PURCHASE AND SALE AGREEMENT
(Commercial Real Property – State of Maine)
[// GUIDANCE: Replace bracketed items with deal-specific information, attach or schedule supporting documents, and delete all guidance comments prior to execution.]
TABLE OF CONTENTS
I. Document Header
II. Definitions
III. Operative Provisions
IV. Representations & Warranties
V. Covenants & Restrictions
VI. Default & Remedies
VII. Risk Allocation
VIII. Dispute Resolution
IX. General Provisions
X. Execution Block
I. DOCUMENT HEADER
This PURCHASE AND SALE AGREEMENT (this “Agreement”) is made and entered into effective 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”). Seller and Buyer are sometimes referred to herein individually as a “Party” and collectively as the “Parties.”
Recitals
A. Seller is the fee simple owner of the real property commonly known as [PROPERTY NAME / ADDRESS], located in [COUNTY], Maine, together with all improvements, easements, privileges, rights, and appurtenances thereto (collectively, 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 intend that the transaction comply with all applicable Maine real estate, environmental, zoning, and title requirements.
NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:
II. DEFINITIONS
For purposes of this Agreement, the following terms have the meanings set forth below. Defined terms appear in initial capital letters and apply equally to singular and plural forms.
“Affiliate” – Any person or entity that, directly or indirectly, Controls, is Controlled by, or is under common Control with a Party.
“Agreement” – This Purchase and Sale Agreement, including all exhibits, schedules, and attachments hereto.
“Appurtenances” – All rights, privileges, and easements benefiting the Property.
“Approval Period” – The period commencing on the Effective Date and expiring at 5:00 p.m. Eastern Time on [NUMBER] days thereafter, unless earlier terminated or extended pursuant to this Agreement.
“Business Day” – Any day other than Saturday, Sunday, or a Maine state or U.S. federal holiday.
“Closing” – The consummation of the purchase and sale contemplated herein, to occur on the Closing Date.
“Closing Date” – [DATE], or such earlier or later date as the Parties may mutually agree in writing.
“Control” – Possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of an entity.
“Deposit” – The earnest money deposit described in Section 3.2.
“Environmental Laws” – All applicable federal, state, and local statutes, regulations, ordinances, rules, orders, and common-law duties relating to pollution, protection of human health, the environment, or natural resources, including but not limited to the Comprehensive Environmental Response, Compensation, and Liability Act (42 U.S.C. §9601 et seq.), the Resource Conservation and Recovery Act (42 U.S.C. §6901 et seq.), and the Clean Water Act (33 U.S.C. §1251 et seq.), together with the regulations of the Maine Department of Environmental Protection.
“Hazardous Materials” – Any substance, material, or waste regulated under Environmental Laws, including petroleum products and asbestos-containing materials.
“Indemnified Environmental Claim” – Any third-party claim, governmental action, loss, damage, fine, penalty, cost, or expense arising out of or relating to Hazardous Materials or Environmental Laws, as further described in Section 7.2.
“Intended Use” – Buyer’s contemplated use of the Property as [DESCRIBE USE – e.g., “warehouse and distribution facility”].
“Purchase Price” – The total consideration payable by Buyer to Seller for the Property, as set forth in Section 3.1.
“Title Company” – [TITLE COMPANY NAME], or another title insurance underwriter authorized to issue policies in Maine and acceptable to the Parties.
“Title Commitment” – The preliminary title report or commitment for an ALTA Owner’s Policy issued by the Title Company.
“Zoning Report” – A zoning verification letter from the applicable municipality or a third-party zoning consultant acceptable to Buyer.
III. OPERATIVE PROVISIONS
3.1 Purchase Price. Buyer shall pay Seller [PURCHASE PRICE – in words and figures] (the “Purchase Price”), subject to the prorations, adjustments, and credits described herein.
3.2 Deposit. Within [TWO (2)] Business Days after the Effective Date, Buyer shall deposit [DEPOSIT AMOUNT] (the “Deposit”) with the Title Company, to be held in an interest-bearing, federally-insured escrow account. The Deposit, together with any interest earned thereon, shall be applied to the Purchase Price at Closing or disbursed as otherwise provided herein.
3.3 Payment of Balance. At Closing, Buyer shall deliver the balance of the Purchase Price, adjusted for prorations and credits, by federal wire transfer of immediately available funds.
3.4 Conditions Precedent to Buyer’s Obligations. Buyer’s obligation to close is contingent upon the following (collectively, the “Buyer Conditions”):
a. Title Company shall have issued (or be unconditionally committed to issue) the Title Policy insuring good and marketable fee simple title to the Property, subject only to Permitted Exceptions.
b. Buyer shall have approved, in its sole discretion, the results of its due diligence investigations, including the Title Commitment, survey, zoning, environmental, and physical inspections.
c. Seller shall have performed all covenants and satisfied all conditions required of Seller at or before Closing.
3.5 Conditions Precedent to Seller’s Obligations. Seller’s obligation to close is contingent upon the following (collectively, the “Seller Conditions”):
a. Buyer shall have delivered the Purchase Price and all closing deliverables in accordance with this Agreement.
b. Buyer shall have performed all covenants and satisfied all conditions required of Buyer at or before Closing.
3.6 Failure of Conditions. If any Buyer Condition is not satisfied or waived by Buyer in writing on or before the applicable deadline, Buyer may terminate this Agreement by written notice to Seller and Title Company, whereupon the Deposit shall be returned to Buyer and neither Party shall have further liability (except those obligations expressly stated to survive termination). If any Seller Condition is not satisfied or waived by Seller, Seller may elect the same remedy.
3.7 Title and Survey.
a. Within [FIVE (5)] Business Days after the Effective Date, Seller shall cause the Title Company to deliver the Title Commitment to Buyer.
b. Buyer shall have [TITLE OBJECTION PERIOD – e.g., “fifteen (15) Business Days”] after receipt of the later of the Title Commitment or current ALTA survey to provide written notice of any Title Objections.
c. Seller shall have [CURE PERIOD – e.g., “ten (10) Business Days”] to cure or agree to cure the Title Objections. If Seller fails or refuses to cure, Buyer may (i) terminate this Agreement and receive a return of the Deposit, or (ii) waive the uncured objections and proceed to Closing, in which case such matters become Permitted Exceptions.
3.8 Zoning Compliance.
a. During the Approval Period, Buyer may obtain a Zoning Report confirming that the Intended Use is permitted under applicable municipal ordinances.
b. If the Zoning Report is unacceptable to Buyer, Buyer may terminate this Agreement prior to the expiration of the Approval Period by written notice, whereupon the Deposit shall be returned to Buyer.
3.9 Environmental Investigations.
a. Buyer may conduct Phase I Environmental Site Assessments, soil borings, and other reasonable environmental tests, provided Buyer restores the Property and indemnifies Seller from Mechanics’ Liens.
b. If the results disclose Hazardous Materials or other environmental conditions unsatisfactory to Buyer, Buyer may terminate this Agreement prior to the expiration of the Approval Period and receive a return of the Deposit.
3.10 Closing Deliverables.
a. Seller Deliverables:
(i) Statutory Warranty Deed in recordable form conveying fee simple title;
(ii) Bill of Sale for personal property, if any;
(iii) Assignment of leases, contracts, and permits;
(iv) FIRPTA non-foreign affidavit;
(v) Certificate of non-foreign person under 26 U.S.C. §1445;
(vi) Evidence of corporate/organizational authority;
(vii) Updated rent roll, operating statements, and keys.
b. Buyer Deliverables:
(i) Purchase Price funds;
(ii) Assumption agreements for leases, contracts, and permits;
(iii) Evidence of corporate/organizational authority.
3.11 Prorations and Closing Costs.
a. Real estate taxes, rents, operating expenses, and utilities shall be prorated as of 12:01 a.m. on the Closing Date.
b. Maine real estate transfer tax and recording fees shall be paid [ALLOCATE BETWEEN PARTIES].
c. Title insurance premium and escrow fees shall be paid [ALLOCATE BETWEEN PARTIES].
IV. REPRESENTATIONS & WARRANTIES
4.1 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 formation jurisdiction;
b. It has full power and authority to execute, deliver, and perform this Agreement;
c. This Agreement constitutes a legal, valid, and binding obligation enforceable against it in accordance with its terms.
4.2 Seller’s Representations. Seller further represents and warrants to Buyer that as of the Effective Date and as of Closing:
a. Title. Seller is the sole fee simple owner of the Property, free and clear of all liens except those that will be released at Closing.
b. No Condemnation. Seller has not received written notice of any pending or contemplated condemnation or eminent domain proceeding.
c. Compliance with Laws. To Seller’s Knowledge, the Property is in compliance with all applicable laws, including zoning ordinances and Environmental Laws.
d. Hazardous Materials. Except as disclosed in [SCHEDULE 4.2(d)], Seller has not generated, stored, or disposed of Hazardous Materials on the Property in violation of Environmental Laws.
e. Litigation. There is no pending litigation or governmental investigation relating to the Property.
f. Leases and Contracts. All leases and service contracts are accurately listed on [SCHEDULE 4.2(f)], and Seller is not in default thereunder.
g. Foreign Person. Seller is not a “foreign person” within the meaning of 26 U.S.C. §1445.
4.3 Survival. The representations and warranties in Sections 4.1 and 4.2 shall survive Closing for [SURVIVAL PERIOD – e.g., “twelve (12) months”] (the “Survival Period”). No Party shall have liability for any claim not asserted in writing before the expiration of the Survival Period.
[// GUIDANCE: Materiality qualifiers and knowledge qualifiers can be adjusted to reflect due-diligence results and negotiation dynamics.]
V. COVENANTS & RESTRICTIONS
5.1 Seller’s Pre-Closing Covenants. From the Effective Date until Closing, Seller shall:
a. Operate and maintain the Property in substantially the same manner as before the Effective Date;
b. Not enter into, modify, or terminate any lease or contract affecting the Property without Buyer’s prior written consent;
c. Maintain existing insurance coverage;
d. Provide Buyer prompt written notice of any event that would make any representation or warranty materially untrue.
5.2 Buyer’s Covenants. Buyer shall:
a. Conduct due diligence in a manner that does not unreasonably disrupt Seller’s operations or tenants;
b. Restore any portion of the Property disturbed by inspections;
c. Maintain, at its expense, commercial general liability insurance covering all entry and testing activities with a combined single limit of not less than [$2,000,000].
5.3 Post-Closing Restrictive Covenants. [OPTIONAL] [INCLUDE ANY POST-CLOSING USE RESTRICTIONS, DEVELOPMENT LIMITATIONS, OR EASEMENTS].
VI. DEFAULT & REMEDIES
6.1 Buyer Default. If Buyer fails to close and is otherwise in default beyond any applicable notice and cure period, Seller’s sole remedy shall be to retain the Deposit as liquidated damages, the Parties acknowledging that actual damages are difficult to ascertain and that the Deposit constitutes a reasonable estimate thereof. [ALTERNATIVE: Provide for specific performance in favor of Seller.]
6.2 Seller Default. If Seller fails to close and is otherwise in default beyond any applicable notice and cure period, Buyer may elect, as its sole and exclusive remedies:
a. Terminate this Agreement and receive an immediate refund of the Deposit, plus reimbursement of Buyer’s actual documented third-party due-diligence costs not to exceed [CAP AMOUNT]; or
b. Seek specific performance of Seller’s obligation to convey the Property.
6.3 Notice and Cure. A Party asserting default must deliver written notice to the other Party specifying the default in reasonable detail. The defaulting Party shall have [FIVE (5)] Business Days (monetary defaults) or [TEN (10)] Business Days (non-monetary defaults) to cure before remedies may be pursued.
6.4 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.
VII. RISK ALLOCATION
7.1 Insurance. Prior to Closing, Seller shall maintain its existing property and liability insurance policies. Buyer shall maintain insurance as required by Section 5.2(c).
7.2 Environmental Indemnity.
a. Seller’s Indemnity. From and after Closing, Seller shall indemnify, defend, and hold harmless Buyer and its Affiliates from any Indemnified Environmental Claim arising out of (i) the presence or release of Hazardous Materials at, on, or beneath the Property attributable to conditions existing before Closing, or (ii) Seller’s violation of Environmental Laws.
b. Buyer’s Indemnity. From and after Closing, Buyer shall indemnify, defend, and hold harmless Seller and its Affiliates from any Indemnified Environmental Claim arising out of Buyer’s acts or omissions on or after Closing.
c. Procedures. The indemnified Party shall provide prompt written notice and allow the indemnifying Party the opportunity to defend. Failure to give prompt notice shall not relieve the indemnifying Party except to the extent prejudiced.
7.3 Limitation of Liability. Except for fraud, willful misconduct, and the indemnity obligations herein, each Party’s aggregate liability shall not exceed [LIABILITY CAP – e.g., “10% of the Purchase Price”].
7.4 Force Majeure. Neither Party shall be liable for failure to perform caused by events beyond its reasonable control, including natural disasters, acts of war, terrorism, or governmental orders, provided the affected Party gives prompt notice and uses commercially reasonable efforts to mitigate. The Closing Date shall be extended for up to [30] days for any Force Majeure delay.
VIII. DISPUTE RESOLUTION
8.1 Governing Law. This Agreement and any dispute arising hereunder shall be governed by and construed in accordance with the laws of the State of Maine, without regard to conflicts-of-law principles.
8.2 Forum Selection. Subject to Section 8.3, the Parties consent to the exclusive jurisdiction of the state courts of competent jurisdiction located in [COUNTY], Maine, and waive any objection to venue therein.
8.3 Arbitration (Optional). [ARBITRATION – INCLUDE OR DELETE]
a. Any dispute not resolved by negotiation shall be submitted to binding arbitration administered by the American Arbitration Association under its Commercial Arbitration Rules.
b. The arbitration shall be conducted by a single arbitrator in [CITY, Maine].
c. Judgment on the award may be entered in any court of competent jurisdiction.
8.4 Jury Trial Waiver (Optional). [IF INCLUDED] EACH PARTY HEREBY KNOWINGLY, VOLUNTARILY, AND INTENTIONALLY WAIVES THE RIGHT TO A TRIAL BY JURY IN ANY ACTION ARISING OUT OF THIS AGREEMENT.
8.5 Specific Performance. The Parties acknowledge that the Property is unique and that monetary damages may be inadequate. Accordingly, each Party shall have the right to seek specific performance or injunctive relief without the necessity of posting a bond.
IX. GENERAL PROVISIONS
9.1 Notices. All notices shall be in writing and deemed given when (i) delivered personally, (ii) deposited with a nationally recognized overnight courier, or (iii) sent by email with confirmation of receipt, to the addresses for each Party set forth below (or such other address as a Party may designate by notice).
9.2 Entire Agreement. This Agreement, together with its exhibits and schedules, constitutes the entire agreement between the Parties and supersedes all prior negotiations and understandings.
9.3 Amendments and Waivers. No amendment or waiver shall be effective unless in a writing signed by the Party against whom enforcement is sought.
9.4 Assignment. Neither Party may assign this Agreement without the prior written consent of the other, except that Buyer may assign to an Affiliate or financing entity upon written notice to Seller and without relieving Buyer of liability.
9.5 Successors and Assigns. Subject to Section 9.4, this Agreement shall bind and inure to the benefit of the Parties and their respective successors and permitted assigns.
9.6 Severability. If any provision is determined unenforceable, the remaining provisions shall remain in full force, and the unenforceable provision shall be reformed to the minimum extent necessary to render it enforceable.
9.7 Counterparts; Electronic Signatures. This Agreement may be executed in counterparts, each of which shall be deemed an original. Signatures transmitted by electronic means shall be deemed original signatures for all purposes.
9.8 Time of Essence. Time is of the essence of each provision of this Agreement.
9.9 No Third-Party Beneficiaries. Except as expressly provided, this Agreement confers no rights on any person or entity other than the Parties and their permitted successors and assigns.
X. EXECUTION BLOCK
IN WITNESS WHEREOF, the Parties have executed this Purchase and Sale Agreement as of the Effective Date.
SELLER:
[SELLER LEGAL NAME]
By: ____
Name: ____
Title: _____
Date: _________
BUYER:
[BUYER LEGAL NAME]
By: ____
Name: ____
Title: _____
Date: _________
[// GUIDANCE: Maine does not generally require notarization of the purchase agreement itself, but the deed delivered at Closing must be notarized. Add witnesses if required by corporate charter.]