rule in law that can give the owner of a building permanent rights to things affixed to that building simply because the fixtures are attached to a structure. The lessee's landlord must waive any claim to the leased equipment.
The secured lender's waiver is a document signed by any outside party (such as a bank) that has a general first lien on the lessee's assets. Basically, it is an acknowledgement by a lender other than the lessor that the leased asset is not the lessee's asset and not the lender's asset and that rights in the equipment are not subject to any claims made against the lessee except by the lessor.
The certificate of insurance is a declaration by the lessee's insurance company that the leased equipment is properly and fully insured. The risks covered by the insurance protect the lessor from damage to the equipment as well as damage that might be caused to people or to property by the equipment. A single insurance policy or coverage under a more comprehensive policy held and paid for by the lessee protects both the lessee and the lessor.
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