COMMERCIAL PURCHASE AND SALE AGREEMENT
(Tennessee – Commercial Real Estate)
[// GUIDANCE: This template is drafted to Tennessee commercial real estate practice. Bracketed items (“[ ]”) are intended for user customization; delete inapplicable optional provisions.]
TABLE OF CONTENTS
- Document Header
- Definitions
- Purchase and Sale of Property
- Purchase Price; Deposit; Payment Terms
- Title and Survey Matters
- Due Diligence; Inspections; Zoning & Environmental
- Representations and Warranties
- Covenants
- Conditions Precedent
- Closing
- Default; Remedies
- Risk Allocation
- Dispute Resolution
- General Provisions
- Execution Block
- Exhibits & Schedules
1. DOCUMENT HEADER
COMMERCIAL PURCHASE AND SALE AGREEMENT (“Agreement”) made effective 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”).
RECITALS
A. Seller is the fee simple owner of certain real property commonly known as [PROPERTY ADDRESS] and more fully described on Exhibit A (the “Land”), together with all improvements, fixtures, permits, entitlements, and appurtenances (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.
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are acknowledged, the Parties agree as follows:
2. DEFINITIONS
The following capitalized terms have the meanings set forth below and apply throughout this Agreement:
“Affiliate” – Any entity directly or indirectly controlling, controlled by, or under common control with a Party.
“Agreement” – As defined in the Preamble; includes all Exhibits and Schedules.
“Business Day” – Any day other than Saturday, Sunday, or legal holidays in the State of Tennessee.
“Closing” – The consummation of the transaction contemplated herein on the Closing Date.
“Closing Date” – The date on which Closing occurs pursuant to Section 10.1.
“Deposit” – The earnest money described in Section 4.2.
“Environmental Laws” – All federal, state, and local statutes, regulations, ordinances, and common-law doctrines relating to pollution or protection of human health or the environment.
“Escrow Agent” – [TITLE/ESCROW COMPANY NAME], as further defined in Section 4.2.
“Inspection Period” – The period set forth in Section 6.1 for Buyer’s due diligence review.
“Permitted Exceptions” – Those title exceptions approved or deemed approved by Buyer pursuant to Section 5.
“Purchase Price” – As defined in Section 4.1.
“Survey” – ALTA/NSPS Land Title Survey commissioned under Section 5.2.
3. PURCHASE AND SALE OF PROPERTY
3.1 Sale of Property. Subject to the terms of this Agreement, Seller agrees to sell, convey, and transfer, and Buyer agrees to purchase, the Property.
3.2 Personal Property. The sale includes all tangible personal property, fixtures, machinery, equipment, and intangible rights owned by Seller and used in connection with the Property, excluding [EXCLUSIONS].
4. PURCHASE PRICE; DEPOSIT; PAYMENT TERMS
4.1 Purchase Price. The total purchase price for the Property is [ALPHANUMERIC DOLLAR AMOUNT] (“Purchase Price”), subject to adjustments and prorations under Section 10.3.
4.2 Deposit. Within [NUMBER] Business Days after the Effective Date, Buyer shall deposit [ALPHANUMERIC AMOUNT] (“Deposit”) with Escrow Agent by [WIRE/ACH/OTHER] in immediately available funds. The Deposit shall be:
(a) held in an interest-bearing account;
(b) applicable to the Purchase Price at Closing; and
(c) non-refundable to Buyer after expiration of the Inspection Period, except upon Seller default or failure of a Condition Precedent.
4.3 Balance of Purchase Price. Buyer shall deliver the balance of the Purchase Price to Escrow Agent in immediately available funds no later than 11:00 a.m. Central Time on the Closing Date.
4.4 Financing Contingency. [Optional – Insert financing contingency with loan terms or strike if all-cash transaction.]
5. TITLE AND SURVEY MATTERS
5.1 Title Commitment. Within [NUMBER] Business Days after the Effective Date, Seller shall cause [TITLE COMPANY] (“Title Company”) to deliver to Buyer (i) a current commitment for an owner’s policy of title insurance (the “Commitment”) and (ii) legible copies of all exception documents.
5.2 Survey. Buyer may obtain, at its sole cost, a Survey meeting the latest ALTA/NSPS standards and the requirements of the Title Company for issuance of extended coverage.
5.3 Buyer Objections. Buyer shall have until the earlier of (i) [NUMBER] Business Days after receipt of the last of the Commitment and Survey or (ii) the end of the Inspection Period to object in writing to any title or survey matter (“Objection Notice”).
5.4 Seller Cure. Seller may elect, within [NUMBER] Business Days following the Objection Notice, to cure such objections. Seller’s failure to respond constitutes an election not to cure.
5.5 Permitted Exceptions. All matters not timely objected to, and all matters timely objected to but not cured, shall be “Permitted Exceptions,” provided that monetary liens created by Seller shall be removed at or prior to Closing.
[// GUIDANCE: Tennessee recording statutes generally require recordation of the deed within the county register of deeds pursuant to Tenn. Code Ann. Title 66. Provide the deed in recordable form in Exhibit B.]
6. DUE DILIGENCE; INSPECTIONS; ZONING & ENVIRONMENTAL
6.1 Inspection Period. Buyer shall have [NUMBER] days after the Effective Date (the “Inspection Period”) to conduct, at Buyer’s expense, all investigations of the Property. Buyer may terminate this Agreement prior to expiration of the Inspection Period by written notice, in which event the Deposit shall be returned and neither Party shall have further obligation.
6.2 Access; Indemnity. Buyer, its agents, and contractors shall have reasonable access to the Property upon [NUMBER] Business Days’ prior notice to Seller. Buyer shall (i) repair any damage caused by Buyer’s inspections, and (ii) indemnify Seller from third-party claims arising therefrom, except to the extent caused by Seller.
6.3 Zoning & Land Use. Seller shall deliver to Buyer copies of all zoning approvals, variances, conditional use permits, site plans, and certificates of occupancy in Seller’s possession. Buyer shall, during the Inspection Period, confirm that the current zoning designation [INSERT ZONING CLASSIFICATION] permits Buyer’s intended use.
6.4 Environmental Matters.
(a) Phase I/Phase II. Buyer may obtain a Phase I ESA and, if recommended, a Phase II ESA.
(b) Environmental Reports. Seller shall provide Buyer with all environmental studies, audits, permits, and notices relating to the Property.
(c) Notice of Environmental Conditions. Seller shall promptly notify Buyer of any environmental condition discovered prior to Closing.
6.5 1031 Exchange. [Optional – Include exchange cooperation language.]
7. REPRESENTATIONS AND WARRANTIES
7.1 Seller’s Representations. Seller represents and warrants to Buyer as of the Effective Date and again as of Closing that:
(a) Authority. Seller is duly organized, in good standing, and has full power to execute and perform this Agreement.
(b) Title. Seller holds marketable fee simple title to the Property, free of liens other than Permitted Exceptions.
(c) No Condemnation. Seller has received no written notice of pending or threatened condemnation.
(d) Compliance. To Seller’s Knowledge, the Property is in compliance with applicable zoning, building, fire, accessibility, and Environmental Laws.
(e) Hazardous Substances. Except as disclosed in Schedule 7.1(e), Seller has not received written notice of release or violation of Environmental Laws.
(f) Litigation. No pending litigation or claims materially affecting the Property exist.
(g) Foreign Person. Seller is not a “foreign person” under 26 U.S.C. § 1445(f)(3).
7.2 Buyer’s Representations. Buyer represents and warrants to Seller that:
(a) Authority. Buyer is duly organized, in good standing, and possesses requisite power to enter into this Agreement.
(b) Investment Decision. Buyer is an informed and sophisticated purchaser and has conducted, or will conduct, its own independent due diligence.
7.3 Survival. Seller’s representations and warranties shall survive Closing for [SURVIVAL PERIOD, e.g., 12 months] (“Survival Period”).
8. COVENANTS
8.1 Operations Prior to Closing. 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 any lease, contract, or encumbrance affecting the Property without Buyer’s consent (not to be unreasonably withheld);
(c) maintain current insurance coverage.
8.2 Notice of Changes. Seller shall promptly notify Buyer of any material change in the status of the Property or the accuracy of Seller’s representations.
9. CONDITIONS PRECEDENT
9.1 Buyer’s Conditions. Buyer’s obligation to close is conditioned upon:
(a) Title Company’s commitment to issue, at Closing, an owner’s policy in the amount of the Purchase Price, subject only to Permitted Exceptions;
(b) Accuracy of Seller’s representations as of Closing;
(c) No Material Adverse Change;
(d) Receipt and approval of all third-party consents specified in Schedule 9.1(d);
(e) Completion of Buyer’s Financing (if applicable).
9.2 Seller’s Conditions. Seller’s obligation to close is conditioned upon:
(a) Buyer’s payment of the Purchase Price;
(b) Buyer’s representations being true and correct as of Closing;
(c) Receipt of any required government approvals for transfer.
9.3 Failure of Condition. If any condition fails despite the diligent efforts of the benefited Party, such Party may terminate this Agreement and the Deposit shall be returned, unless the failure results from such Party’s breach.
10. CLOSING
10.1 Closing Date. Closing shall occur on [DATE] or such other date as the Parties may mutually agree, via escrow with the Escrow Agent.
10.2 Closing Deliverables.
(a) Seller shall deliver:
(i) Special Warranty Deed (statutory form) duly executed and acknowledged;
(ii) Bill of Sale for personal property;
(iii) Assignment of intangible property;
(iv) FIRPTA affidavit;
(v) Owner’s affidavit and gap indemnity required by the Title Company;
(vi) Closing certificate confirming representations.
(b) Buyer shall deliver:
(i) Balance of Purchase Price;
(ii) Closing certificate;
(iii) Tennessee transfer tax affidavit (if applicable).
10.3 Prorations and Adjustments. Real estate taxes, assessments, rents, utilities, and operating expenses shall be prorated as of 11:59 p.m. Central Time on the day preceding the Closing Date.
10.4 Closing Costs.
(a) Seller pays: (i) deed preparation and transfer tax; (ii) cost to cure title defects; (iii) one-half of Escrow Agent’s fee.
(b) Buyer pays: (i) title insurance premium; (ii) Survey; (iii) recording costs; (iv) one-half of Escrow Agent’s fee.
11. DEFAULT; REMEDIES
11.1 Seller Default. If Seller defaults and fails to cure within [NUMBER] Business Days after notice, Buyer may (a) terminate and receive the Deposit plus Buyer’s actual out-of-pocket costs (not to exceed [CAP]), or (b) seek specific performance of this Agreement.
11.2 Buyer Default. If Buyer defaults and fails to cure within [NUMBER] Business Days after notice, Seller’s sole remedy shall be to retain the Deposit as liquidated damages [or pursue all remedies at law/equity – select one].
11.3 Attorneys’ Fees. The prevailing Party in any action shall be entitled to reasonable attorneys’ fees and costs.
12. RISK ALLOCATION
12.1 Environmental Indemnification.
(a) From and after Closing, Buyer shall indemnify, defend, and hold Seller harmless from all claims, costs, and liabilities arising from the presence, release, or migration of Hazardous Substances in, on, or under the Property, except to the extent arising from Seller’s breach of representations or pre-Closing releases caused by Seller.
(b) [Optional – Reverse indemnity for pre-Closing conditions caused by Seller.]
12.2 General Indemnification. Each Party shall indemnify, defend, and hold the other harmless from third-party claims arising from (i) breaches of this Agreement, or (ii) the indemnifying Party’s gross negligence or willful misconduct.
12.3 Limitation of Liability. Except for (a) fraud, (b) willful misconduct, or (c) obligations under Section 12.1, each Party’s aggregate liability shall not exceed [DOLLAR CAP OR “Purchase Price”].
12.4 Insurance. Until Closing, Seller shall maintain property and liability insurance in commercially reasonable amounts.
12.5 Force Majeure. Neither Party shall be liable for delay caused by acts of God, governmental action, labor disputes, or other events beyond such Party’s reasonable control; however, this Section shall not excuse financial obligations.
13. DISPUTE RESOLUTION
13.1 Governing Law. This Agreement is governed by the laws of the State of Tennessee, without regard to conflict-of-law principles.
13.2 Forum Selection. Exclusive venue for any suit arising out of this Agreement shall lie in the state courts located in [COUNTY], Tennessee.
13.3 Arbitration. [Optional – If elected, insert comprehensive commercial arbitration clause under AAA Commercial Arbitration Rules, seat in Nashville, TN, with three arbitrators. If not elected, delete Section 13.3.]
13.4 Jury Trial Waiver. [Optional – The Parties knowingly and voluntarily waive trial by jury in any action relating to this Agreement.]
13.5 Specific Performance. The Parties acknowledge that the Property is unique; therefore, in addition to any other remedies, specific performance is an appropriate remedy for breach.
14. GENERAL PROVISIONS
14.1 Notices. All notices must be in writing and delivered by (i) hand, (ii) nationally recognized overnight courier, or (iii) email with confirmation, to the addresses set forth below (or as later designated). Notice is deemed received upon delivery or refusal.
14.2 Entire Agreement. This Agreement constitutes the entire agreement of the Parties and supersedes all prior understandings.
14.3 Amendments. No amendment is effective unless in writing and signed by both Parties.
14.4 Waiver. A waiver must be in writing; a waiver of any breach is not a waiver of any other breach.
14.5 Assignment. Buyer may not assign this Agreement without Seller’s prior written consent; provided, however, Buyer may assign to an Affiliate controlled by Buyer upon notice to Seller.
14.6 Successors and Assigns. This Agreement binds and benefits the Parties and their respective successors and permitted assigns.
14.7 Severability. If any provision is unenforceable, the remaining provisions remain in effect, and the unenforceable provision shall be reformed to the minimum extent necessary.
14.8 Counterparts; Electronic Signatures. This Agreement may be executed in counterparts, each of which is deemed an original. Electronic signatures and PDF execution shall be valid and binding.
14.9 Confidentiality. Except as required by law, the Parties shall keep this Agreement and transaction details confidential.
14.10 Further Assurances. Each Party shall execute and deliver additional documents and perform further acts reasonably necessary to consummate the transaction.
15. EXECUTION BLOCK
IN WITNESS WHEREOF, the Parties have executed this Agreement effective as of the Effective Date.
SELLER:
[SELLER LEGAL NAME]
By: _____
Name: _____
Title: _____
Date: _______
BUYER:
[BUYER LEGAL NAME]
By: _____
Name: _____
Title: _____
Date: _______
[// GUIDANCE: Tennessee does not universally require witnesses for commercial real estate contracts, but the deed to be recorded must be acknowledged before a notary public. Confirm county-specific recording requirements.]
16. EXHIBITS & SCHEDULES
Exhibit A – Legal Description of the Land
Exhibit B – Form of Special Warranty Deed
Exhibit C – Bill of Sale
Exhibit D – Assignment of Intangibles
Schedule 7.1(e) – Environmental Disclosures
Schedule 9.1(d) – Required Third-Party Consents
[// GUIDANCE: Prior to circulation, complete all placeholders, attach the referenced exhibits/schedules, and conform the title commitment and survey data. Verify compliance with current Tennessee transfer tax, recordation fees, and any county-specific disclosure requirements.]