Texas Equipment Purchase and Sale Agreement

TEXAS EQUIPMENT PURCHASE AND SALE AGREEMENT

Governed by Tex. Bus. & Com. Code Ch. 2 (UCC Article 2) and Texas Common Law

PARTIES AND EFFECTIVE DATE

This Texas Equipment Purchase and Sale Agreement (this "Agreement") is entered into effective as of [__/__/____] (the "Effective Date") by and between:

SELLER:
Name: [________________________________]
Entity Type: [________________________________] organized under the laws of [________________________________]
Texas Taxpayer ID / SOS Filing No.: [________________________________]
Principal Office: [________________________________]
County: [________________________________], Texas

BUYER:
Name: [________________________________]
Entity Type: [________________________________] organized under the laws of [________________________________]
Texas Taxpayer ID / SOS Filing No.: [________________________________]
Principal Office: [________________________________]
County: [________________________________], Texas

(each a "Party" and collectively the "Parties")

RECITALS

A. Seller owns the equipment described on Exhibit A attached hereto (the "Equipment") and desires to sell such Equipment.

B. Buyer desires to purchase the Equipment on the terms set forth herein.

C. The Parties intend this Agreement to constitute a contract for the sale of goods governed by the Texas Uniform Commercial Code, Tex. Bus. & Com. Code Ch. 2, and the general commercial laws of the State of Texas.

D. Both Parties acknowledge that the Texas Deceptive Trade Practices—Consumer Protection Act, Tex. Bus. & Com. Code § 17.41 et seq. ("DTPA"), may apply to this transaction to the extent either Party qualifies as a "consumer" under § 17.45(4), and that DTPA waivers must comply with the requirements of § 17.42.

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:

ARTICLE 1 — DEFINITIONS

1.1 "Applicable Law" means all federal and Texas state laws, statutes, regulations, and ordinances applicable to this transaction, including the Texas Business and Commerce Code, the Texas Tax Code, and rules of the Texas Comptroller of Public Accounts.

1.2 "Business Day" means any day other than Saturday, Sunday, or a day on which banking institutions in the State of Texas are authorized or required to be closed.

1.3 "Delivery Point" means [________________________________] located in [________________________________] County, Texas.

1.4 "Equipment" means the tangible personal property described on Exhibit A, including all accessories, manuals, and component parts.

1.5 "Inspection Period" means [____] calendar days following Buyer's receipt of the Equipment at the Delivery Point.

1.6 "Lien" means any mortgage, pledge, security interest, encumbrance, lien (statutory or otherwise), charge, or claim of any kind, including any UCC financing statement filed under Tex. Bus. & Com. Code Ch. 9.

1.7 "Purchase Price" has the meaning set forth in Section 3.1.

1.8 "Specifications" means the technical specifications, performance standards, and condition requirements set forth on Exhibit A.

1.9 "Texas Comptroller" means the Texas Comptroller of Public Accounts.

1.10 "Warranty Period" means [____] months beginning on the date of Buyer's acceptance of the Equipment under Section 5.2.

ARTICLE 2 — SALE AND PURCHASE

2.1 Transfer of Title. Subject to the terms herein, Seller agrees to sell, assign, transfer, and convey to Buyer, and Buyer agrees to purchase from Seller, all of Seller's right, title, and interest in and to the Equipment, free and clear of all Liens. Seller warrants good and marketable title per Tex. Bus. & Com. Code § 2.312.

2.2 Bill of Sale. At Closing, Seller shall execute and deliver to Buyer a bill of sale in form reasonably acceptable to Buyer, together with:

☐ UCC-3 termination statements for any existing financing statements on the Equipment

☐ Evidence of release of any Liens shown on Exhibit B (Permitted Liens)

☐ Manufacturer certificates of origin or existing certificates of title, if applicable

☐ Current maintenance and service records

2.3 Texas Franchise Tax Good Standing. Each Party represents that it is in good standing with the Texas Comptroller and current on Texas franchise tax obligations under Tex. Tax Code Ch. 171. Failure to maintain good standing may affect a Party's ability to maintain suit in Texas courts.

ARTICLE 3 — PURCHASE PRICE AND PAYMENT

3.1 Purchase Price. Buyer shall pay Seller a total purchase price of $[________________________________] (the "Purchase Price"), allocated as follows:

3.2 Payment Schedule.

(a) Earnest money deposit: $[________________________________], due within [____] Business Days of the Effective Date.

(b) Balance due at Closing: $[________________________________], due on or before [__/__/____] (the "Closing Date").

(c) All payments shall be made in United States Dollars by wire transfer to the account designated in writing by Seller.

3.3 Texas Sales and Use Tax.

(a) The Purchase Price does not include Texas sales and use tax. Buyer is responsible for payment of all applicable Texas sales and use tax under Tex. Tax Code § 151.051 et seq. on the purchase of tangible personal property, unless Buyer provides a valid Texas Sales Tax Exemption Certificate (Form 01-339) or a Texas Resale Certificate (Form 01-339) prior to Closing.

(b) If the Equipment qualifies for a manufacturing exemption under Tex. Tax Code § 151.318 or is otherwise exempt, Buyer shall furnish the appropriate exemption certificate to Seller prior to Closing.

(c) Seller shall remit any collected sales tax to the Texas Comptroller in accordance with applicable filing deadlines.

3.4 Late Payment and Texas Usury Limits.

(a) Any amount not paid when due shall bear interest at the rate of [____]% per annum, compounded monthly, from the due date until paid in full.

(b) Notwithstanding the foregoing, in no event shall the interest rate exceed the maximum rate permitted under Tex. Fin. Code Ch. 302 and the Texas Constitution, Art. XVI, § 11 (generally 18% per annum for commercial transactions where the parties have contracted for a specific rate, subject to the "indicated rate" ceiling under Tex. Fin. Code § 303.002). Any interest collected in excess of the lawful maximum shall be credited to the Purchase Price principal.

(c) Buyer acknowledges that late payment may also give rise to Seller's right to prejudgment interest under Tex. Fin. Code § 304.003 in any subsequent enforcement action.

ARTICLE 4 — DELIVERY, RISK OF LOSS, AND TITLE PASSAGE

4.1 Delivery. Seller shall tender delivery of the Equipment at the Delivery Point on or before [__/__/____] (the "Delivery Deadline") in accordance with the following Incoterms 2020 rule: [________________________________].

4.2 Risk of Loss. Risk of loss passes to Buyer in accordance with Tex. Bus. & Com. Code § 2.509 upon:

☐ Seller's tender of delivery at the Delivery Point (if shipment contract), OR

☐ Buyer's receipt of the Equipment at the Delivery Point (if destination contract)

4.3 Title Passage. Title to the Equipment passes to Buyer upon the later of: (a) Seller's receipt of the Purchase Price in full, or (b) delivery of the Equipment, unless the Parties agree otherwise in writing. Passage of title shall comply with Tex. Bus. & Com. Code § 2.401.

4.4 Insurance During Transit. The Party bearing risk of loss during transit shall maintain cargo insurance with a carrier rated A.M. Best "A-VII" or better, covering the full replacement value of the Equipment.

ARTICLE 5 — INSPECTION, ACCEPTANCE, AND REJECTION

5.1 Inspection Rights. Buyer shall have the right to inspect the Equipment during the Inspection Period in accordance with Tex. Bus. & Com. Code § 2.513. Inspection may include, without limitation:

☐ Visual and physical examination

☐ Operational testing against the Specifications

☐ Verification of serial numbers, make, model, and year

☐ Review of maintenance history and title documentation

5.2 Acceptance. The Equipment is deemed accepted upon the earlier of:

(a) Buyer's written notice of acceptance; or

(b) Expiration of the Inspection Period without Buyer having delivered a Rejection Notice.

Acceptance under this Section constitutes acceptance under Tex. Bus. & Com. Code § 2.606.

5.3 Rejection. If the Equipment fails to conform to the Specifications or the requirements of this Agreement, Buyer may reject the Equipment under Tex. Bus. & Com. Code § 2.601 (perfect tender rule) by delivering written notice to Seller specifying each nonconformity (a "Rejection Notice") within the Inspection Period.

5.4 Seller's Cure Rights. Upon receipt of a timely Rejection Notice, Seller shall, at its sole cost and within [____] calendar days:

(a) Repair or replace the nonconforming Equipment so that it meets the Specifications; or

(b) Refund the portion of the Purchase Price allocable to the nonconforming Equipment and arrange for return shipment at Seller's expense.

Seller's right to cure is subject to Tex. Bus. & Com. Code § 2.508.

5.5 Revocation of Acceptance. Buyer may revoke acceptance only in accordance with Tex. Bus. & Com. Code § 2.608, upon discovery of a nonconformity that substantially impairs the value of the Equipment to Buyer and that Buyer did not discover during the Inspection Period due to the difficulty of discovery or Seller's assurances.

ARTICLE 6 — REPRESENTATIONS AND WARRANTIES

6.1 Mutual Representations. Each Party represents and warrants to the other that:

(a) It is duly organized, validly existing, and in good standing under the laws of its state of formation and, if a foreign entity, is qualified to do business in Texas;

(b) It has full power and authority to execute, deliver, and perform this Agreement;

(c) This Agreement constitutes its legal, valid, and binding obligation enforceable against it in accordance with its terms; and

(d) It is current on all Texas franchise tax filings under Tex. Tax Code Ch. 171 and its right to transact business in Texas has not been forfeited.

6.2 Seller's Warranties.

(a) Title Warranty. Seller warrants that it will convey good and marketable title to the Equipment, free and clear of all Liens except Permitted Liens listed on Exhibit B, in accordance with Tex. Bus. & Com. Code § 2.312.

(b) Express Warranty of Conformity. The Equipment shall materially conform to the Specifications and shall be free from defects in materials and workmanship for the duration of the Warranty Period. This constitutes an express warranty under Tex. Bus. & Com. Code § 2.313.

(c) Warranty Against Infringement. Seller warrants that the Equipment, as delivered, does not infringe any patent, trademark, copyright, or trade secret of any third party, per Tex. Bus. & Com. Code § 2.312(c).

(d) Compliance. The Equipment has been manufactured, handled, stored, and sold in compliance with all Applicable Law, including OSHA standards and any applicable EPA or Texas Commission on Environmental Quality (TCEQ) requirements.

(e) No DTPA Violations. Seller represents that it has not engaged in any false, misleading, or deceptive act or practice in connection with this transaction that would give rise to liability under the DTPA, Tex. Bus. & Com. Code § 17.46.

6.3 Warranty Disclaimer.

EXCEPT AS EXPRESSLY SET FORTH IN THIS ARTICLE 6, SELLER MAKES NO REPRESENTATION OR WARRANTY OF ANY KIND, EXPRESS OR IMPLIED, AND HEREBY DISCLAIMS ALL IMPLIED WARRANTIES OF MERCHANTABILITY UNDER TEX. BUS. & COM. CODE § 2.314, FITNESS FOR A PARTICULAR PURPOSE UNDER § 2.315, AND ANY WARRANTY ARISING FROM COURSE OF DEALING OR USAGE OF TRADE. THIS DISCLAIMER IS CONSPICUOUS AND IS MADE IN COMPLIANCE WITH TEX. BUS. & COM. CODE § 2.316.

6.4 DTPA Waiver (If Applicable).

If Buyer qualifies as a "consumer" under Tex. Bus. & Com. Code § 17.45(4), Buyer may waive DTPA provisions only in compliance with § 17.42(a), which requires that: (i) the waiver is in writing and signed by Buyer; (ii) Buyer is represented by legal counsel in seeking or acquiring the Equipment; and (iii) the waiver is conspicuous and in boldface type of at least 10 points. BUYER ACKNOWLEDGES THAT ANY DTPA WAIVER THAT DOES NOT COMPLY WITH § 17.42 IS VOID AND UNENFORCEABLE.

6.5 Survival. The warranties in Section 6.2(b) survive for the Warranty Period. All other representations and warranties survive for four (4) years, consistent with the statute of limitations under Tex. Civ. Prac. & Rem. Code § 16.004.

ARTICLE 7 — COVENANTS

7.1 Further Assurances. Each Party shall execute such additional documents and take such additional actions as may be reasonably necessary to consummate the transactions contemplated herein.

7.2 Confidentiality. Each Party shall maintain the confidentiality of the other Party's proprietary information disclosed in connection with this Agreement for a period of [____] years following the Effective Date. Disclosures required by Texas law, including the Texas Public Information Act (Tex. Gov't Code Ch. 552) if a Party is a governmental entity, are excepted provided the disclosing Party gives prompt notice and cooperates in seeking protective orders.

7.3 Compliance with Texas Law. Each Party shall comply with all Applicable Law in connection with this transaction, including:

(a) Texas Tax Code provisions governing sales, use, and franchise taxes;

(b) Texas Department of Licensing and Regulation requirements for regulated equipment;

(c) Texas Department of Motor Vehicles title and registration requirements, if the Equipment constitutes a motor vehicle or trailer under Tex. Transp. Code Ch. 501; and

(d) Environmental compliance obligations under TCEQ rules, 30 Tex. Admin. Code, if the Equipment contains hazardous materials or refrigerants.

ARTICLE 8 — DEFAULT AND REMEDIES

8.1 Events of Default.

(a) Buyer Default: (i) Failure to pay any amount when due and such failure continues for [____] Business Days after written notice; (ii) failure to accept conforming delivery; or (iii) insolvency, assignment for benefit of creditors, or bankruptcy filing.

(b) Seller Default: (i) Failure to deliver conforming Equipment by the Delivery Deadline (subject to cure under Section 5.4); (ii) material breach of any warranty under Article 6; or (iii) insolvency, assignment for benefit of creditors, or bankruptcy filing.

8.2 Buyer's Remedies Under Texas UCC.

Upon Seller Default, Buyer may exercise any or all of the following remedies available under Texas law:

(a) Cover — purchase substitute equipment and recover the difference between cover price and the Purchase Price, plus incidental and consequential damages, under Tex. Bus. & Com. Code § 2.712;

(b) Damages for Non-Delivery — recover the difference between market price and the Purchase Price under § 2.713;

(c) Specific Performance — seek specific performance where the Equipment is unique or in proper circumstances under § 2.716;

(d) Recover Amounts Paid — recover any portion of the Purchase Price paid, plus incidental damages under § 2.711.

8.3 Seller's Remedies Under Texas UCC.

Upon Buyer Default, Seller may exercise any or all of the following:

(a) Withhold Delivery under Tex. Bus. & Com. Code § 2.703(a);

(b) Resell the Equipment and recover damages under § 2.706;

(c) Recover Damages for non-acceptance or repudiation under § 2.708;

(d) Recover the Purchase Price if the Equipment has been accepted or if resale is impracticable under § 2.709.

8.4 Texas Statutory Attorney's Fees.

(a) The prevailing Party in any action to enforce this Agreement is entitled to recover reasonable attorney's fees under Tex. Civ. Prac. & Rem. Code § 38.001, which permits recovery of attorney's fees for breach of an oral or written contract, provided the claimant is represented by an attorney, presented the claim to the opposing party, and the opposing party failed to tender payment within thirty (30) days.

(b) For purposes of § 38.001, a Party asserting a claim shall present such claim in writing to the other Party at the notice address set forth herein at least thirty (30) days prior to filing suit.

(c) Recovery of attorney's fees under § 38.001 is available to a claimant (plaintiff or counter-plaintiff) against an individual or "organization" as defined in § 38.001(b), which includes corporations, LLCs, partnerships, and other business entities.

8.5 Prejudgment Interest. The prevailing Party in any enforcement action is entitled to prejudgment interest as provided in Tex. Fin. Code § 304.003, calculated at the prime rate published by the Federal Reserve Board of Governors (with a floor of 5% and a cap of 15%), accruing from the earlier of (i) 180 days after the date the defendant receives written notice of the claim, or (ii) the date suit is filed.

8.6 DTPA Remedies Preserved. Nothing in this Article 8 waives or limits any cause of action, remedy, or damage multiplier available to a qualifying "consumer" under the DTPA, including treble damages under Tex. Bus. & Com. Code § 17.50(b)(1) for knowing violations or actual damages plus attorney's fees for non-knowing violations.

ARTICLE 9 — RISK ALLOCATION

9.1 Seller Indemnification. Seller shall indemnify, defend, and hold harmless Buyer, its affiliates, and their respective officers, directors, employees, and agents from all third-party claims, losses, damages, liabilities, and expenses (including reasonable attorney's fees recoverable under Tex. Civ. Prac. & Rem. Code § 38.001) arising from:

(a) Any breach of Seller's representations, warranties, or covenants;

(b) Any title defect or Lien not listed as a Permitted Lien on Exhibit B;

(c) Any claim that the Equipment infringes a third party's intellectual property rights; or

(d) Personal injury or property damage caused by a defect in the Equipment existing at the time of delivery.

9.2 Limitation of Liability.

(a) Cap. Except for (i) Seller's indemnification obligations under Section 9.1, (ii) either Party's gross negligence or willful misconduct, and (iii) liability that cannot be limited under Texas law (including DTPA liability under § 17.42), the aggregate liability of either Party shall not exceed $[________________________________] (the "Liability Cap").

(b) Exclusion of Consequential Damages. EXCEPT AS CARVE-OUTS ABOVE, NEITHER PARTY SHALL BE LIABLE FOR INDIRECT, INCIDENTAL, CONSEQUENTIAL, SPECIAL, EXEMPLARY, OR PUNITIVE DAMAGES, INCLUDING LOST PROFITS, LOSS OF USE, OR BUSINESS INTERRUPTION, WHETHER IN CONTRACT, TORT, STRICT LIABILITY, OR OTHERWISE, EVEN IF ADVISED OF THE POSSIBILITY. This limitation does not apply to damages available under the DTPA to qualifying consumers.

9.3 Insurance. From the Effective Date through the later of (a) acceptance of the Equipment, or (b) expiration of the Warranty Period, Seller shall maintain commercial general liability insurance with limits of not less than $[________________________________] per occurrence, issued by a carrier authorized to do business in Texas by the Texas Department of Insurance, and shall name Buyer as an additional insured upon request.

9.4 Force Majeure. Neither Party is liable for delay or failure to perform (other than payment obligations) caused by events beyond its reasonable control, including acts of God, fire, flood, hurricane, tornado (common in Texas), epidemic, governmental orders, or labor disputes. The affected Party shall give prompt written notice and use commercially reasonable efforts to resume performance. If the Force Majeure Event continues for more than [____] consecutive days, the unaffected Party may terminate this Agreement upon written notice.

ARTICLE 10 — DISPUTE RESOLUTION

10.1 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Texas, including the Uniform Commercial Code as adopted in Tex. Bus. & Com. Code Title 1 and the Deceptive Trade Practices Act (Tex. Bus. & Com. Code § 17.41 et seq.), without giving effect to any conflict-of-laws principles that would require application of the laws of another jurisdiction.

10.2 Exclusive Venue and Jurisdiction.

(a) Any suit, action, or proceeding arising out of or related to this Agreement shall be filed in the state district courts of [________________________________] County, Texas, or in the United States District Court for the [________________________________] District of Texas.

(b) Each Party irrevocably submits to the personal jurisdiction of such courts, waives any objection to venue under Tex. Civ. Prac. & Rem. Code Ch. 15, and waives any claim of forum non conveniens.

(c) The Parties acknowledge that contractual venue provisions are enforceable in Texas for contracts with consideration exceeding $1,000,000 under Tex. Civ. Prac. & Rem. Code § 15.020. For contracts below this threshold, permissive venue under § 15.002 applies, and the Parties consent to venue in [________________________________] County.

10.3 Arbitration (Optional — Select One and Delete the Other).

☐ OPTION A — ARBITRATION ELECTED. Any dispute not resolved through good-faith negotiation within thirty (30) days shall be submitted to final, binding arbitration administered by [________________________________] under its commercial arbitration rules. The arbitration shall be conducted in [________________________________], Texas, before a single arbitrator. The arbitrator shall apply Texas substantive law. Judgment on the award may be entered in any Texas district court of competent jurisdiction.

☐ OPTION B — ARBITRATION NOT ELECTED. Section 10.2 shall govern all disputes exclusively; no arbitration is required.

10.4 Jury Trial Waiver. EACH PARTY HEREBY KNOWINGLY, VOLUNTARILY, AND IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY TEXAS LAW, ITS RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT. The Parties acknowledge that this waiver is enforceable in Texas and has been made after consultation with legal counsel.

10.5 Statute of Limitations. The Parties acknowledge that the statute of limitations for breach of contract in Texas is four (4) years from the date the cause of action accrues under Tex. Civ. Prac. & Rem. Code § 16.004.

ARTICLE 11 — GENERAL PROVISIONS

11.1 Entire Agreement. This Agreement (including all Exhibits) constitutes the entire agreement between the Parties and supersedes all prior negotiations, representations, and agreements, whether oral or written.

11.2 Amendments. No amendment is effective unless in writing and signed by both Parties.

11.3 Assignment. Neither Party may assign this Agreement without the prior written consent of the other Party, except to a successor by merger, consolidation, or sale of substantially all assets, provided the assignee assumes all obligations herein. Any attempted assignment in violation of this Section is void.

11.4 Severability. If any provision is held invalid or unenforceable by a court of competent jurisdiction in Texas, the remaining provisions remain in full force, and the invalid provision shall be reformed to the minimum extent necessary to make it valid.

11.5 Electronic Signatures. This Agreement may be executed in counterparts. Signatures delivered electronically (including via PDF or compliant e-signature platforms) shall have the same legal effect as original signatures in accordance with the Texas Uniform Electronic Transactions Act, Tex. Bus. & Com. Code Ch. 322, and the federal E-SIGN Act (15 U.S.C. § 7001 et seq.).

11.6 Notices. All notices must be in writing and delivered to the addresses set forth above by: (a) personal delivery; (b) certified U.S. mail, return receipt requested; or (c) nationally recognized overnight courier. Notice is effective upon receipt or first refusal.

11.7 Waiver. No waiver is effective unless in writing. Waiver of one breach does not waive any subsequent breach.

11.8 No Third-Party Beneficiaries. This Agreement is solely for the benefit of the Parties and their permitted successors and assigns.

EXECUTION

IN WITNESS WHEREOF, the Parties have executed this Texas Equipment Purchase and Sale Agreement as of the Effective Date.

EXHIBIT A — EQUIPMENT DESCRIPTION AND SPECIFICATIONS

EXHIBIT B — PERMITTED LIENS (IF ANY)

Sources and References

• Tex. Bus. & Com. Code Ch. 2 — Sales (UCC Article 2)
• Tex. Bus. & Com. Code § 17.41 et seq. — Deceptive Trade Practices Act
• Tex. Civ. Prac. & Rem. Code § 16.004 — Four-Year Limitations Period
• Tex. Civ. Prac. & Rem. Code § 38.001 — Attorney's Fees
• Tex. Fin. Code Ch. 302 — Interest Rates (Usury)
• Tex. Fin. Code § 304.003 — Prejudgment Interest
• Tex. Civ. Prac. & Rem. Code Ch. 15 — Venue
• Tex. Bus. & Com. Code Ch. 322 — Uniform Electronic Transactions Act
• Tex. Tax Code § 151.001 et seq. — Sales and Use Tax
• Texas Franchise Tax Overview