COMMERCIAL REAL ESTATE PURCHASE AND SALE AGREEMENT

(Illinois)

[// GUIDANCE: This template is drafted for the purchase and sale of fee-simple commercial real estate located in the State of Illinois. Bracketed text must be customized. Strategic drafting guidance is provided in comment format and should be deleted prior to execution.]

TABLE OF CONTENTS

1. Document Header ............................................................... 2
2. Definitions ..................................................................... 3
3. Purchase and Sale ................................................................ 6
4. Purchase Price; Earnest Money ..................................................... 6
5. Title, Survey, and Zoning Matters ................................................. 8
6. Due Diligence; Inspections; Environmental Review ................................... 10
7. Conditions Precedent ............................................................. 13
8. Representations and Warranties .................................................... 14
9. Covenants ........................................................................ 17
10. Closing .......................................................................... 19
11. Prorations and Closing Adjustments ................................................ 21
12. Risk Allocation; Indemnification; Insurance ....................................... 22
13. Casualty; Condemnation ............................................................ 24
14. Default; Remedies ................................................................. 25
15. Dispute Resolution ............................................................... 27
16. General Provisions ............................................................... 29
17. Execution Block ................................................................. 33
18. Exhibits & Schedules ............................................................. 34

1. DOCUMENT HEADER

THIS COMMERCIAL REAL ESTATE PURCHASE AND SALE AGREEMENT (this “Agreement”) is entered into as of [EFFECTIVE DATE] (the “Effective Date”) by and between:

• [SELLER LEGAL NAME], a [STATE OF ORGANIZATION] [ENTITY TYPE] (“Seller”); and
• [BUYER LEGAL NAME], a [STATE OF ORGANIZATION] [ENTITY TYPE] (“Buyer”).

Seller desires to sell and Buyer desires to purchase certain real property commonly known as [PROPERTY ADDRESS] and more particularly described on Exhibit A, together with all Improvements, Appurtenances, and Personal Property (each as defined herein), subject to the terms and conditions set forth below.

2. DEFINITIONS

The following capitalized terms shall have the meanings set forth below. Terms defined in the singular include the plural and vice-versa.

“Affiliate” – Any entity controlling, controlled by, or under common control with a Party.

“Appurtenances” – All rights, privileges, easements, hereditaments, and other appurtenances belonging to or benefitting the Land.

“Business Day” – Any day other than Saturday, Sunday, or a day on which commercial banks in Chicago, Illinois are authorized or required to close.

“Casualty Notice” – Written notice by a Party pursuant to Section 13.1 regarding damage to the Property.

“Closing” – The consummation of the purchase and sale contemplated by this Agreement, to occur on the Closing Date.

“Closing Date” – The date on which Closing actually occurs, as established under Section 10.1.

“Closing Documents” – Collectively, the documents listed in Section 10.3.

“Deed” – The Illinois special warranty deed substantially in the form attached as Exhibit B.

“Deposit” – The earnest money described in Section 4.2.

“Due Diligence Period” – The period commencing on the Effective Date and expiring at 5:00 p.m. (Central Time) on [DUE DILIGENCE EXPIRATION DATE], unless earlier terminated or extended as expressly provided herein.

“Environmental Laws” – The Comprehensive Environmental Response, Compensation, and Liability Act, 42 U.S.C. § 9601 et seq.; the Illinois Environmental Protection Act, 415 ILCS 5/1 et seq.; and all other applicable federal, state, or local statutes, regulations, rules, ordinances, and common-law doctrines governing Hazardous Materials.

“Escrow Agent” – [TITLE/ESCROW COMPANY NAME] or its successor approved in writing by both Parties.

“Estimated Closing Statement” – The statement prepared by Escrow Agent under Section 10.2.

“Hazardous Materials” – Any substance regulated under Environmental Laws, including without limitation petroleum, asbestos, polychlorinated biphenyls, lead-based paint, mold, per- and polyfluoroalkyl substances (PFAS), and radioactive materials.

“Improvements” – All buildings, structures, fixtures, and other improvements situated on the Land.

“Indemnified Claims” – Claims subject to indemnification under Section 12.1.

“Land” – The real property described on Exhibit A.

“Liability Cap” – The limitation on Seller’s aggregate liability set forth in Section 12.4.

“Personal Property” – All tangible personal property owned by Seller and located on or used in connection with the Property, excluding (a) property owned by tenants and (b) items expressly excluded in Schedule 1.

“Property” – Collectively, the Land, Improvements, Appurtenances, and Personal Property.

“Purchase Price” – The consideration payable by Buyer to Seller for the Property, as set forth in Section 4.1.

“Survey” – ALTA/NSPS Land Title Survey of the Property prepared in accordance with Section 5.3.

“Title Commitment” – The commitment for an owner’s title insurance policy issued by the Title Company in accordance with Section 5.1.

“Title Company” – [TITLE COMPANY NAME], as title insurer and escrow holder.

3. PURCHASE AND SALE

3.1 Agreement to Convey. Subject to the terms of this Agreement, Seller shall sell, assign, transfer, and convey the Property to Buyer, and Buyer shall purchase and accept the Property from Seller for the Purchase Price.

3.2 Conveyancing Instrument. At Closing, Seller shall deliver the Deed conveying fee-simple title to the Land and Improvements, subject only to Permitted Exceptions (defined in Section 5.4).

4. PURCHASE PRICE; EARNEST MONEY

4.1 Purchase Price. Buyer shall pay Seller the total purchase price of [PURCHASE PRICE WRITTEN] Dollars (US $[PURCHASE PRICE NUMERIC]) (the “Purchase Price”), subject to prorations and adjustments provided herein.

4.2 Deposit.
(a) Within two (2) Business Days after the Effective Date, Buyer shall deposit with Escrow Agent the sum of US $[INITIAL DEPOSIT] (the “Initial Deposit”) in immediately available funds.
(b) Unless Buyer timely terminates this Agreement during the Due Diligence Period, Buyer shall deposit an additional US $[ADDITIONAL DEPOSIT] (the “Additional Deposit”) on the first Business Day after the expiration of the Due Diligence Period.
(c) The Initial Deposit and Additional Deposit, together with all interest accrued thereon, are collectively referred to as the “Deposit.” The Deposit shall be credited against the Purchase Price at Closing.

4.3 Balance of Purchase Price. On the Closing Date, Buyer shall deliver to Escrow Agent the balance of the Purchase Price, plus Buyer’s Closing costs, by wire transfer of immediately available funds.

4.4 Independent Contract Consideration. A portion of the Deposit equal to US $100.00 is non-refundable to Seller and constitutes independent consideration for Seller’s performance hereunder.

4.5 Default Disposition of Deposit. The Deposit shall be applied, forfeited, or returned as provided in Section 14.

[// GUIDANCE: Consider whether to require a guaranty of Buyer’s obligations where Buyer is a special-purpose entity.]

5. TITLE, SURVEY, AND ZONING MATTERS

5.1 Title Commitment.
(a) Seller shall cause Title Company to issue to Buyer, within five (5) Business Days after the Effective Date, the Title Commitment together with legible copies of all underlying title exception documents.
(b) The Title Commitment shall commit to insure Buyer at Closing for the Purchase Price under an ALTA Owner’s Policy (Form 6-17-06) (or most current form) with extended coverage and such endorsements as Buyer may reasonably require.

5.2 Review Period; Title Objections.
(a) Buyer shall have until the earlier of (i) the expiration of the Due Diligence Period or (ii) ten (10) Business Days after receipt of the last of the Title Commitment, exception documents, and Survey (the “Title Review Period”) to deliver to Seller any written objections (“Title Objections”) to matters disclosed therein.
(b) Seller shall have five (5) Business Days after receipt of Buyer’s Title Objections to notify Buyer whether Seller will cure or remove each objection. Seller shall be deemed to have elected not to cure any objection not expressly accepted in Seller’s response.
(c) If Seller elects (or is deemed to elect) not to cure a Title Objection, Buyer may (i) terminate this Agreement and receive a return of the Deposit, or (ii) waive such objection, in which event the objection shall become a Permitted Exception.

5.3 Survey. Buyer may obtain, at Buyer’s expense, the Survey. Buyer shall deliver any survey-related objections within the Title Review Period, and such objections shall be handled in accordance with Section 5.2.

5.4 Permitted Exceptions. The following constitute “Permitted Exceptions”:
(a) real estate taxes not yet due and payable;
(b) matters created by or with the written consent of Buyer;
(c) Title Objections waived or deemed waived by Buyer;
(d) zoning ordinances and other governmental regulations; and
(e) any other exceptions approved in writing by Buyer.

5.5 Zoning Compliance. Seller represents, and shall deliver a zoning compliance letter or equivalent municipal certificate at Closing, confirming that the Property’s current use as [DESCRIBE USE] is a legally permitted use under applicable zoning ordinances and that all existing Improvements conform to applicable setback, height, parking, and density requirements, except as expressly disclosed in Schedule 2.

[// GUIDANCE: Municipal zoning letters can take weeks; build sufficient lead time into the Closing timeline.]

6. DUE DILIGENCE; INSPECTIONS; ENVIRONMENTAL REVIEW

6.1 Access. During the Due Diligence Period, Seller shall provide Buyer and its agents with reasonable access to the Property upon at least twenty-four (24) hours’ prior notice.

6.2 Deliverables. Within three (3) Business Days after the Effective Date, Seller shall make available to Buyer true, correct, and complete copies of the items listed on Exhibit C, including without limitation:
(a) all existing environmental reports, Phase I and II assessments, and remediation records;
(b) engineering studies, plans, and specifications;
(c) existing lease agreements and rent rolls (if any);
(d) operating statements for the prior [___] years; and
(e) certificates of occupancy and building permits.

6.3 Inspections. Buyer may (at Buyer’s sole cost) conduct physical inspections, soil borings, environmental assessments, appraisals, and other investigations deemed necessary, provided that:
(a) no invasive testing shall occur without Seller’s prior written consent;
(b) Buyer shall restore the Property to substantially the same condition as existed prior to entry; and
(c) Buyer shall maintain commercial general liability insurance with limits of not less than US $[___] per occurrence naming Seller as an additional insured.

6.4 Environmental Review; Phase I ESA.
(a) Buyer shall obtain, at Buyer’s expense, a current ASTM E1527-21 Phase I Environmental Site Assessment (“Phase I ESA”) from a qualified, Illinois-licensed environmental consultant (“Consultant”).
(b) If the Phase I ESA or any subsequent investigation reveals the presence of Hazardous Materials requiring remediation under Environmental Laws, Buyer may, within the Due Diligence Period, terminate this Agreement upon written notice, whereupon the Deposit shall be returned to Buyer and neither Party shall have further liability, except as expressly stated herein.

6.5 Confidentiality. All due diligence information and results of Buyer’s investigations shall be subject to the confidentiality obligations set forth in Section 16.3.

7. CONDITIONS PRECEDENT

7.1 Buyer’s Conditions. Buyer’s obligation to close is conditioned upon:
(a) Title Company’s readiness to issue the title policy contemplated by Section 5.1 without exception other than Permitted Exceptions;
(b) Seller’s representations and warranties being true and correct in all material respects as of Closing;
(c) Seller’s delivery of all Closing Documents;
(d) absence of any uncured material Casualty or Condemnation (per Section 13); and
(e) satisfaction or written waiver of any other Buyer conditions expressly stated herein.

7.2 Seller’s Conditions. Seller’s obligation to close is conditioned upon:
(a) Buyer’s payment of the Purchase Price and performance of its covenants;
(b) Buyer’s representations and warranties being true and correct in all material respects as of Closing; and
(c) approval of the Estimated Closing Statement by Seller.

Failure of a Party’s condition precedent may be waived only by that Party in a writing executed and delivered before Closing.

8. REPRESENTATIONS AND WARRANTIES

8.1 Seller’s Representations. Seller represents and warrants to Buyer as of the Effective Date and again as of Closing that:
(a) Organization; Authority. Seller is duly organized, validly existing, and in good standing under the laws of its state of formation and is authorized to transact business in Illinois.
(b) Enforceability. This Agreement constitutes Seller’s legal, valid, and binding obligation, enforceable against Seller in accordance with its terms.
(c) Title. Seller holds fee-simple title to the Land and Improvements, free and clear of liens other than Permitted Exceptions.
(d) No Conflicts. Seller’s execution, delivery, and performance of this Agreement do not and will not conflict with any agreement, court order, or law applicable to Seller.
(e) Environmental Compliance. Seller has not received written notice of any violation of Environmental Laws affecting the Property that remains uncured.
(f) Zoning. To Seller’s Knowledge, the current use of the Property complies with all applicable zoning and land-use regulations in all material respects.
(g) Litigation. No pending or, to Seller’s Knowledge, threatened litigation, condemnation, or administrative proceeding materially affecting the Property exists, except as disclosed on Schedule 3.
(h) Foreign Person. Seller is not a “foreign person” under Section 1445 of the Internal Revenue Code.
(i) Leases. Except as disclosed on Schedule 4, there are no Leases affecting the Property.

8.2 Buyer’s Representations. Buyer represents and warrants to Seller that:
(a) Organization; Authority. Buyer is duly organized, validly existing, and in good standing under the laws of its state of formation and is authorized to transact business in Illinois.
(b) Enforceability. This Agreement constitutes a legal, valid, and binding obligation of Buyer.
(c) No Conflicts. Buyer’s execution and performance of this Agreement do not conflict with any agreement, court order, or law applicable to Buyer.
(d) Financial Capacity. Buyer has, and at Closing will have, sufficient cash or financing to pay the Purchase Price and its Closing costs.

8.3 Survival; Limitation. Seller’s representations and warranties shall survive Closing for twelve (12) months (the “Survival Period”) and shall then automatically expire, except for (a) fraud, or (b) claims timely noticed in writing before expiration. Seller’s aggregate liability under this Section 8 shall not exceed the Liability Cap.

9. COVENANTS

9.1 Conduct of Business. From the Effective Date through Closing, Seller shall:
(a) operate and maintain the Property in substantially the same manner as prior to the Effective Date;
(b) maintain existing insurance coverage;
(c) not transfer or encumber the Property, nor grant new leases, without Buyer’s prior written consent (not to be unreasonably withheld); and
(d) promptly notify Buyer of any material adverse change affecting the Property.

9.2 Cooperation for Title Matters. Seller shall cooperate reasonably with Buyer (at no cost to Seller) to satisfy Buyer’s title requirements, including executing curative affidavits and gap indemnities customarily required by Title Company.

9.3 1031 Exchange Cooperation. Either Party may structure this transaction as a tax-deferred exchange under Section 1031 of the Internal Revenue Code at no additional cost or liability to the other Party.

10. CLOSING

10.1 Time and Place. Closing shall occur on [CLOSING DATE] (or such earlier date identified in a Closing notice delivered at least five (5) Business Days prior thereto), through an escrow with Escrow Agent at the offices of Title Company, or remotely via electronic means as the Parties may mutually agree.

10.2 Estimated Closing Statement. Not less than two (2) Business Days before Closing, Escrow Agent shall deliver the Estimated Closing Statement to both Parties for review and approval.

10.3 Seller’s Closing Deliverables. At Closing, Seller shall deliver:
(a) the Deed;
(b) Bill of Sale for Personal Property;
(c) Assignment of Leases and Contracts;
(d) FIRPTA Affidavit;
(e) ALTA Statement;
(f) Bring-Down Certificate reaffirming representations;
(g) Seller’s organizational resolutions and certificates of good standing;
(h) keys, access codes, and original Property files in Seller’s possession; and
(i) any other documents reasonably required by Title Company or Escrow Agent.

10.4 Buyer’s Closing Deliverables. At Closing, Buyer shall deliver:
(a) the Purchase Price balance;
(b) Buyer’s organizational resolutions and certificates of good standing;
(c) counterpart signature pages to all Closing Documents; and
(d) any other documents reasonably required by Title Company or Escrow Agent.

11. PRORATIONS AND CLOSING ADJUSTMENTS

11.1 Items Prorated. The following shall be prorated as of 11:59 p.m. (Central Time) on the day immediately preceding the Closing Date:
(a) real estate taxes and assessments (based on the latest available tax bill or, if not available, based on [___]% of the prior year’s bill);
(b) utilities (based on meter readings or Seller’s reasonable estimates);
(c) rents and refundable tenant deposits (if applicable); and
(d) any other income or expense items customarily prorated in Cook County, Illinois commercial transactions.

11.2 Tax Appeals. Seller shall be entitled to all refunds (net of costs) attributable to tax years prior to the year of Closing; Buyer shall be entitled to refunds for the tax year of Closing and thereafter. The Parties shall cooperate in ongoing or future tax appeals as set forth in Schedule 5.

12. RISK ALLOCATION; INDEMNIFICATION; INSURANCE

12.1 Environmental Indemnity. Without limiting any other rights or remedies, Seller shall indemnify, defend, and hold Buyer, its Affiliates, and their respective officers, directors, members, partners, employees, and agents (collectively, “Buyer Indemnitees”) harmless from and against any and all Indemnified Claims arising out of or resulting from (a) the presence, Release, or threatened Release of Hazardous Materials on, under, or migrating from the Property to the extent occurring prior to Closing, or (b) any violation of Environmental Laws relating to the Property attributable to a pre-Closing period.

12.2 Buyer’s Indemnity. Buyer shall indemnify, defend, and hold Seller and its Affiliates harmless from and against any Indemnified Claims arising out of Buyer’s (a) breach of this Agreement, or (b) negligent acts or omissions occurring on the Property on or after the Effective Date.

12.3 Procedures. The indemnified Party shall promptly notify the indemnifying Party of any Indemnified Claim and shall cooperate in the defense thereof. The indemnifying Party may assume defense with counsel reasonably satisfactory to the indemnified Party. Failure to give prompt notice shall not relieve the indemnifying Party of its obligations except to the extent materially prejudiced.

12.4 Liability Cap; Exclusions. Seller’s aggregate liability to Buyer under this Agreement (excluding fraud, willful misconduct, or breaches of the Environmental Indemnity) shall not exceed [US $______] (the “Liability Cap”). The Liability Cap shall not apply to (a) post-Closing prorations and adjustments, or (b) obligations that expressly survive Closing without limitation.

12.5 Insurance. Until Closing, Seller shall maintain existing property insurance. Buyer shall obtain, as of Closing, (a) “all risk” property insurance on the Improvements in an amount not less than full replacement cost, and (b) commercial general liability insurance with limits of not less than US $[___] per occurrence, naming Seller as an additional insured for a period of one (1) year after Closing with respect to pre-Closing access activities.

12.6 Survival. The covenants and indemnities in this Section 12 shall survive Closing in accordance with their terms and shall not be merged into the Deed.

13. CASUALTY; CONDEMNATION

13.1 Notice. Seller shall promptly notify Buyer of any material casualty or condemnation affecting the Property.

13.2 Material Casualty or Condemnation. If, prior to Closing, (a) the Property is damaged by casualty and the cost to repair exceeds []% of the Purchase Price, or (b) any condemnation proceeding would result in a loss of material access or more than []% of the Land area, Buyer may terminate this Agreement by written notice delivered within ten (10) Business Days after Seller’s notice, whereupon the Deposit shall be returned to Buyer.

13.3 Minor Casualty. In the event of casualty or condemnation not entitling Buyer to terminate, Buyer shall proceed to Closing, and Seller shall assign to Buyer all insurance proceeds or condemnation awards, and the Purchase Price shall be reduced by any deductible or uninsured loss.

14. DEFAULT; REMEDIES

14.1 Buyer Default. If Buyer defaults in performing any of its obligations and fails to cure within five (5) Business Days after written notice, Seller’s sole and exclusive remedy shall be to terminate this Agreement and receive the Deposit as liquidated damages, which the Parties agree constitutes a reasonable estimate of Seller’s damages.

[// GUIDANCE: Delete liquidated damages and provide for specific performance if Parties desire symmetrical remedies.]

14.2 Seller Default. If Seller defaults and fails to cure within five (5) Business Days after written notice, Buyer may elect, as its sole remedies, to (a) terminate this Agreement and receive a refund of the Deposit plus reimbursement of documented out-of-pocket due diligence costs not to exceed US $[CAP], or (b) seek specific performance of Seller’s obligations. IN NO EVENT SHALL SELLER BE LIABLE FOR CONSEQUENTIAL OR PUNITIVE DAMAGES.

14.3 Attorneys’ Fees. The prevailing Party in any action or proceeding arising out of this Agreement shall be entitled to recover reasonable attorneys’ fees and costs.

15. DISPUTE RESOLUTION

15.1 Governing Law. This Agreement and the rights of the Parties shall be governed by and construed in accordance with the internal laws of the State of Illinois, without regard to conflict-of-laws principles.

15.2 Forum Selection. Each Party irrevocably submits to the exclusive jurisdiction of the state courts sitting in [COUNTY], Illinois for any action arising out of or relating to this Agreement.

15.3 Optional Arbitration. Notwithstanding Section 15.2, the Parties may, by mutual written agreement executed after a dispute arises, submit any controversy to binding arbitration administered by the American Arbitration Association under its Commercial Arbitration Rules.

15.4 Jury Waiver. IF AND TO THE EXTENT PERMITTED BY APPLICABLE LAW, EACH PARTY HEREBY KNOWINGLY, VOLUNTARILY, AND INTENTIONALLY WAIVES ITS RIGHT TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING ARISING OUT OF THIS AGREEMENT.

15.5 Injunctive Relief; Specific Performance. Nothing herein shall limit Buyer’s right to seek specific performance or injunctive relief pursuant to Section 14.2.

16. GENERAL PROVISIONS

16.1 Notices. All notices shall be in writing and deemed given when (a) delivered personally, (b) sent by nationally recognized overnight courier (receipt requested), or (c) emailed with confirmation of transmission, to the addresses set forth below (or as changed by notice). Notice is effective on delivery (or attempted delivery if receipt is refused).

Seller Notice Address:
[SELLER ADDRESS]
Email: [SELLER EMAIL]
Attn: [SELLER CONTACT]

Buyer Notice Address:
[BUYER ADDRESS]
Email: [BUYER EMAIL]
Attn: [BUYER CONTACT]

16.2 Amendment; Waiver. No amendment or waiver shall be binding unless in writing signed by the Party to be charged. Waiver of any provision shall not constitute waiver of any other provision.

16.3 Confidentiality. Except as required by law, the Parties shall keep the existence and terms of this Agreement, and all non-public information regarding the Property, confidential; provided, however, either Party may disclose such information to its Representatives, lenders, investors, and as required by securities or other applicable laws.

16.4 Assignment. Buyer may not assign this Agreement without Seller’s prior written consent, except to (a) an Affiliate of Buyer, or (b) a single-purpose entity formed for acquisition and ownership of the Property, provided Buyer remains liable post-assignment. Any prohibited assignment is void.

16.5 Severability. If any provision is held unenforceable, the remainder shall remain in full force, and the invalid provision shall be modified to effectuate the Parties’ intent to the maximum extent enforceable.

16.6 Integration. This Agreement (including Exhibits and Schedules) constitutes the entire agreement between the Parties regarding the subject matter and supersedes all prior agreements or understandings.

16.7 Counterparts; Electronic Signatures. This Agreement may be executed in multiple counterparts, each of which is deemed an original but all of which constitute one instrument. Signatures exchanged electronically (e.g., via .pdf or DocuSign) are binding.

16.8 Successors and Assigns. Subject to Section 16.4, this Agreement binds and inures to the benefit of the Parties and their respective successors and permitted assigns.

16.9 Time of Essence. Time is of the essence with respect to each obligation herein.

16.10 Interpretation. Headings are for convenience only and do not affect interpretation. “Including” means “including without limitation.”

17. EXECUTION BLOCK

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

SELLER:
[SELLER LEGAL NAME]
By: ____
Name: ____
Title: _________

BUYER:
[BUYER LEGAL NAME]
By: ____
Name: ____
Title: _________

State of __ )
County of __ )

The foregoing instrument was acknowledged before me this ___ day of _, 20_, by ___ as _____ of [SELLER LEGAL NAME], on behalf of said entity.

Notary Public
My Commission Expires: ____

[Duplicate acknowledgment for Buyer or modify as required by Illinois notarial law.]

18. EXHIBITS & SCHEDULES

Exhibit A – Legal Description of Land
Exhibit B – Form of Special Warranty Deed
Exhibit C – Seller Deliverables
Schedule 1 – Personal Property Exclusions
Schedule 2 – Zoning Compliance Exceptions
Schedule 3 – Litigation Disclosure
Schedule 4 – Existing Leases
Schedule 5 – Real Estate Tax Proceedings

[// GUIDANCE: Insert additional exhibits (e.g., Bill of Sale, Assignment of Contracts, Environmental Indemnity Agreement) as required by the transaction.]

[END OF AGREEMENT]