PURCHASE AND SALE AGREEMENT

(Commercial Real Estate – State of Hawai‘i)

TABLE OF CONTENTS

1. Document Header
2. Definitions
3. Operative Provisions
4. Representations & Warranties
5. Covenants & Restrictions
6. Default & Remedies
7. Risk Allocation
8. Dispute Resolution
9. General Provisions
10. Execution Block

(Section numbers correspond to the headings below.)

1. DOCUMENT HEADER

THIS PURCHASE AND SALE AGREEMENT (this “Agreement”) is made and entered into as of [EFFECTIVE DATE] (the “Effective Date”), by and between [SELLER LEGAL NAME], a [STATE & ENTITY TYPE] (“Seller”), and [BUYER LEGAL NAME], a [STATE & ENTITY TYPE] (“Buyer”) (each, a “Party,” and collectively, the “Parties”).

RECITALS

A. Seller is the fee simple owner of that certain commercial real property located at [STREET ADDRESS, CITY/COUNTY, HAWAI‘I], together with all improvements thereon and all appurtenant rights and interests (collectively, the “Property”).
B. Seller desires to sell and Buyer desires to purchase the Property upon the terms and subject to the conditions set forth herein.
C. The Parties intend that the transaction contemplated by this Agreement be governed by the laws of the State of Hawai‘i.

NOW, THEREFORE, in consideration of the mutual covenants herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows:

2. DEFINITIONS

For purposes of this Agreement, the following terms shall have the meanings set forth below. Capitalized terms not defined in this Section 2 shall have the meanings otherwise ascribed to them in this Agreement.

“Adjustment Date” – has the meaning given in Section 3.4(b).
“Affiliate” – with respect to any specified Person, any other Person controlling, controlled by, or under common control with such specified Person.
“Arbitration Election Notice” – has the meaning given in Section 8.3(a).
“Bill of Sale” – has the meaning given in Section 3.5(a)(iv).
“Business Day” – any day other than Saturday, Sunday, or a day on which commercial banks in Hawai‘i are authorized or required to close.
“Closing” – the consummation of the purchase and sale of the Property as provided in Section 3.5.
“Closing Date” – the date on which Closing occurs pursuant to Section 3.5(a).
“Deposit” – the earnest money deposit described in Section 3.2.
“Due Diligence Period” – the period for Buyer’s investigations described in Section 3.3(a).
“Environmental Claim” – any claim, demand, action, or proceeding arising out of any Environmental Condition or violation of Environmental Laws.
“Environmental Condition” – the presence of Hazardous Materials at, on, under, or migrating from the Property in violation of Environmental Laws.
“Environmental Laws” – all applicable federal, state, and local statutes, regulations, ordinances, and common-law principles pertaining to pollution, protection of the environment, human health and safety, or the presence, use, storage, treatment, or disposal of Hazardous Materials.
“Escrow” – the escrow established with the Title Company pursuant to Section 3.1.
“Escrow Instructions” – has the meaning given in Section 3.1.
“Governmental Authority” – any federal, state, county, municipal, or other governmental or quasi-governmental authority, department, court, board, agency, or instrumentality having jurisdiction over the Property.
“Hazardous Materials” – any substance regulated by Environmental Laws, including petroleum, petroleum byproducts, asbestos, and polychlorinated biphenyls.
“Permitted Exceptions” – those matters approved or deemed approved by Buyer pursuant to Sections 3.3(b)–(c).
“Purchase Price” – the consideration for the Property set forth in Section 3.2(a).
“Survey” – the ALTA/NSPS survey of the Property procured under Section 3.3(b)(ii).
“Title Commitment” – the preliminary title report or commitment issued under Section 3.3(b)(i).
“Title Company” – [TITLE COMPANY NAME], or such other nationally recognized title insurer approved by both Parties.
“Zoning Report” – the zoning compliance report described in Section 3.3(b)(iii).

3. OPERATIVE PROVISIONS

3.1 Escrow

(a) Establishment. Within three (3) Business Days after the Effective Date, the Parties shall open an escrow (the “Escrow”) with the Title Company under mutually acceptable escrow instructions (the “Escrow Instructions”).
(b) Coordination. The Escrow Instructions shall supplement and be deemed incorporated into this Agreement. In the event of conflict, this Agreement controls.

3.2 Purchase Price; Deposit

(a) Purchase Price. Buyer shall pay [WRITTEN AMOUNT] U.S. Dollars (US$[NUMERICAL AMOUNT]) (the “Purchase Price”).
(b) Deposit. Within two (2) Business Days after Escrow opens, Buyer shall deposit [PERCENTAGE]% of the Purchase Price (the “Deposit”) with the Title Company, to be held in an interest-bearing account. Unless Buyer terminates this Agreement in strict accordance with its terms, the Deposit shall be credited to the Purchase Price at Closing.
[// GUIDANCE: Consider inserting a clause for an additional deposit after the Due Diligence Period.]

3.3 Conditions Precedent; Due Diligence

(a) Due Diligence Period. Buyer shall have [NUMBER] days commencing on the Effective Date (the “Due Diligence Period”) to conduct, at its sole cost and risk, any investigations it deems necessary or desirable, including:
(i) physical inspections;
(ii) environmental assessments (Phase I and, if necessary, Phase II);
(iii) review of leases, service contracts, permits, and governmental approvals;
(iv) zoning and land-use analysis; and
(v) review of the Title Commitment and Survey.

(b) Title and Survey.
(i) Title Commitment. Within five (5) Business Days after the Effective Date, Seller shall cause the Title Company to deliver to Buyer the Title Commitment, together with legible copies of all underlying documents.
(ii) Survey. Buyer, at its option, may obtain a Survey of the Property certified to Buyer, Seller, and the Title Company.
(iii) Zoning Report. Seller shall cooperate to enable Buyer to obtain a current Zoning Report for the Property evidencing compliance with applicable zoning ordinances of the State of Hawai‘i and the County of [COUNTY].

(c) Objections; Cure. Buyer shall have until the earlier of (x) the expiration of the Due Diligence Period, or (y) ten (10) Business Days after receipt of the last of the Title Commitment, Survey, and Zoning Report to deliver written notice of objections. Seller shall have five (5) Business Days thereafter to notify Buyer of Seller’s election to cure. If Seller elects (or is deemed to elect) not to cure, Buyer may (A) terminate this Agreement and receive a prompt return of the Deposit, or (B) proceed to Closing, in which event the uncured matters become Permitted Exceptions.

(d) Termination During Due Diligence. Buyer may terminate this Agreement for any or no reason prior to the expiration of the Due Diligence Period by written notice to Seller and the Title Company, whereupon the Deposit shall be returned to Buyer and the Parties shall have no further obligations hereunder except those expressly stated to survive termination.

3.4 Closing Adjustments

(a) Prorations. Rents, real property taxes (based on the fiscal year of the taxing authority), assessments, utilities, and operating expenses shall be prorated as of 11:59 p.m. Hawai‘i-Aleutian Standard Time on the day preceding the Closing Date (the “Adjustment Date”).
(b) Credits. Buyer shall receive a credit for any tenant security deposits, unapplied prepaid rents, and other items customarily adjusted between commercial real estate purchasers and sellers in Hawai‘i.

3.5 Closing

(a) Closing Date. Subject to satisfaction or waiver of all conditions precedent, the Closing shall occur on [CLOSING DATE] (or such earlier date scheduled by mutual agreement) via escrow closing.
(b) Seller Deliverables. At or prior to Closing, Seller shall deliver:
(i) Special Warranty Deed conveying fee simple title in recordable form;
(ii) Assignment and Assumption of Leases and Contracts;
(iii) FIRPTA affidavit and Hawai‘i HARPTA Forms;
(iv) Bill of Sale for tangible personal property;
(v) Seller’s closing certificate and bring-down of representations; and
(vi) Such other documents as Title Company reasonably requires.
(c) Buyer Deliverables. Buyer shall deliver the balance of the Purchase Price and an executed counterpart of each Closing document.
(d) Possession. Subject to Permitted Exceptions and rights of tenants, possession shall be delivered to Buyer upon Closing.

4. REPRESENTATIONS & WARRANTIES

4.1 Seller’s Representations

Seller represents and warrants to Buyer as of the Effective Date and as of Closing:

(a) Authority. Seller is duly organized, validly existing, and in good standing under the laws of its state of formation and has full power and authority to execute, deliver, and perform this Agreement.
(b) Non-Contravention. The execution, delivery, and performance of this Agreement do not violate any organizational document, contract, or Legal Requirement applicable to Seller.
(c) Title. Seller holds fee simple title to the Property, free and clear of all liens, claims, and encumbrances other than the Permitted Exceptions.
(d) Environmental. To Seller’s Knowledge, Seller has received no written notice of any Environmental Claim relating to the Property that remains unresolved.
(e) Compliance with Laws. Seller has not received written notice of any uncured violation of zoning, building, or land-use codes applicable to the Property.
(f) Litigation. There is no pending or, to Seller’s Knowledge, threatened litigation affecting the Property that would materially impair Buyer’s ownership, use, or operation of the Property.
(g) Foreign Person. Seller is not a “foreign person” within the meaning of § 1445 of the Internal Revenue Code.

[// GUIDANCE: “Knowledge” can be defined as actual knowledge of specified individuals to limit Seller’s exposure.]

4.2 Buyer’s Representations

Buyer represents and warrants to Seller as of the Effective Date and as of Closing:

(a) Authority. Buyer is duly organized, validly existing, and in good standing under the laws of its state of formation and has full power and authority to execute, deliver, and perform this Agreement.
(b) Funds. Buyer has or will have at Closing sufficient immediately available funds to pay the Purchase Price and consummate the transactions contemplated herein.
(c) Investigation. Buyer is experienced in the ownership and operation of commercial real estate and is entering into this Agreement relying solely on its own investigations, except for Seller’s express representations herein.

4.3 Survival; Limitations

All representations and warranties shall survive Closing for a period of [TWELVE (12)] months (the “Survival Period”) and shall thereafter terminate, except for claims timely asserted in a written notice delivered prior to the expiration of the Survival Period.

5. COVENANTS & RESTRICTIONS

5.1 Seller’s Pre-Closing Covenants

(a) Maintenance. Seller shall maintain the Property in substantially the same condition as of the Effective Date, reasonable wear and tear excepted.
(b) New Agreements. Seller shall not enter into, amend, or terminate any lease, service contract, or other agreement affecting the Property without Buyer’s prior written consent (which shall not be unreasonably withheld, conditioned, or delayed).
(c) Access. Seller shall afford Buyer and its representatives reasonable access to the Property during normal business hours, upon 24-hour notice, for purposes of conducting due diligence, provided such access does not unreasonably interfere with tenants’ rights or the operation of the Property.

5.2 Buyer’s Pre-Closing Covenants

(a) Indemnity for Inspections. Buyer shall indemnify, defend, and hold harmless Seller from and against any claims arising out of Buyer’s entry upon the Property, except to the extent caused by Seller’s negligence or willful misconduct.
(b) Confidentiality. Buyer shall keep confidential all non-public information obtained during due diligence, except disclosures required by law or to Buyer’s advisors bound by confidentiality obligations.

5.3 Post-Closing Covenants

(a) Recordation. Buyer shall record the Deed promptly after Closing at Buyer’s expense.
(b) Indemnity Regarding Employee Matters. To the extent any Property employees are transferred to Buyer, Buyer shall assume all liabilities arising thereafter.

6. DEFAULT & REMEDIES

6.1 Buyer Default

If Buyer defaults in its obligations under this Agreement and fails to cure within five (5) Business Days after written notice from Seller, Seller’s sole and exclusive remedy shall be to terminate this Agreement and receive the Deposit as liquidated damages. The Parties acknowledge that the actual damages to Seller would be difficult to ascertain and that the Deposit constitutes a reasonable estimate thereof.
[// GUIDANCE: Hawai‘i courts enforce liquidated damages if the amount is a reasonable forecast of harm and not a penalty.]

6.2 Seller Default

If Seller defaults and fails to cure within five (5) Business Days after written notice from Buyer, Buyer may, at its election:
(a) Terminate this Agreement and receive a refund of the Deposit plus reimbursement of Buyer’s documented third-party due diligence costs not to exceed [CAP AMOUNT]; or
(b) Seek specific performance compelling Seller to convey the Property as contemplated herein.

6.3 Attorney Fees

The prevailing Party in any action or proceeding arising out of this Agreement shall be entitled to reasonable attorney fees and costs.

7. RISK ALLOCATION

7.1 Environmental Indemnity

(a) Seller’s Indemnity. Seller shall indemnify, defend, and hold harmless Buyer and its Affiliates from and against any Losses arising from:
(i) any Environmental Condition existing prior to the Closing Date;
(ii) any breach of Seller’s environmental representations herein; or
(iii) any violation of Environmental Laws attributable to Seller’s ownership, use, or operation of the Property before Closing.

(b) Buyer’s Indemnity. Buyer shall indemnify, defend, and hold harmless Seller from and against any Losses arising from Buyer’s violations of Environmental Laws occurring after Closing.

(c) Survival. The indemnities in this Section 7.1 shall survive Closing indefinitely.

7.2 Limitation of Liability

Except for Seller’s fraud or willful misconduct and Seller’s obligations under Section 7.1, Seller’s aggregate liability under this Agreement shall not exceed [NEGOTIABLE LIABILITY CAP AMOUNT].

7.3 Insurance Requirements

Buyer shall maintain, from and after Closing, commercial general liability insurance covering the Property with limits of not less than [AMOUNT] per occurrence, naming Seller as an additional insured for a period of [TIME].

7.4 Force Majeure

Neither Party shall be liable for delays or failure to perform caused by events beyond its reasonable control, including acts of God, pandemic, governmental restrictions, or natural disasters (“Force Majeure”), provided such Party gives written notice within five (5) Business Days after the occurrence and resumes performance promptly thereafter.

8. DISPUTE RESOLUTION

8.1 Governing Law

This Agreement and any dispute arising hereunder shall be governed by the laws of the State of Hawai‘i, without regard to its conflict-of-laws principles.

8.2 Forum Selection

Subject to Section 8.3, the state courts of competent jurisdiction located in the State of Hawai‘i shall have exclusive jurisdiction and venue over any action arising under this Agreement.

8.3 Arbitration (Optional)

(a) Election. Either Party may elect binding arbitration by delivering written notice (the “Arbitration Election Notice”) to the other within ten (10) days after service of a complaint.
(b) Rules. Arbitration shall be administered by Dispute Prevention & Resolution, Inc. (Honolulu) or, if unavailable, the American Arbitration Association under its Commercial Arbitration Rules.
(c) Award; Enforcement. The arbitrator(s) may award any remedy available at law or equity, including injunctive relief. Judgment on the award may be entered in any court of competent jurisdiction.

8.4 Jury Trial Waiver (Optional)

TO THE EXTENT PERMITTED BY APPLICABLE LAW, EACH PARTY HEREBY IRREVOCABLY WAIVES TRIAL BY JURY IN ANY ACTION ARISING OUT OF THIS AGREEMENT.

8.5 Specific Performance

The Parties acknowledge and agree that the Property is unique and that monetary damages may be inadequate; therefore, specific performance shall be an available remedy to enforce this Agreement.

9. GENERAL PROVISIONS

9.1 Notices

All notices shall be in writing and deemed given: (a) when delivered personally; (b) one (1) Business Day after deposit with a nationally recognized overnight courier; or (c) upon electronic mail transmission with confirmation of delivery, in each case addressed to the Parties at the addresses set forth below (or as subsequently designated).

9.2 Amendment and Waiver

No amendment or waiver of any provision of this Agreement shall be effective unless in writing and signed by the Party against whom enforcement is sought.

9.3 Assignment

Neither Party may assign this Agreement without the prior written consent of the other, except that Buyer may assign to an Affiliate controlled by, controlling, or under common control with Buyer, provided Buyer remains liable for all obligations.

9.4 Successors and Assigns

This Agreement shall bind and inure to the benefit of the Parties and their respective successors and permitted assigns.

9.5 Severability

If any provision is held invalid or unenforceable, such provision shall be severed and the remainder of this Agreement shall remain in full force, provided the essential terms and intent are not materially impaired.

9.6 Entire Agreement

This Agreement, the Exhibits, and the Escrow Instructions constitute the entire agreement between the Parties with respect to the subject matter and supersede all prior understandings.

9.7 Counterparts; Electronic Signatures

This Agreement may be executed in multiple counterparts, each of which shall be deemed an original, and all of which together constitute one instrument. Electronic signatures shall be deemed originals for all purposes.

10. EXECUTION BLOCK

IN WITNESS WHEREOF, the Parties have executed this Agreement as of the Effective Date.

NOTARY ACKNOWLEDGMENT
State of Hawai‘i )
County of __ ) ss.:

On this _ day of _, 20__, before me personally appeared ____, to me known, who, being by me duly sworn, did say that (s)he is the ____ of [SELLER LEGAL NAME] and that (s)he executed the foregoing instrument on behalf of said entity under proper authority.

Notary Public, State of Hawai‘i
My commission expires: ______

[// GUIDANCE: Confirm whether two witnesses are required under the parties’ organizational documents or state law for the type of entity executing the deed.]

EXHIBITS (Non-Exclusive)

A. Legal Description of the Property
B. List of Service Contracts and Personal Property
C. Form of Assignment and Assumption of Leases
D. Form of Bill of Sale
E. Disclosure Schedule (Environmental, Zoning, Title)
F. Seller FIRPTA & HARPTA Certificates

[// GUIDANCE: Prepare the Legal Description directly from the most recent recorded conveyance document or current title report to ensure accuracy for recording.]

[END OF AGREEMENT]