PURCHASE AND SALE AGREEMENT
(Commercial Real Estate – State of Indiana)
[// GUIDANCE: This template is structured as a comprehensive “base form” agreement. Bracketed items require customization. Optional provisions are clearly noted. Confirm all deal-specific business terms before finalizing.]
TABLE OF CONTENTS
- Definitions
- Purchase and Sale; Property
- Purchase Price; Earnest Money
- Due Diligence; Title, Survey & Zoning Compliance
- Closing; Deliveries
- Representations and Warranties
- Covenants
- Environmental Matters & Indemnification
- Casualty; Condemnation
- Conditions Precedent
- Default; Remedies
- Risk Allocation
- Dispute Resolution
- Miscellaneous
- Execution Block
AGREEMENT
This Purchase and Sale Agreement (the “Agreement”) is made and entered into as of [●] (the “Effective Date”) by and between:
- [SELLER NAME], a [●] organized under the laws of [●], having its principal place of business at [●] (“Seller”); and
- [BUYER NAME], a [●] organized under the laws of [●], having its principal place of business at [●] (“Buyer”).
Seller and Buyer are sometimes referred to individually as a “Party” and collectively as the “Parties.”
RECITALS
A. Seller is the owner of certain real property located in the State of Indiana, commonly known as “[●]”, and legally described on Exhibit A (the “Land”), together with all improvements, fixtures, rights, privileges and appurtenances thereto (collectively with the Land, the “Property”).
B. Buyer desires to purchase, and Seller desires to sell, the Property on the terms and conditions set forth herein.
C. The Parties contemplate a closing in the State of Indiana, and intend that this Agreement be governed by Indiana law.
NOW, THEREFORE, in consideration of the mutual covenants herein and other good and valuable consideration, the receipt and sufficiency of which are acknowledged, the Parties agree as follows:
1. DEFINITIONS
The following terms have the meanings set forth below and apply throughout this Agreement (alphabetical order):
“Affiliate” – Any entity controlling, controlled by, or under common control with a Party.
“Applicable Law” – All federal, state (including, without limitation, the Indiana Code and Indiana Administrative Code), county and municipal statutes, regulations, ordinances, rules, orders and judicial decisions.
“Business Day” – Any day other than Saturday, Sunday, or a legal holiday in the State of Indiana.
“Closing” – The consummation of the purchase and sale contemplated herein.
“Closing Date” – The date on which Closing occurs pursuant to Section 5.1.
“Deposit” – The earnest money described in Section 3.2.
“Due Diligence Period” – The period specified in Section 4.1.
“Environmental Laws” – All Applicable Law relating to protection of the environment, natural resources, or human health from exposure to Hazardous Materials.
“Hazardous Materials” – Any substance defined, regulated or listed pursuant to Environmental Laws, including petroleum products and PCBs.
“Knowledge” – With respect to Seller, the actual knowledge, without duty of inquiry, of [NAME/TITLE(s)] (“Seller’s Knowledge Party”).
“Purchase Price” – The consideration described in Section 3.1.
“Title Company” – [TITLE COMPANY NAME], or any other nationally recognized title insurer selected by Buyer and reasonably acceptable to Seller.
[// GUIDANCE: Add or delete definitions as transaction requires; ensure cross-references are updated.]
2. PURCHASE AND SALE; PROPERTY
2.1 Purchase and Sale. Subject to the terms herein, Seller agrees to sell, transfer and convey to Buyer, and Buyer agrees to purchase from Seller, all of Seller’s right, title and interest in and to the Property.
2.2 Personal Property. The sale includes all tangible personal property, if any, listed on Exhibit B and all intangible rights, warranties and plans relating to the Property (collectively, the “Personal Property”).
2.3 Excluded Assets. Seller retains all property expressly listed on Exhibit C.
3. PURCHASE PRICE; EARNEST MONEY
3.1 Purchase Price. Buyer shall pay Seller [US $●] (the “Purchase Price”), subject to prorations and adjustments set forth herein.
3.2 Earnest Money Deposit. Within three (3) Business Days after mutual execution of this Agreement, Buyer shall deliver to the Title Company, as escrow agent, an earnest money deposit of [US $●] (the “Deposit”) by wire transfer.
(a) The Deposit shall be invested in an interest-bearing account, and any interest shall follow the Deposit.
(b) The Deposit (together with interest) shall:
(i) become non-refundable to Buyer (except as otherwise provided) upon expiration of the Due Diligence Period; and
(ii) be credited to the Purchase Price at Closing.
3.3 Funding the Balance. On the Closing Date, Buyer shall deliver by federal wire transfer of immediately available funds the Purchase Price, as adjusted, less the Deposit credited to Buyer.
4. DUE DILIGENCE; TITLE, SURVEY & ZONING COMPLIANCE
4.1 Due Diligence Period. Buyer shall have [●] days after the Effective Date (the “Due Diligence Period”) to conduct all investigations deemed necessary by Buyer, including without limitation:
(a) Review of title, survey, zoning, environmental, building code and other Property matters;
(b) Physical inspections, including Phase I Environmental Site Assessment (“Phase I ESA”) in accordance with ASTM E1527-21;
(c) Review of leases, service contracts, and operating statements.
During the Due Diligence Period, Buyer may terminate this Agreement for any reason by written notice, in which case the Deposit shall be returned to Buyer and neither Party shall have further obligation (except those surviving termination).
4.2 Title Commitment; Title Objections.
(a) Within five (5) Business Days after the Effective Date, Seller shall cause the Title Company to issue to Buyer a preliminary commitment for an ALTA owner’s policy of title insurance (the “Title Commitment”) together with legible copies of all underlying exceptions (the “Exception Documents”).
(b) Buyer shall have until the later of (i) ten (10) Business Days after receipt of the Title Commitment, latest survey and Exception Documents, or (ii) the expiration of the Due Diligence Period, to deliver written notice of title objections (“Title Objections”).
(c) Seller shall have five (5) Business Days to notify Buyer whether Seller will cure any Title Objections on or before Closing. Seller’s failure to respond shall be deemed an election not to cure.
(d) If Seller elects (or is deemed to elect) not to cure, Buyer may (i) waive the Title Objections and proceed to Closing, or (ii) terminate the Agreement and receive a return of the Deposit.
4.3 Survey. Buyer may, at its sole expense, obtain an ALTA/NSPS Land Title Survey (“Survey”). If the Survey reveals matters not shown in the Title Commitment that materially and adversely affect the Property, Buyer may object pursuant to Section 4.2.
4.4 Zoning Compliance. Seller shall deliver to Buyer within five (5) Business Days after the Effective Date copies of all certificates of zoning compliance and conditional use permits in Seller’s possession. Buyer may confirm prior to Closing that (i) the current zoning permits Buyer’s intended use and (ii) there are no unremedied zoning violations. Any failure shall constitute a Title Objection.
5. CLOSING; DELIVERIES
5.1 Closing Date. The Closing shall occur on [●] (or such other date mutually agreed) at the offices of the Title Company or via remote exchange of documents and funds (the “Closing Date”).
5.2 Seller’s Closing Deliveries. On or before Closing, Seller shall deliver:
(a) Special Warranty Deed in recordable form conveying fee simple title to the Land, subject only to Permitted Exceptions;
(b) Bill of Sale for the Personal Property;
(c) Assignment and Assumption of Contracts and Warranties;
(d) FIRPTA Non-Foreign Affidavit;
(e) Closing Statement and transfer tax declarations;
(f) Updated Tenant Estoppel Certificates, if applicable;
(g) Owner’s affidavit and gap indemnity as customarily required by the Title Company; and
(h) Any other documents reasonably requested to consummate the transaction.
5.3 Buyer’s Closing Deliveries. On or before Closing, Buyer shall deliver:
(a) The balance of the Purchase Price;
(b) Counterpart signature pages to the instruments identified in Section 5.2;
(c) Evidence of authority of Buyer and signatories; and
(d) Any other documents reasonably required by the Title Company.
5.4 Costs and Prorations.
(a) Seller pays: (i) Indiana state deed recordation fee; (ii) cost of Seller’s title curative documents; and (iii) one-half of the escrow fee.
(b) Buyer pays: (i) cost of the owner’s title policy (including endorsements); (ii) Survey; (iii) one-half of the escrow fee; and (iv) any lender’s title premium (if applicable).
(c) Taxes, rents, operating expenses and utilities shall be prorated as of 11:59 p.m. the day preceding the Closing Date.
6. REPRESENTATIONS AND WARRANTIES
6.1 Seller’s Representations. Seller represents and warrants to Buyer, as of the Effective Date and again at Closing (unless otherwise stated), that:
(a) Authority. Seller is duly organized, validly existing and in good standing. Execution, delivery and performance of this Agreement are within Seller’s powers and have been duly authorized.
(b) Title. Seller is the record fee simple owner of the Land, free and clear of liens except Permitted Exceptions.
(c) Compliance with Laws. To Seller’s Knowledge, Seller has received no written notice of violation of Applicable Law (including Environmental Laws and zoning) that remains uncured.
(d) Litigation. There is no pending or, to Seller’s Knowledge, threatened litigation or condemnation affecting the Property.
(e) Hazardous Materials. To Seller’s Knowledge, no Hazardous Materials are present on the Property in violation of Environmental Laws.
(f) Contracts. Exhibit D lists all service contracts, management agreements and leases that will affect the Property post-Closing.
(g) Foreign Person. Seller is not a “foreign person” within the meaning of § 1445 of the Internal Revenue Code.
(h) Brokers. Seller’s broker is [●]; Seller shall be solely responsible for its commission.
6.2 Buyer’s Representations. Buyer represents and warrants to Seller that:
(a) Authority. Buyer is duly organized, validly existing and in good standing and has full power to execute, deliver and perform this Agreement.
(b) Funds. Buyer has (or, at Closing, will have) sufficient funds to pay the Purchase Price and perform its obligations.
(c) Brokers. Buyer’s broker is [●]; Buyer shall be solely responsible for its commission.
6.3 Survival; Cap. Seller’s representations and warranties survive Closing for [●] months, at which time they expire. Seller’s aggregate liability for breaches of its representations and warranties is capped at [● %] of the Purchase Price; provided, individual claims must exceed [US $●] (the “Basket”).
7. COVENANTS
7.1 Conduct of Business. From the Effective Date until Closing, Seller shall:
(a) Operate and maintain the Property in substantially the same manner as prior to the Effective Date;
(b) Not enter into, modify or terminate any contract or lease affecting the Property that will be binding on Buyer after Closing, without Buyer’s prior written consent (not to be unreasonably withheld); and
(c) Maintain all existing insurance in full force and effect.
7.2 Access. Seller shall afford Buyer and Buyer’s representatives reasonable access to the Property and all records during normal business hours, subject to reasonable notice.
7.3 Estoppels. Seller shall use commercially reasonable efforts to obtain and deliver to Buyer at least five (5) Business Days prior to Closing estoppel certificates from all tenants occupying more than [●]% of the rentable area (in a form reasonably acceptable to Buyer).
8. ENVIRONMENTAL MATTERS & INDEMNIFICATION
8.1 Phase I ESA. Buyer’s right to conduct a Phase I ESA is set forth in Section 4.1. If the Phase I ESA recommends a Phase II investigation, Buyer may elect to perform same upon notice to Seller; the Due Diligence Period shall automatically extend as reasonably necessary to complete the investigation.
8.2 Environmental Indemnity by Seller. From and after Closing, Seller shall indemnify, defend and hold harmless Buyer, its Affiliates, successors and assigns (each a “Buyer Indemnitee”) from and against any and all claims, damages, liabilities, fines, penalties, response costs and expenses (including reasonable attorneys’ fees) (collectively, “Losses”) arising from or attributable to:
(a) Any Release of Hazardous Materials at, on or under the Property occurring prior to Closing; or
(b) Any violation of Environmental Laws relating to the Property existing prior to Closing.
8.3 Environmental Indemnity by Buyer. From and after Closing, Buyer shall indemnify, defend and hold harmless Seller, its Affiliates, successors and assigns (each a “Seller Indemnitee”) from and against Losses arising from or attributable to:
(a) Any Release of Hazardous Materials at, on or under the Property occurring on or after Closing; or
(b) Buyer’s violation of Environmental Laws post-Closing.
8.4 Survival. The mutual environmental indemnities in this Article 8 shall survive Closing indefinitely and are not subject to the cap in Section 6.3.
[// GUIDANCE: Consider separate stand-alone environmental indemnity agreement for lender or third-party reliance.]
9. CASUALTY; CONDEMNATION
9.1 Notice. Seller shall promptly notify Buyer if, prior to Closing, all or any material portion of the Property is damaged or destroyed (“Casualty”) or becomes the subject of a condemnation proceeding (“Condemnation”).
9.2 Buyer’s Rights.
(a) Material Casualty/Condemnation. If the cost of restoration or the value of the portion taken exceeds ten percent (10%) of the Purchase Price, Buyer may (i) terminate this Agreement and receive a refund of the Deposit, or (ii) proceed to Closing and receive the insurance proceeds or condemnation award, and a credit for any deductible.
(b) Minor Casualty/Condemnation. If below such threshold, the Parties shall proceed to Closing; Seller shall assign to Buyer all proceeds and give Buyer a credit for any deductible.
10. CONDITIONS PRECEDENT
10.1 Buyer’s Conditions. Buyer’s obligation to close is conditioned on:
(a) Accuracy of Seller’s representations and warranties;
(b) Seller’s performance of covenants;
(c) Delivery of the Owner’s Policy of Title Insurance insuring fee simple title, subject only to Permitted Exceptions, in the amount of the Purchase Price;
(d) Receipt of tenant estoppels per Section 7.3;
(e) No Material Adverse Change to the Property; and
(f) Receipt of zoning letter or zoning endorsement confirming compliance with intended use.
10.2 Seller’s Conditions. Seller’s obligation to close is conditioned on:
(a) Accuracy of Buyer’s representations and warranties;
(b) Buyer’s performance of covenants; and
(c) Receipt of the Purchase Price.
Any condition may be waived only in writing by the benefiting Party.
11. DEFAULT; REMEDIES
11.1 Buyer Default. If Buyer defaults prior to Closing and fails to cure within three (3) Business Days after notice, Seller’s sole remedy shall be to terminate this Agreement and receive the Deposit as liquidated damages, the Parties acknowledging that actual damages are difficult to ascertain and the Deposit constitutes a reasonable estimate. Seller expressly waives any right to seek specific performance.
11.2 Seller Default. If Seller defaults and fails to cure within three (3) Business Days after notice, Buyer may (a) terminate this Agreement and receive a refund of the Deposit plus reimbursement of its actual third-party due diligence costs not to exceed [US $●], or (b) seek specific performance, it being acknowledged that the Property is unique and monetary damages would be inadequate.
11.3 Attorney Fees. The prevailing Party in any action to enforce this Agreement is entitled to recover reasonable attorney fees and court costs.
12. RISK ALLOCATION
12.1 Indemnification. The indemnities in Section 8 and any additional indemnities expressly set forth herein survive Closing and are independent obligations.
12.2 Limitation of Liability. Except for (i) fraud, (ii) willful misconduct, or (iii) environmental indemnity obligations, neither Party shall be liable to the other for consequential, special, punitive or exemplary damages. [// GUIDANCE: Insert negotiated liability cap per metadata; e.g., “Seller’s aggregate liability is capped at US $●.”]
12.3 Insurance.
(a) Seller shall maintain, until Closing, property and liability insurance in commercially reasonable amounts.
(b) Buyer shall obtain, effective as of Closing, commercial general liability insurance with limits not less than [US $●] per occurrence, naming Seller as an additional insured for claims arising prior to Closing.
12.4 Force Majeure. Neither Party shall be liable for failure to perform caused by events beyond its reasonable control, including acts of God, terrorism, strikes or governmental action; provided, force majeure does not extend payment obligations.
13. DISPUTE RESOLUTION
13.1 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Indiana, without regard to conflict of laws principles.
13.2 Forum Selection. Subject to Section 13.3, all actions arising out of this Agreement shall be filed in the state courts located in [COUNTY], Indiana, and the Parties hereby submit to, and waive objections to, such jurisdiction and venue.
13.3 OPTIONAL Arbitration. [Initial to elect: Seller ___ Buyer ___]
If both Parties initial this Section 13.3, any dispute shall be resolved by binding arbitration administered by the American Arbitration Association (“AAA”) under its Commercial Arbitration Rules, held in [CITY, Indiana], before a single arbitrator who is a retired Indiana judge or an attorney with at least ten (10) years of commercial real estate experience. Judgment on the award may be entered in any court of competent jurisdiction.
13.4 Jury Trial Waiver. EACH PARTY KNOWINGLY AND VOLUNTARILY WAIVES TRIAL BY JURY IN ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT.
13.5 Specific Performance. The Parties acknowledge that the Property is unique and that monetary damages may be inadequate; therefore, specific performance is an appropriate remedy (subject to Section 11).
14. MISCELLANEOUS
14.1 Notices. All notices shall be in writing and deemed given on (a) the date of delivery by hand, (b) one (1) Business Day after deposit with a nationally recognized overnight courier, or (c) upon confirmation of electronic mail, addressed to the Parties at the addresses set forth below (or such other address as a Party may designate).
14.2 Amendment; Waiver. This Agreement may be amended only by written instrument executed by both Parties. Waiver of any provision must be in writing and signed by the waiving Party; no waiver is continuing except as expressly provided.
14.3 Assignment. Buyer may not assign this Agreement without Seller’s prior written consent, except to an Affiliate of Buyer that is controlled by or under common control with Buyer and possesses adequate financial capacity, provided Buyer remains liable. Any other assignment in violation of this Section 14.3 is void.
14.4 Successors and Assigns. Subject to Section 14.3, this Agreement binds and benefits the Parties and their respective successors and permitted assigns.
14.5 Severability. If any provision is declared invalid, the remaining provisions remain enforceable, and the invalid provision shall be reformed to reflect the Parties’ intent to the maximum extent permitted by law.
14.6 Entire Agreement. This Agreement, including the Exhibits and any documents delivered at Closing, constitutes the entire agreement of the Parties with respect to the Property and supersedes all prior agreements, representations and understandings.
14.7 Counterparts; Electronic Signatures. This Agreement may be executed in counterparts, each of which is deemed an original and all of which constitute one instrument. Signatures transmitted electronically (e.g., PDF or DocuSign) are binding.
14.8 Time of Essence. Time is of the essence with respect to all dates and deadlines set forth herein.
14.9 Further Assurances. The Parties shall execute and deliver such additional documents and take such further actions as are reasonably necessary to carry out the intent of this Agreement.
14.10 Recording. Except for recordation of the Deed (and any memorandum of this Agreement expressly agreed by the Parties), neither Party shall record this Agreement.
15. EXECUTION BLOCK
IN WITNESS WHEREOF, the Parties have executed this Purchase and Sale Agreement as of the Effective Date.
SELLER:
[SELLER NAME], a [●]
By: ______
Name: _____
Title: _______
BUYER:
[BUYER NAME], a [●]
By: ______
Name: _____
Title: _______
[// GUIDANCE: Confirm corporate authority documentation (e.g., resolutions, incumbency certificates) and attach to closing set.]
EXHIBITS
Exhibit A – Legal Description of Land
Exhibit B – Personal Property
Exhibit C – Excluded Assets
Exhibit D – Service Contracts / Leases
Exhibit E – Form of Assignment and Assumption of Contracts
Exhibit F – Form of Bill of Sale
Exhibit G – Form of FIRPTA Affidavit
Exhibit H – Form of Tenant Estoppel Certificate
[// GUIDANCE: Adapt exhibit forms to local recording and title requirements. For Indiana deeds, include “prepared by” statement and affirmation clause per Ind. Code 32-21-2-3.]