Equipment Purchase Agreement: Definition & Sample

An equipment purchase agreement is an agreement between a purchaser and a seller of equipment. Typically used by businesses, the equipment purchase agreement outlines the rights and obligations of both parties in the transaction. This legal document can protect purchasers from supplier failure, performance-related damages, and sensitive information such as intellectual property and confidentiality.

The purpose of an equipment purchase agreement is to clearly define terms between both purchaser and seller of equipment. An agreement of this type can cover a wide variety of equipment such as manufacturing equipment and medical equipment, among others.

Common Sections in Equipment Purchase Agreements

Below is a list of common sections included in Equipment Purchase Agreements. These sections are linked to the below sample agreement for you to explore.

Equipment Purchase Agreement Sample

EQUIPMENT PURCHASE AGREEMENT

CHIPMOS TECHNOLOGIES INC.

SILICONWARE PRECISION INDUSTRIES CO., LTD.

February 26, 2010

Table of Contents

ARTICLE XI MISCELLANEOUS

9 SECTION 11.1 Confidentiality 9 SECTION 11.2 Taxes 9 SECTION 11.3 Notices 9 SECTION 11.4 Waiver 10 SECTION 11.5 Modifications 10 SECTION 11.6 Assignment 10 SECTION 11.7 Severability 10 SECTION 11.8 Language 10 SECTION 11.9 Governing Law and Jurisdiction 10 SECTION 11.10 Headings 10 SECTION 11.11 Entire Agreement 11 SECTION 11.12 Binding Effect 11 SECTION 11.13 Cooperation 11 SECTION 11.14 Survival 11 SECTION 11.15 Counterparts 11

EQUIPMENT PURCHASE AGREEMENT

This EQUIPMENT PURCHASE AGREEMENT (this “ Agreement ”) is made and entered into as of February 26, 2010, by and between ChipMOS TECHNOLOGIES INC., a company incorporated under the laws of the Republic of China (“ ChipMOS Taiwan ” or the “Purchaser”), and Siliconware Precision Industries Co., Ltd., a company incorporated under the laws of the Republic of China (“ SPIL ” or the “Seller”). Capitalized terms used herein shall have the meaning ascribed to them in Article I hereto.

W I T N E S S E T H :

Whereas, SPIL will sell to ChipMOS Taiwan, and ChipMOS Taiwan will purchase from SPIL certain SPIL’s LCD driver assembly and testing equipment and DRAM testing equipment for the purchase price and upon the terms and conditions set forth in this Agreement;

Whereas, SPIL will purchase from ChipMOS TECHNOLOGIES (Bermuda) LTD. (“ChipMOS Bermuda”), and ChipMOS Bermuda will sell to SPIL, 133,000,000 common shares, par value NT$10.00 per share, of ChipMOS Taiwan (“Target Shares”), which shares constitute 15.77% of the issued and outstanding shares of capital stock of ChipMOS Taiwan as of the date hereof, for the purchase price and upon the terms and conditions set forth in the Share Purchase Agreement;

Whereas, SPIL intends to use the proceeds received from the sales of the equipment under this Agreement to pay the purchase consideration under the Share Purchase Agreement to ChipMOS Bermuda without any advanced or additional payments to ChipMOS Bermuda, and

Now, Therefore, in consideration of the foregoing recitals and the mutual promises, representations, warranties, and covenants hereinafter set forth and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

SECTION 1.1 Certain Definitions . The following terms shall have the following meanings for all purposes of this Agreement, except where the context otherwise requires:

“ Business Day ” shall mean a day other than a Saturday, Sunday or other day on which commercial banks in Taiwan are authorized or required by the law to close.

“ Contract ” shall mean any contract, license, consent, agreement, instrument or other enforceable, commitment, written or unwritten, including any deed, loan or credit agreement, note, bond, mortgage, indenture or lease to which a Person is a party or by which any of its material assets or properties is bound.

“ Effective Date ” means the date when the parties hereto execute this Agreement;

“ Governmental Authority ” means any federal, state, foreign, supranational, national, municipal or local government, any court, any instrumentality, subdivision, administrative agency or commission or securities regulatory authority or other governmental authority or instrumentality or industry self-regulatory body.

“ Equipment ” means the LCD Driver Assembly and Testing Equipment and Memory Testing Equipment owned by SPIL as specified in Schedule A.

“ Installation Site ” means, for DRAM Testing Equipment, the factory of the Purchaser located at No. 1. R&D Rd. 1, Hsinchu Science Park, Hsinchu, Taiwan, and, for LCD Driver Assembly and Testing Equipment, the factory of the Purchaser located at No. 5, Nanke 7 th Rd., Southern Taiwan Science Park, Tainan County, Taiwan.

“ LCD Driver Assembly and Testing Equipment ” means the equipment for assembly and testing of LCD drivers owned by SPIL as specified in Schedule A.

“ Liens ” shall mean any liens, charges, pledges, mortgages, options, encumbrances, adverse claims, security interests or other third party rights (including rights of preemption, purchase rights and voting trusts), restrictions or limitations, in each case of any nature whatsoever.

“ DRAM Testing Equipment ” means the equipment for testing of DRAM products owned by SPIL as specified in Schedule A.

“ Manufacturer ” means a person, an enterprise or an entity that produced the Equipment.

“ NT Dollars ” and “ NT$ ” mean the transaction currency of this Agreement;

“ Sale Price ” means the price for the Equipment as provided in Section 2.2, which shall have included the Value-Added Business Tax;

“ Share Purchase Agreement ” means certain share purchase agreement dated February 26, 2010 between ChipMOS TECHNOLOGIES (Bermuda) LTD. and SPIL; and

“ Specification ” means the specification of certain main Equipment for performance as attached in Schedule B.

SECTION 1.2 Certain Rules of Construction . The headings in this Agreement are inserted for convenience only and shall be ignored in construing this Agreement. Unless the context otherwise requires, words (including words defined herein) denoting the singular number only shall include the plural and vice versa. The words “written” and “in writing” include any means of visible reproduction. References to “Sections” and “Schedules” are to be construed as references to the Sections of, and schedules to, this Agreement.

SALE OF EQUIPMENT , SALE PRICE AND PAYMENT TERMS

SECTION 2.1 Sale of Equipment . The Seller hereby agrees to sell to the Purchaser, and the Purchaser hereby agrees to purchase from the Seller, the Equipment on the terms and conditions hereof.

SECTION 2.2 Sale Price . The Sale Price for the Equipment shall be NT$1,630,580,000, whereby the LCD Driver Assembly and Testing Equipment shall account for NT$930,580,000 and the DRAM Testing Equipment shall account for NT$700,000,000.

SECTION 2.3 Invoices . Notwithstanding the Payment Schedule set forth in Section 2.4, the Seller shall issue the following invoices of the payment thereof, which shall be deemed good consideration for the Equipment in accordance with the following schedule:

(a) Invoice for the First Payment, to be issued on March 31, 2010;

(b) Invoice for the Second Payment, to be issued on May 31, 2010; and

(c) Invoice for the Third Payment & Fourth Payment, to be issued on 30 July 2010.

SECTION 2.4 Payment Schedule . Payment of the Sale Price shall be made by installments by Purchaser to Seller in accordance with the following schedule:

(a) First payment at NT$465,290,000 (“First Payment” equivalent to half of the sale price of the LCD Driver Assembly and Testing Equipment) shall be paid within five (5) Business Days after the Effective Date;

(b) Second payment at NT$465,290,000 (“Second Payment” equivalent to half of the sale price of the LCD Driver Assembly and Testing Equipment) shall be paid on May 31, 2010;

(c) Third payment at NT$210,000,000 (“Third Payment” equivalent to 30% of the sale price of the DRAM Testing Equipment) shall be paid on November 30, 2010; and

(d) Fourth payment at NT$490,000,000 (“Fourth Payment” equivalent to 70% of the sale price of the DRAM Testing Equipment) shall be paid on March 31, 2011.

DELIVERY OF EQUIPMENT

The Seller shall deliver the Equipment to the Purchaser at the Installation Site on the respective delivery dates (“Delivery Date(s)”) in accordance with the following delivery schedule:

SECTION 3.1 LCD Driver Assembly and Testing Equipment . Delivery of the LCD Driver Assembly and Testing Equipment shall be commenced on April 1, 2010, completed by June 30, 2010 and divided into three delivery batches. The delivery details and schedules shall be further negotiated and agreed by the parties hereto in good faith.

SECTION 3.2 DRAM Testing Equipment . Delivery of the DRAM Testing Equipment shall be commenced on July 1, 2010, completed by July 30, 2010 and delivered in one batch. The delivery details and schedules shall be further negotiated and agreed by the parties hereto in good faith.

SECTION 3.3 Title and Risk of Loss . The title to and risk of loss or destruction or damages to any or all of the Equipment shall pass to the Purchaser upon receipt of such Equipment by the Purchaser.

SECTION 3.4 Cost and Expense . The Seller shall bear any and all cost, expense and fees arising out of disassembly, packing, moving, transportation of the Equipment from the Seller’s premises to the Installation Site and the Purchaser shall bear any and all cost, expense and fees arising out of unpacking and installation of the Equipment at the Installation Site.

SECTION 4.1 Purchaser’s Reasonable Efforts . If any of the Equipment is the bonded goods, the Purchaser agrees to exert its commercially reasonable efforts in keeping the Equipment as the bonded goods, including take all required and necessary application for such status.

REPRESENTATIONS AND WARRANTIES

SECTION 5.1 Seller’s Representation and Warranty . The Seller represents and warrants to the Purchaser that:

(a) the Seller is a company duly organized and validly existing under the laws of the Republic of China and is duly authorized to conduct business and in good standing under the laws of each jurisdiction where such qualification is required, except where the lack of such qualification would not reasonably be expected to have, individually or in the aggregate, a material adverse effect on its ability to consummate the transactions contemplated herein;

(b) the Seller has the requisite corporate power and authority to execute and deliver this Agreement and to carry out the provisions of this Agreement including without limitation to transfer the title to the Equipment to the Purchaser. This Agreement and the transactions contemplated hereby and thereby have been duly authorized by all requisite corporate action of the Seller. This Agreement has been duly executed and delivered by the Seller and this Agreement constitutes a valid and legally binding obligation of the Seller, enforceable in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws now or hereafter in effect affecting creditors’ rights generally or by general principles of equity.

(c) no consent, approval, permit or authorization of, license or order of, or registration, declaration, filing with, or notice to, any Governmental Authority (such consents, approvals, authorizations, licenses, orders, registrations, filings and notices, together with any consents, approvals, actions or notices required to be obtained from any Governmental Authority, collectively, the “Consents”) is required to be obtained, made or given by the Seller in connection with (i) the execution and delivery by the Seller of this Agreement, (ii) the performance by the Seller of its obligations under this Agreement or (iii) the consummation by the Seller of the transactions contemplated by this Agreement; in each case, other than where the lack thereof would not be reasonably expected to have, individually or in the aggregate, a material adverse effect;

(d) the execution, delivery and performance by the Seller of this Agreement, the compliance by the Seller with all the provisions hereof and thereof on part of the Seller and the consummation of the transactions contemplated hereby and thereby on part of the Seller will not conflict with or result in (i) any violation of the provisions of the Articles of Incorporation or its internal rules or any statute or any order, rule or regulation of any Governmental Authority having jurisdiction over the Seller or any of its properties or assets, other than any such conflicts, breaches, violations or defaults, or (ii) any breach or violation of any of the terms or provisions of, or constitute a default under, any material Contract to which the Seller is a party or by which the Seller is bound or to which the Equipment is subject;

(e) the Seller owns and holds good and valid title to the Equipment, free of all Liens and the Equipment is the property of the Seller and the Seller may transfer the Equipment to any person or entity without any restrictions whatsoever;

(f) the Seller owns or has valid ownership or license related to the use of the Equipment, without knowing infringement of the rights of others;

(g) the Equipment will operate in conformance with the Specifications or in the event of no Specifications, will have the ordinary functionality of the like products .

(h) Except for the representations and warranties contained in this Section 5.1, neither Seller nor any other Person makes any other express or implied representation or warranty on behalf of or with respect to Seller, and Seller hereby disclaims any such representation or warranty, whether by Seller or any other Person, with respect to the execution and delivery of this Agreement, the consummation of the transactions contemplated in this Agreement or Seller, notwithstanding the delivery or disclosure to Purchaser or any other Person of any documentation or other information by Seller or any other Person with respect to any one or more of the foregoing.

SECTION 5.2 Purchaser’s Representation and Warranty . The Purchaser represents and warrants to the Seller that:

(a) the Purchaser is a company duly organized and validly existing under the laws of the Republic of China and is duly authorized to conduct business and in good standing under the laws of each jurisdiction where such qualification is required, except where the lack of such qualification would not reasonably be expected to have, individually or in the aggregate, a material adverse effect on its ability to consummate the transactions contemplated herein;

(b) the Purchaser has the requisite corporate power and authority to execute and deliver this Agreement and to carry out the provisions of this Agreement. This Agreement and the transactions contemplated hereby and thereby have been duly authorized by all requisite corporate action of the Purchaser. This Agreement has been duly executed and delivered by the Purchaser and this Agreement constitutes, and a valid and legally binding obligation of the Purchaser, enforceable in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws now or hereafter in effect affecting creditors’ rights generally or by general principles of equity.

(c) no consent, approval, permit or authorization of, license or order of, or registration, declaration, filing with, or notice to, any Governmental Authority (such consents, approvals, authorizations, licenses, orders, registrations, filings and notices, together with any consents, approvals, actions or notices required to be obtained from any Governmental Authority, collectively, the “Consents”) is required to be obtained, made or given by the Purchaser in connection with (i) the execution and delivery by the Purchaser of this Agreement, (ii) the performance by the Purchaser of its obligations under this Agreement or (iii) the consummation by the Purchaser of the transactions contemplated by this Agreement; in each case, other than where the lack thereof would not be reasonably expected to have, individually or in the aggregate, a material adverse effect;

(d) the execution, delivery and performance by the Purchaser of this Agreement, the compliance by the Purchaser with all the provisions hereof and thereof on part of the Purchaser and the consummation of the transactions contemplated hereby and thereby on part of the Purchaser will not conflict with or result in (i) any violation of the provisions of the Articles of Incorporation or its internal rules or any statute or any order, rule or regulation of any Governmental Authority having jurisdiction over it or any of its properties or assets, other than any such conflicts, breaches, violations or defaults, or (ii) any breach or violation of any of the terms or provisions of, or constitute a default under, any material Contract to which the Purchaser is a party or by which the Purchaser is bound.