Equipment Lease Agreement - Florida (UCC Article 2A)

EQUIPMENT LEASE AGREEMENT - FLORIDA

Master equipment lease drafted under the Florida Uniform Commercial Code, Article 2A (Fla. Stat. Ch. 680), incorporating Florida-specific provisions on finance leases, sales and use tax on tangible personal property leases (Fla. Stat. § 212.05(1)(c)), pre-judgment replevin (Fla. Stat. Ch. 78), Florida's hurricane/force majeure considerations, and Florida's 4-year statute of limitations for Article 2A actions (Fla. Stat. § 680.506).

EQUIPMENT LEASE AGREEMENT

This Equipment Lease Agreement (this "Lease") is made and entered into as of [__/__/____] (the "Effective Date") between:

LESSOR: [________________________________], a [________________________________] with its principal place of business at [________________________________] ("Lessor"); and

LESSEE: [________________________________], a [________________________________] with its principal place of business at [________________________________] ("Lessee").

The Lessor and Lessee are sometimes referred to as a "Party" and collectively as the "Parties."

1. DEFINITIONS

1.1 "Equipment" means the tangible personal property described on Schedule 1, together with all accessories, attachments, replacements, additions, repairs, and documentation.

1.2 "Equipment Location" means the address specified on Schedule 1 at which the Equipment will be kept. The initial Equipment Location is in [________________________________] County, Florida, unless otherwise specified. Relocation outside the State of Florida requires Lessor's prior written consent.

1.3 "Finance Lease" has the meaning given in Fla. Stat. § 680.103(1)(g) (a lease in which (i) the Lessor does not select, manufacture, or supply the Equipment; (ii) the Lessor acquires the Equipment in connection with the lease; and (iii) Lessee has received a copy of or approved the supply contract).

1.4 "Fair Market Value" means the price that would be paid for the Equipment at the Equipment Location, in an arm's-length transaction between an informed, willing buyer under no compulsion to buy, and an informed, willing seller under no compulsion to sell.

1.5 "Lease Term" means the period from the Commencement Date through the Expiration Date specified on Schedule 1.

1.6 "Rent" means the periodic rent payments set forth on Schedule 1, together with all other amounts payable by Lessee hereunder.

2. LEASE OF EQUIPMENT

2.1 Lease Grant. Subject to the terms and conditions of this Lease, Lessor hereby leases the Equipment to Lessee and Lessee hereby leases the Equipment from Lessor.

2.2 True Lease; Statement of Intent. The Parties intend this Lease to be a "true lease" under the Internal Revenue Code and the Florida UCC, not a sale or disguised security interest. Title to the Equipment shall at all times remain in Lessor. Lessee has no equitable interest in the Equipment except as expressly set forth herein. Notwithstanding the foregoing, if a court of competent jurisdiction reclassifies this Lease as a security agreement under Fla. Stat. § 671.203, Lessee hereby grants Lessor a security interest in the Equipment as collateral for all of Lessee's obligations under this Lease, and Lessor may file UCC-1 financing statements with the Florida Secured Transaction Registry under Fla. Stat. §§ 679.5011-679.5161 to perfect such security interest.

2.3 Finance Lease Designation (Optional). ☐ Check if this is a Finance Lease. If checked, Lessee acknowledges that Lessor is not the manufacturer or supplier of the Equipment; Lessee has selected the Equipment and the Supplier ([________________________________]); Lessee has received and approved the Supply Contract; and the warranty and hell-or-high-water provisions of Fla. Stat. §§ 680.209, 680.211, 680.407 apply, including that Lessee's obligations become irrevocable and independent upon acceptance of the Equipment (hell-or-high-water clause, § 680.407).

3. TERM

3.1 Commencement Date: [__/__/____]
3.2 Expiration Date: [__/__/____]
3.3 Minimum Lease Term: [____] months
3.4 Renewal. This Lease may be renewed by mutual written agreement. Lessee has [no / optional] right to renew.
3.5 Holdover. Any holdover after the Expiration Date without Lessor's written consent constitutes a month-to-month tenancy at 150% of the monthly Rent, without waiver of Lessor's right to recover possession.

4. RENT AND OTHER PAYMENTS

4.1 Rent Amount. Lessee shall pay Rent in the amounts and on the dates set forth on Schedule 1. Rent is payable in advance, without notice, setoff, counterclaim, deduction, or defense.

4.2 Payment Method. Rent is payable by ACH or wire transfer to Lessor's designated account. Time is of the essence.

4.3 Late Charges. Any Rent payment not received within [____] days of the due date bears a late charge of 5% of the overdue amount or $[____________], whichever is greater, plus interest at the lesser of (a) 1.5% per month, or (b) the maximum rate permitted by Fla. Stat. § 687.02 (18% per annum for general contracts under $500,000; maximum under § 687.03 for other transactions). In no event shall late charges or interest exceed Florida usury limits under Fla. Stat. Ch. 687.

4.4 Florida Sales and Use Tax. Under Fla. Stat. § 212.05(1)(c), the lease or rental of tangible personal property in Florida is subject to Florida sales and use tax (currently 6% state, plus any applicable discretionary sales surtax under § 212.054, which varies by Florida county). Lessee is responsible for all Florida sales and use tax on Rent and other payments under this Lease, which Lessor will collect and remit to the Florida Department of Revenue unless Lessee provides a valid Florida resale or exemption certificate.

4.5 Property Tax. Lessee shall pay all ad valorem taxes on the Equipment assessed by any Florida county property appraiser under Fla. Stat. Ch. 193. Lessee shall file the annual tangible personal property tax return (DR-405) by April 1 each year with the applicable county property appraiser or reimburse Lessor for doing so.

4.6 Other Charges. Lessee shall pay all other fees, charges, assessments, and costs related to the Equipment, including delivery, installation, service, and disposition charges.

5. DELIVERY, INSPECTION, AND ACCEPTANCE

5.1 Delivery. Lessor shall deliver the Equipment to the Equipment Location on or before [__/__/____]. Risk of loss passes to Lessee upon delivery.

5.2 Inspection Period. Lessee shall have [____] business days after delivery to inspect the Equipment and either accept or reject it under Fla. Stat. § 680.515. Failure to reject within the inspection period constitutes acceptance.

5.3 Acceptance Certificate. Upon acceptance, Lessee shall execute and deliver an Acceptance Certificate substantially in the form of Schedule 2. Lessee's execution of the Acceptance Certificate is conclusive evidence of acceptance, and upon acceptance, Lessee's obligation to pay Rent and all other amounts becomes absolute, unconditional, and irrevocable under Fla. Stat. § 680.407 (if a Finance Lease).

6. USE, MAINTENANCE, AND REPAIRS

6.1 Permitted Use. Lessee shall use the Equipment only for its intended business purpose, in accordance with the manufacturer's specifications, and in compliance with all federal, state, and local laws, including Florida Department of Environmental Protection regulations, OSHA, and any applicable Florida Department of Agriculture and Consumer Services rules.

6.2 Maintenance. Lessee shall, at its sole expense, maintain the Equipment in good operating condition, ordinary wear and tear excepted. Lessee shall promptly repair any damage and shall keep the Equipment free of all liens and encumbrances, including mechanics' liens under Fla. Stat. § 713.58 (lien for labor or services on personal property).

6.3 Alterations. Lessee shall not make alterations, additions, or modifications to the Equipment without Lessor's prior written consent, except for normal service adjustments.

6.4 Equipment Location; No Relocation. Lessee shall keep the Equipment at the Equipment Location and shall not move it without Lessor's prior written consent. If the Equipment is to be moved to another location in Florida, Lessor may require amended UCC-1 filings.

7. INSURANCE

7.1 Required Coverage. Lessee shall, at its sole expense, maintain:

a. Commercial General Liability Insurance with limits of not less than $[1,000,000] per occurrence and $[2,000,000] aggregate;

b. Property Insurance covering the Equipment on an "all risk" basis for its full replacement cost, including windstorm and named storm coverage (which is particularly important in Florida given hurricane exposure);

c. Florida Workers' Compensation Insurance as required by Fla. Stat. Ch. 440 for all employees working with the Equipment (with the thresholds depending on whether operations are construction or non-construction); and

d. Automobile Liability Insurance if the Equipment is a motor vehicle (minimum Florida limits under Fla. Stat. § 324.021).

7.2 Lessor as Additional Insured / Loss Payee. All policies must name Lessor as additional insured and loss payee, waive subrogation against Lessor, and provide 30 days' prior written notice of cancellation.

7.3 Evidence of Insurance. Lessee shall provide certificates of insurance prior to delivery and upon renewal. Failure to maintain insurance is a material default.

8. WARRANTIES

8.1 LESSOR DISCLAIMER (NON-FINANCE LEASE). EXCEPT AS EXPRESSLY SET FORTH HEREIN, LESSOR LEASES THE EQUIPMENT "AS IS, WHERE IS, WITH ALL FAULTS" AND MAKES NO WARRANTIES, EXPRESS OR IMPLIED, AND SPECIFICALLY DISCLAIMS THE IMPLIED WARRANTIES OF MERCHANTABILITY (Fla. Stat. § 680.212), FITNESS FOR A PARTICULAR PURPOSE (Fla. Stat. § 680.213), AND NON-INFRINGEMENT. THIS DISCLAIMER IS "CONSPICUOUS" WITHIN THE MEANING OF FLA. STAT. § 671.201(10).

8.2 FINANCE LEASE WARRANTIES (IF APPLICABLE). If this is a Finance Lease, Lessor makes no warranties, and Lessee's warranty rights run directly against the Supplier of the Equipment pursuant to Fla. Stat. § 680.209. Lessee shall look solely to the Supplier for any warranty claims, and Lessee's obligations to Lessor are absolute and unconditional (hell-or-high-water) under Fla. Stat. § 680.407, independent of any warranty dispute with the Supplier.

9. LIMITATION OF LIABILITY

TO THE MAXIMUM EXTENT PERMITTED BY FLORIDA LAW, LESSOR'S AGGREGATE LIABILITY UNDER THIS LEASE, REGARDLESS OF THE FORM OF ACTION, SHALL NOT EXCEED THE TOTAL RENT PAID BY LESSEE UNDER THIS LEASE IN THE TWELVE (12) MONTHS PRECEDING THE CLAIM. IN NO EVENT SHALL LESSOR BE LIABLE FOR CONSEQUENTIAL, INCIDENTAL, INDIRECT, SPECIAL, OR PUNITIVE DAMAGES, INCLUDING LOST PROFITS, LOST REVENUE, OR BUSINESS INTERRUPTION, EVEN IF ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. THIS LIMITATION APPLIES NOTWITHSTANDING ANY FAILURE OF ESSENTIAL PURPOSE UNDER FLA. STAT. § 680.503(4).

10. INDEMNIFICATION

Lessee shall indemnify, defend, and hold harmless Lessor, its affiliates, officers, directors, employees, and agents from any claims, damages, losses, liabilities, and expenses (including reasonable attorney's fees) arising from or relating to (a) Lessee's use, possession, operation, or return of the Equipment; (b) Lessee's breach of this Lease; (c) any bodily injury, property damage, or environmental contamination caused by or connected with the Equipment; and (d) any violation of applicable law. This indemnity survives termination of the Lease.

11. DEFAULT

11.1 Events of Default. Each of the following constitutes an "Event of Default" under this Lease and Fla. Stat. § 680.5011:

a. Failure to pay Rent or other amounts when due, and such failure continues for [____] days;
b. Failure to perform any other obligation under this Lease, and such failure continues for [____] days after notice;
c. Breach of any representation or warranty;
d. Insolvency or assignment for the benefit of creditors; provided that a bankruptcy filing or appointment of a trustee, custodian, or receiver is not by itself an enforceable termination or default trigger to the extent prohibited by 11 U.S.C. § 365 or other applicable law;
e. Dissolution, liquidation, or cessation of business;
f. Loss, theft, or destruction of the Equipment (except to the extent covered by insurance);
g. Unauthorized relocation of the Equipment;
h. Failure to maintain required insurance;
i. Cross-default with any other agreement between Lessor and Lessee.

11.2 Remedies. Upon an Event of Default, Lessor may, without further notice, exercise any one or more of the following remedies under Fla. Stat. §§ 680.5231-680.5311:

a. Declare this Lease and all other agreements in default;
b. Accelerate all future Rent and other amounts payable under this Lease, with such amounts discounted to present value at a rate of [____]% per annum;
c. Repossess the Equipment without notice and without judicial process, so long as repossession can be accomplished without breach of the peace, pursuant to Fla. Stat. § 680.525;
d. File a replevin action under Fla. Stat. Ch. 78, including pre-judgment replevin under § 78.068;
e. Sell, lease, or otherwise dispose of the Equipment under Fla. Stat. § 680.527 and apply the proceeds to Lessee's obligations;
f. Recover damages under Fla. Stat. § 680.5281 or § 680.5291, including the present value of unpaid Rent, the Equipment's residual value, and incidental damages;
g. Recover liquidated damages under Fla. Stat. § 680.504, to the extent permitted;
h. Cancel this Lease;
i. Recover reasonable attorney's fees and costs under the contractual fee provision (reciprocal under Fla. Stat. § 57.105(7)).

11.3 Cumulative Remedies. Lessor's remedies are cumulative and may be exercised concurrently or separately. Lessor's exercise of one remedy does not preclude the exercise of another.

12. RETURN OF EQUIPMENT

Upon expiration or earlier termination, Lessee shall, at Lessee's sole expense, return the Equipment to Lessor at a location in Florida designated by Lessor, in the condition required by Section 6 above. If Lessee fails to return the Equipment, Lessee shall pay holdover rent and Lessor may exercise the default remedies.

13. FORCE MAJEURE (INCLUDING HURRICANES)

Neither Party shall be liable for any delay or failure to perform (other than payment of money) caused by events beyond its reasonable control, including (a) hurricanes, tropical storms, and named storms (a frequent Florida consideration); (b) floods, fires, earthquakes, and other natural disasters; (c) acts of God; (d) war, terrorism, civil unrest, and government orders; (e) epidemics and pandemics; (f) strikes and labor disputes; and (g) interruption of utilities or communications. The affected Party must notify the other within [____] days of the force majeure event. Force majeure does not excuse Lessee's obligation to pay Rent. Lessee should obtain insurance to protect against such events, particularly named-storm coverage as required in Section 7.

14. TAX INDEMNITY

Lessee acknowledges that Lessor has entered into this Lease in reliance on the tax characterization as a "true lease" with Lessor entitled to all tax benefits, including depreciation. If any tax authority reclassifies the Lease, Lessee shall indemnify Lessor for any loss of tax benefits, consistent with Fla. Stat. Ch. 212 (Florida sales tax) and § 196.183 (tangible personal property tax exemption thresholds).

15. ASSIGNMENT

15.1 Lessee. Lessee shall not assign, transfer, sublease, or otherwise dispose of the Lease or the Equipment without Lessor's prior written consent, which may be withheld in Lessor's sole discretion.

15.2 Lessor. Lessor may assign this Lease, in whole or in part, without Lessee's consent. Upon notice of assignment, Lessee shall pay Rent directly to the assignee and shall not assert against the assignee any claim or defense Lessee may have against Lessor (waiver of defenses against assignee under Fla. Stat. § 680.303(4)).

16. GOVERNING LAW AND DISPUTE RESOLUTION

16.1 Governing Law. This Lease is governed by and construed under the laws of the State of Florida, without regard to conflict-of-laws principles, including the Florida UCC as codified at Fla. Stat. Chs. 670-680.

16.2 Venue. Exclusive venue for any action arising from this Lease is the Circuit Court in and for [________________________________] County, Florida, or the United States District Court for the [________________________________] District of Florida. Each Party irrevocably consents to personal jurisdiction and venue in such courts and waives any objection based on inconvenient forum.

16.3 JURY TRIAL WAIVER. EACH PARTY KNOWINGLY AND VOLUNTARILY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION ARISING FROM OR RELATING TO THIS LEASE. This waiver is enforceable under Florida law as a knowing, voluntary, and intentional waiver. Bombardier Capital, Inc. v. Progressive Mktg. Grp., Inc., 801 So. 2d 131 (Fla. 4th DCA 2001).

16.4 Statute of Limitations. Actions arising from this Lease under the Florida UCC Article 2A must be brought within four (4) years of accrual, as provided in Fla. Stat. § 680.506. Parties may not extend this period by agreement beyond the statute.

16.5 Attorney's Fees. In any action arising from this Lease, the prevailing party is entitled to recover reasonable attorney's fees and costs, consistent with Fla. Stat. § 57.105(7) (reciprocal enforcement).

17. MISCELLANEOUS

17.1 Notices. All notices shall be in writing and delivered to the addresses set forth above by (a) personal delivery; (b) overnight courier; (c) certified mail, return receipt requested; or (d) email with confirmation.

17.2 Entire Agreement; Amendment. This Lease and the attached Schedules constitute the entire agreement between the Parties and supersede all prior understandings. Amendments must be in writing and signed by both Parties.

17.3 Severability; Blue Pencil. If any provision is held unenforceable, it shall be modified to the minimum extent necessary to render it enforceable.

17.4 Counterparts; Electronic Signatures. This Lease may be executed in counterparts and by electronic signature under Fla. Stat. § 668.50 (Florida UETA) and 15 U.S.C. § 7001 (federal E-SIGN).

17.5 No Waiver. No waiver of any provision is effective unless in writing signed by the waiving Party.

17.6 Time of the Essence. Time is of the essence for all obligations under this Lease.

17.7 Interpretation. Section headings are for convenience only and do not affect interpretation. The Parties have participated jointly in drafting, and no presumption of construction against the drafter applies.

18. EXECUTION

LESSOR: [________________________________]

By: [________________________________]
Name: [________________________________]
Title: [________________________________]
Date: [__/__/____]

LESSEE: [________________________________]

By: [________________________________]
Name: [________________________________]
Title: [________________________________]
Date: [__/__/____]

SCHEDULE 1 - EQUIPMENT AND RENT

Equipment Location: [________________________________] County, Florida
Commencement Date: [__/__/____]
Expiration Date: [__/__/____]
Lease Term: [____] months
Monthly Rent: $[____________]
Security Deposit: $[____________]
First Payment Due: [__/__/____]
Sales/Use Tax Rate: [____]% (state 6% + [County] discretionary surtax [____]%)

SCHEDULE 2 - ACCEPTANCE CERTIFICATE

Lessee, [________________________________], hereby acknowledges that the Equipment described on Schedule 1 has been delivered to the Equipment Location, inspected, and found to be in good condition and acceptable in all respects. Lessee unconditionally accepts the Equipment for all purposes of the Lease, and Lessee's obligation to pay Rent and all other amounts under the Lease is hereby unconditional and absolute pursuant to Fla. Stat. § 680.407 (if a Finance Lease).

Acceptance Date: [__/__/____]

Lessee: [________________________________]
By: [________________________________]

Sources and References

• Fla. Stat. Ch. 680 - Florida Uniform Commercial Code Article 2A (Leases)
• Fla. Stat. § 680.103 - Definitions (finance lease, consumer lease)
• Fla. Stat. § 680.209 - Finance lease warranties
• Fla. Stat. § 680.212 - Implied warranty of merchantability
• Fla. Stat. § 680.213 - Implied warranty of fitness
• Fla. Stat. § 680.407 - Hell-or-high-water clause (finance lease)
• Fla. Stat. § 680.504 - Liquidation of damages
• Fla. Stat. § 680.506 - Statute of limitations (4 years)
• Fla. Stat. §§ 680.5011-680.5311 - Default and remedies
• Fla. Stat. § 680.525 - Right to possession
• Fla. Stat. § 680.527 - Disposition of goods
• Fla. Stat. § 212.05 - Sales and use tax on leases
• Fla. Stat. § 212.054 - Discretionary sales surtax
• Fla. Stat. Ch. 193 - Tangible personal property tax
• Fla. Stat. § 713.58 - Liens on personal property
• Fla. Stat. Ch. 78 - Replevin
• Fla. Stat. § 78.068 - Pre-judgment replevin
• Fla. Stat. Ch. 440 - Workers' Compensation
• Fla. Stat. § 668.50 - Florida UETA
• Fla. Stat. § 687.02 - Usury
• Fla. Stat. § 57.105(7) - Reciprocal attorney's fees
• Bombardier Capital, Inc. v. Progressive Mktg. Grp., Inc., 801 So. 2d 131 (Fla. 4th DCA 2001)