UCC Supporting Obligations Language - Equipment Loan Personal Guarantees

That's helpful - so I don't need to spell out each guarantee agreement individually? The loan docs have pretty standard personal guarantee language from both LLC members.

Exactly. The broad language captures everything without creating potential gaps if guarantee terms change later. Just make sure your loan agreement properly defines what constitutes supporting obligations.

The maintenance agreement is part of the overall equipment lease package, so I think it should qualify. But you're right that I should verify the connection to the primary obligation.

Good point about the maintenance agreement. If it's truly independent, including it in the UCC might not give you the perfection you think you're getting.

Exactly - and if there's any doubt, you might want to file a separate UCC-1 for the maintenance agreement obligations or structure it differently in your loan documents.

Interesting - I hadn't heard of that tool. How does it work exactly? Just upload the documents and it checks for consistency?

Yeah, you upload your UCC-1 and the related loan docs, and it automatically flags potential mismatches or gaps in coverage. Really saved me from a filing that might have had perfection issues.

That sounds like it could be useful for complex deals. I usually just do manual review but with multiple guarantees and ancillary agreements, automated checking might catch things I miss.

That makes sense. I think I was getting too caught up in trying to describe every possible obligation instead of using the standard broad language.

Broad language is usually better. You don't want to accidentally exclude something by being too specific in the UCC filing.

Good point - this is filing in Texas, so I should probably check if they have any specific guidance on supporting obligations language.

Texas generally follows standard UCC principles for supporting obligations, but their filing guide has some helpful examples that might be relevant to your situation.

Texas is pretty straightforward on this. The standard "all supporting obligations" language should work fine for your equipment deal.

Cross-guarantees can definitely be supporting obligations if they're securing the same primary debt. The key is the relationship to the underlying obligation.

Thanks - that's what I thought but wanted to confirm. The structure is pretty straightforward with each entity guaranteeing the others' obligations under the same credit facility.

Can you elaborate on that? I want to make sure I'm not creating any unintended consequences with the supporting obligations language.

Sure - if you use very broad language like "all obligations" without limiting it to obligations related to your transaction, you might inadvertently claim rights to unrelated debts or obligations. That's why "supporting obligations" is better than just "all obligations.

This is another reason why document verification tools are helpful - they can flag when your UCC language might be broader than what your loan agreement actually covers.

That's reassuring. I think I was overcomplicating this because it's a larger deal than I usually handle, but the principles should be the same.

Exactly - the dollar amount doesn't change the basic UCC principles. Standard supporting obligations language works for deals of all sizes.

Good reminder - I'll double-check that our loan agreement and UCC-1 are using consistent terminology for the supporting obligations.

Consistency between documents is crucial. Any discrepancies can create problems if you ever need to enforce your security interest.

I learned this the hard way on a deal where our UCC was more restrictive than our loan agreement. Created a real headache when we needed to realize on the collateral.

That's sound advice. I'll go with the standard approach and save the creativity for other aspects of the deal structure.

Exactly - UCC filings are not the place to reinvent the wheel. Use language that's been proven to work.

This is just a single-state filing, but that's a great point for future deals. Consistency across multiple filings would be important.

Yeah, it's easy to overlook when you're dealing with multiple state requirements, but having consistent language helps avoid confusion later.

I use a standard template for all my multi-state filings to avoid exactly this issue. Supporting obligations language is one of the key things to keep consistent.