Reflection on Loan Options for Spencer

What should Spencer do if he decides to move forward with the loan for the temporary employee agency?

a. Spencer should only request a cross-default provision because article 9 makes cross-collateralization provisions unenforceable.
b. Spencer should request a guarantee from a solvent person or entity because article 9 makes both cross-default and cross-collateralization provisions illegal.
c. Spencer should only request a cross-collateralization provision because article 9 makes cross-default provisions unenforceable.
d. Spencer should request a cross-default provision and also a cross-collateralization provision.

Final answer:

If Spencer decides to go forward with the loan involving the temporary employee agency, he should request a cross-default provision and also a cross-collateralization provision.

Explanation:

If Spencer decides to go forward with the loan involving the temporary employee agency, he should request a cross-default provision and also a cross-collateralization provision.

A cross-default provision allows the lender to declare a default on the loan if the borrower defaults on any other loan or financial obligation. This ensures that if Berry defaults on the shopping center loan, it would trigger a default on the loan for the temporary employee agency as well.

A cross-collateralization provision allows the lender to use the collateral from one loan to secure another loan. In this case, Spencer can use the office equipment offered as collateral for the temporary employee agency loan to secure both loans, making it a safer option for the bank.