Drafting Equipment Leases: UCC Article 2A Compliance, Minimizing Risk Through Key Provisions and Clarity
Recording of a 90-minute CLE webinar with Q&A
This CLE webinar will discuss the pros and cons of equipment leasing and guide counsel in structuring, drafting, analyzing, and negotiating effective commercial equipment leases. The panel will discuss UCC Article 2A considerations, the implications of re-characterization as a sale or a security interest, and important clauses and drafting suggestions to facilitate a lease that best serves the business purposes of the parties.
- Examples of equipment leases and financings
- Rental agreements
- Equipment financings; leases (leases and non-leases), installment sale/financing agreements, etc.
- Vendor financings; “bundled transactions”, MES and tech solutions financings, etc.
- Lessor and lessee business considerations
- Lessor – economic/pricing (including certainty of payment), credit, syndication/capital markets, collateral and residual related, avoidance of liability, regulatory compliance, market considerations, etc.
- Lessee – cost, operational flexibility, obsolescence and other value risks, accounting and tax treatment, compliance with organizational documents and lending and other contract restrictions, etc.
- Applicable law
- Characterization; is it a true “lease”?
- True leases vs. non-true leases; why it matters.
- Other Legal considerations
- Other commercial law (UCC Articles 1, 2 and 9), contract and general corporate law
- Federal, state and local tax laws
- Regulatory considerations; including, related to lessor/financier, customer, equipment, economic terms, etc.
- Tort law
- IP, environmental, insurance, dispute resolution, securities, etc.
- Lease drafting considerations
- Equipment description, delivery and acceptance, inspection of equipment before delivery and upon return (if applicable)
- Term, options and return; including, commencement, expiration, and options prior to and upon expiration
- Rent; including, “net” lease/hell or high water
- Sales, use and other taxes; including, reporting and paying
- Operation, maintenance and return; equipment-specific requirements
- Insurance; required casualty and liability coverages
- Risk of loss or damage; repair, replace or prepay
- Disclaimers of warranties and indemnifications
- Representations and warranties; general and transaction-specific
- Conditions precedent; including, corporate, equipment-related and priority
- Credit-related terms; including, financial reporting and corporate restrictions, personal guarantees.
- Defaults and remedies; including, repossession and damages
- Rights and restrictions regarding assignments and other dispositions; regarding lessee vs. lessor
- Execution, electronic signatures, etc.
- “Boilerplate”; "integration" clauses, choice of law, venue, dispute resolution, further assurances, fees and costs, etc.
The panel will review all these issues and more:
- Attendees will fully understand the differences between a true lease and lease that creates a security interest, and the consequences of each.
- Attendees will learn the key issues to address in negotiating and drafting an equipment lease.
- The panel will provide practical drafting strategies and insight into common mistakes and how proper drafting can reduce the likelihood of disputes and offer significant advantages if disputes arise.
Mark Cohen, J.D., LL.M.
Mr. Cohen has 34 years of experience as a lawyer. His practice is focused on drafting and reviewing legal documents,... | Read More
Mr. Cohen has 34 years of experience as a lawyer. His practice is focused on drafting and reviewing legal documents, advising on and facilitating transactions, helping other lawyers improve their documents, and teaching innovative CLE classes. Mr. Cohen’s diverse legal career includes service as an Air Force Judge Advocate, service as a Special Assistant U.S. Attorney, seven years as a prosecutor, over 10 years as a Municipal Judge, and private practice.
James R. Waite
Robinson Waters & O'Dorisio
Mr. Waite brings more than 20 years of experience in equipment leasing and financing, corporate law, real estate,... | Read More
Mr. Waite brings more than 20 years of experience in equipment leasing and financing, corporate law, real estate, commercial real estate, and mergers and acquisitions.Close