Sale and Leaseback Agreement

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Sale and Leaseback Agreement Powered By Docstoc
					A Sale and Leaseback Agreement is an instrument governing a transaction wherein the
owner of a property sells that property and then leases it back from the buyer. The
purpose of the leaseback is to free up the original owner's capital while allowing the
owner to retain possession and use of the property. The type of property involved can
be anything from residential or commercial real estate to equipment or vehicles. This
Agreement can be used by individuals or small businesses that want to receive
immediate capital for certain property while still retaining possession.
              SALE AND LEASEBACK AGREEMENT

                    AGREEMENT TO SELL PROPERTY

       This Agreement to Sell Property (this “Agreement”) is hereby made and entered
into on this ____ day of ____, 20___ (the “Effective Date”) by and between
__________________ (“Seller”) and _______________ (“Purchaser”).

                                       RECITALS

        WHEREAS, Seller is the legal owner of certain real property being, lying, and
situated in the County of _______________ in the State of _________________, such
real Property having an address of ___________________________ and more
particularly described in Exhibit “A” attached hereto (the “Property”); and

       WHEREAS, Seller and Purchaser desire that Seller convey the Property and
improvements thereon to Purchaser and, that thereupon, Purchaser shall lease Property
back to Seller, all in accordance with the terms and conditions set forth herein and below;

       NOW, THEREFORE, Seller and Purchaser hereby agree as follows:

                                         TERMS

1.     Sale of Property

        Seller agrees to sell and convey, and Purchaser agrees to purchase, the Property.
This sale shall include all of the Seller’s right, title, and interest in, to, and under all
fixtures attached or appurtenant to or used in connection with the Property.

2.     Purchase Price

       The Purchase Price for the Property shall be ________________ dollars ($__ ),
payable as follows:

        a.     _____________________ dollars (___$) as a deposit when Purchaser
signs this Agreement.

       b.     _____________________ dollars (___$) as an additional deposit within
____ (__) hours after Seller signs this Agreement.

      c.      With interest at the rate of _____ percent (__%) of the Purchase Price, and
payment of _____________________ dollars (___$) monthly for a term of leaseback, as
monthly lease payments.




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[This section may amended according the method of payment Seller and Purchaser
decide taking into account leaseback]

3.     Restrictions, Liens, Title Policy, and Insurance

       The Property is to be sold and conveyed subject to the following:

       a.    Zoning and building regulations, ordinances, and requirements adopted by
any government or municipal authority that relate to the Property;

        b.    Any state of facts as shown on an accurate survey of the Property provided
that same does not render title unmarketable;

       c.      Such state of facts as a personal inspection may disclose;

       d.      Public utility easements of record;

       e.      Recorded and enforceable building and use restrictions; and

       f.      ________________________ [Add additional restrictions, if any].

        g.       Apart from the foregoing, the Property is to be sold and conveyed free and
clear of all liens and encumbrances.

       Seller shall deliver to Purchaser at closing, at Seller’s expense, a title policy for
___________ dollars ($___) insuring the interest of Purchaser as fee owner of the
Property, subject, however, to the matters set forth herein above and the usual standard
exceptions of the title company issuing such policy.

4.     Outstanding Assessments; Taxes

       In view of the lease-back herein below mentioned:

        a.     Purchaser will accept title subject to, and will pay all assessments and
installments of assessments for, local improvements that are not payable as of date of
delivery of deed. Purchaser shall not be entitled to any reduction of the Purchase Price at
closing by reason of the existence of such assessments.

        b.     The existence of any violations or unpaid real estate taxes, utility charges,
or like charges on the date of closing of title shall not be deemed an objection to title.

       c.      No closing adjustments shall be made between Seller and Purchaser at
closing.




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5.     Warranties of Seller

        Seller warrants that Seller has not received notification from any lawful authority
regarding any assessments, pending public improvements, repairs, replacements, or
alterations to the Property that have not been satisfactorily made. These warranties shall
survive the delivery of the above-referenced deed.

        It is further understood that all of the statements, conditions, representations, and
agreements herein contained, in reference to the title to the Property, and other matters
and things made by Seller are true to the best of its knowledge.

6.     Default

       a.      Purchaser’s Default

               If Purchaser fails to comply with this Agreement, Purchaser will be in
default, and Seller may (i) enforce specific performance and/or seek such other relief as
may be provided by law or (ii) terminate this Agreement and receive the earnest money
as liquidated damages, thereby releasing both parties from this Agreement.

       b.      Seller’s Default

                If, due to factors beyond Seller’s control, Seller fails, within the time
allowed, to make any non-casualty repairs, Purchaser may (i) extend the time for
performance up to ___ (__) days and necessarily extend the closing date or (ii) terminate
this Agreement as the sole remedy and receive the earnest money. If Seller fails to
comply with this Agreement for any other reason, Seller will be in default and Purchaser
may (i) enforce specific performance and/or seek such other relief as may be provided by
law or (ii) terminate this Agreement and receive the earnest money, thereby releasing
both parties from this Agreement.

7.     Deed

        The sale deed shall be a grant deed subject only to current taxes for ___________
[Mention date] covenants, conditions, and restrictions of record, so as to convey to
Purchaser the fee simple of the Property, free and clear of all encumbrances, except as
herein provided.

8.     Closing

       The sale shall be closed at the Office of Title Company located in the County of
________, and the deed delivered within ___ (__) days from the date of execution of this
Agreement by all parties, except Seller shall have a reasonable length of time within
which to perfect title or cure defects in the title to the Property if needed. Seller agrees to
pay the cost of deed preparation and the title insurance policy; all other closing costs shall
be paid by Purchaser.



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9.     Conveyance

        Seller agrees to convey good, merchantable title to and a general warranty deed
for the Property, insuring that Property is free of all encumbrances, except as hereinabove
set forth and Seller and Purchaser agree that any encumbrances due and owing at closing
shall be paid in full at that time from the sale proceeds.

10.    Risk of Loss

        Risk of loss as to the Property shall be borne by Seller until such time as title is
transferred. If any improvements covered by this Agreement are damaged or destroyed
prior to transfer, Seller shall immediately notify Purchaser in writing of the damage or
destruction, the amount of insurance proceeds payable, if any, and whether Seller intends,
prior to closing, to restore the Property to the condition existing on the Effective Date of
this Agreement. If Seller restores the Property to its prior condition before scheduled
closing, Purchaser and Seller shall proceed with closing. If the Property is not to be
restored to its prior condition by Seller before closing, Purchaser may either (a) proceed
with the transaction and be entitled to all insurance money, if any, payable to Seller under
all policies insuring the improvements or (b) terminate this Agreement, and thereby
release all parties from further liability hereunder, in which case any deposit money paid
by Purchaser shall be returned to Purchaser. Purchaser shall give written notice of
Purchaser’s election to Seller within ___ (__) days after Purchaser has received written
notice of such damage or destruction and the amount of insurance proceeds payable, and
closing shall be extended accordingly, if required. Failure by Purchaser to so notify
Seller shall constitute an election to terminate this Agreement; such termination shall not
constitute a default by Seller.

11.    Condition of Property

        Unless both Parties otherwise agree in writing, Seller shall complete all agreed
repairs and treatments prior to the closing date. All required permits must be obtained,
and repairs and treatments must be performed by persons who are licensed or otherwise
authorized by law to provide such repairs and/or treatments. At Purchaser’s election, any
transferable warranties received by Seller with respect to the repairs and treatments will
be transferred to Purchaser at Purchaser’s expense. If Seller fails to complete any agreed-
upon repairs or treatments prior to the closing date, Purchaser may do so and shall receive
reimbursement from Seller for same at closing. The closing date may be extended up to
___ (__) days, if necessary, to complete repairs and/or treatments.

       Purchaser is advised that the presence of wetlands, toxic substances, including
asbestos and wastes or other environmental hazards, or the presence of a threatened or
endangered species or its habitat may affect Purchaser’s intended use of the Property. [If
Purchaser is concerned about these matters, an addendum required by the parties should
be used.]




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12.    Leaseback

       At closing, and immediately after Purchaser receives the deed to the Property
from Seller, Purchaser, as landlord, shall enter into a leaseback agreement for the
Property, with Seller as tenant, which leaseback shall be in the form and substance of the
agreement attached hereto as Exhibit “C.” The form of the attached leaseback shall be
completed at closing as follows: the date of the leaseback shall be the date of title closing
and the commencement date of the initial term of the leaseback shall be the date of title
closing.

13.      Notices

          Any notice to be given by any Party hereunder shall be sent by registered or
certified mail to the other Party at the addresses set forth on the signature page below, or
at such other address as may hereafter be designated in writing by such party.

14.      Entire Agreement

         This Agreement constitutes the entire agreement as between the Parties
regarding the subject matter addressed herein and may not be changed or modified except
by an agreement in writing signed by both Parties.

15.    Disclosures
       _____________________________________________________________
       _____________________________________________________________
       _____________________________________________________________

[Seller should note any disclosures about the Property that may be required under
federal and/or state law. Consult an attorney if uncertainty exists as to which disclosures
are required. Disclosures should be attached or annexed to this Agreement]

        IN WITNESS THEREOF, the Parties hereto have executed this Agreement as of
the Effective Date first above written.

Purchaser:
____________________________________________
[purchaser’s signature above/printed name below]
____________________________________________
[purchaser’s signature above/printed name below]

Seller:
____________________________________________
[seller’s signature above/printed name below]
____________________________________________
[seller’s signature above/printed name below]




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RECEIPT OF DEPOSIT:

       Received the initial deposit of _______________ dollars ($____) on account from
Purchaser.

Date:                                             Purchaser:
                                                  _______________________
                                                  [purchaser’s signature above/printed
                                                  name below]
                                                  _______________________
                                                  [purchaser’s signature above/printed
                                                  name below]

Date:                                             Seller:
                                                  _______________________
                                                  [seller’s signature above/printed
                                                  name below]
                                                  _______________________
                                                  [seller’s signature above/printed
                                                  name below]

Date:                                             AGENT:
                                                  _______________________
                                                  [agent’s signature above/printed
                                                  name below]
                                                  _______________________
                                                  [agent’s signature above/printed
                                                  name below]




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                               EXHIBIT “A”
                           Particulars of the Property




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                                 EXHIBIT “B”
                                    Disclosures
                                 (Use as Applicable)


Note about the following pages: The following lead disclosure must be included if the
Property was built prior to 1978.




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                LEAD-BASED PAINT DISCLOSURE (SALES)
______________________________________________________________________
Street Address                    City     State       Zip

WARNING! LEAD FROM PAINT, DUST, AND SOIL CAN BE DANGEROUS IF
NOT MANAGED PROPERLY!
______________________________________________________________________

      Disclosure of Information on Lead-Based Paint and/or Lead-Based Paint Hazards
                                 Lead Warning Statement

        Every Purchaser of any interest in any real property on which a structure was built
prior to 1978 is notified that such Property may present exposure to lead from lead-based
paint that may place young children at risk of developing lead poisoning. Lead poisoning
in young children may produce permanent neurological damage, including learning
disabilities, reduced intelligence quotient, behavioral problems, and impaired memory.
Lead poisoning also poses a particular risk to pregnant women. Seller of any interest in
the real property is required to provide Purchaser with any information on lead-based
paint hazards from risk assessments or inspections in Seller’s possession and notify
Purchaser of any known lead-based paint hazards. A risk assessment or inspection for
possible lead-based paint hazards is recommended prior to purchase.

Seller’s Disclosure

(a)    Presence of lead-based paint and/or lead-based paint hazards (check (i) or (ii)
below):

       (i)      ______ Known lead-based paint and/or lead-based paint hazards are
present in the housing (explain).
________________________________________________________________________
________________________________________________________________________

        (ii)   ______ Seller has no knowledge of lead-based paint and/or lead-based
paint hazards in the housing.

(b)      Records and reports available to Seller (check (i) or (ii) below):

        (i)     ______ Seller has provided Purchaser with all available records and
reports pertaining to lead-based paint and/or lead-based paint hazards in the housing (list
documents below).
________________________________________________________________________
________________________________________________________________________

        (ii)   _____ Seller has no reports or records pertaining to lead-based paint
and/or lead-based paint hazards in the housing.




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Purchaser’s Acknowledgment (initial)

(c)     ______ Purchaser has received copies of all information listed above.

(d)   ______ Purchaser has received the pamphlet Protect Your Family from Lead in
Your Home.

(e)     Purchaser has (check (i) or (ii) below):

       (i)     ______ Received a 10-day opportunity (or mutually agreed upon period)
to conduct a risk assessment or inspection for the presence of lead-based paint and/or
lead-based paint hazards; or

        (ii)   ______ Waived the opportunity to conduct a risk assessment or inspection
for the presence of lead-based paint and/or lead-based paint hazards.

Agent’s Acknowledgment (initial)

(f)    ______ Agent has informed Seller of Seller’s obligations under 42 U.S.C. §
4852(d) and is aware of his/her responsibility to ensure compliance.

Seller Initials: ____ ____ Purchaser Initials: ____ ____ Agent Initials: ____ ____

Certification of Accuracy

        The following Parties have reviewed the information above and certify, to the best
of their knowledge, that the information they have provided is true and accurate.
Penalties for failure to comply with Federal Lead-Based Paint Disclosure Laws include
treble (3 times) damages, attorney fees, costs, and a penalty up to $10,000 for each
violation.

Date:                                               Purchaser:
                                                    _______________________
                                                    [purchaser’s signature above/printed
                                                    name below]
                                                    _______________________
                                                    [purchaser’s signature above/printed
                                                    name below]

Date:                                               Seller:
                                                    _______________________
                                                    [seller’s signature above/printed
                                                    name below]
                                                    _______________________
                                                    [seller’s signature above/printed
                                                    name below]



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Date:                      AGENT:
                           _______________________
                           [agent’s signature above/printed
                           name below]
                           _______________________
                           [agent’s signature above/printed
                           name below]




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                            RADON GAS DISCLOSURE
        As required by law, Seller makes the following disclosure regarding Radon Gas.

       Radon is a naturally occurring radioactive gas that, when it has accumulated in a
building in sufficient quantities, may present health risks to persons who are exposed to it
over time. Levels of Radon that exceed federal and state guidelines have been found in
buildings in ____________. Additional information regarding radon and radon testing
may be obtained from the county health department.

        Any injuries, sickness, damages, or losses that Purchaser or any of its relatives,
employers, employees, friends, business invites, guests, or anyone suffers from Radon
Gas shall not be the responsibility of Seller. Purchaser shall hold Seller harmless for any
such sickness, damages, or losses that occur to any of the aforementioned persons.

Seller hereby certifies that:

        __________      Seller does not know of the presence of Radon (initial).

DATED:

_______________________________
Seller’s Name

________________________________
Seller’s Signature




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                            FLOOD ZONE HAZARD
       Seller may require Flood Hazard Insurance as a condition of the renting or leasing
the Property if Seller determines that the Property is in a flood hazard zone.

Seller initial one:

(a)    ___________ Seller knows if any or all of the Property is located in a designated
flood plain. If yes, explain:
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
________________

(b)    _____________Seller knows if any of all of the Property located are located in a
designated wetland. If yes, explain:
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
________________




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                               EXHIBIT “C”
                          LEASEBACK AGREEMENT
          This Leaseback Agreement (this “Leaseback Agreement”) is hereby made and
entered into on this ______ day of ______________, 20____ (the “Effective Date”) by
and between __________________ (“Lessor”) and ______________ (“Lessee”).

         Lessor and Lessee agree that Lessor shall purchase from Lessee the Property (as
described in Appendix “1” to this Leaseback Agreement) pursuant to the a certain
“Agreement to Sell Property” dated the ______ day of ______________, 20____ and that
Lessee shall leaseback the Property from Lessor for Lessee’s ______________ [Mention
Use], from the date of closing. Lessor and Lessee have thus agreed to the following.

1.       PROPERTY

        Lessee leases from the Lessor the Property described in Appendix “1” to this
Leaseback Agreement. This consists of ___________________ as described more fully
in Appendix “1.”

2.       LEASE PAYMENTS

          Payments on the lease shall be made monthly in arrears, the date of payment
being the _____ (__) day of each month for the prior month. The first date of payment
shall be _________, 20___ and the last date of payment shall be ______, 20__. The total
of the payments to be tendered on the payment dates thus shall be _______ dollars ($__).
If the scheduled due date for payment is not a banking day, then the due date shall be the
next following banking day. A “banking day” shall mean a day when banks are open in
the State/County of ____________ [Mention County or State as applicable].

         The agreed-upon monthly lease payment shall be ____________ dollars ($__),
which is _______ percent (__%) of the Purchase Price equated monthly.

         Should the lease payment or other payments covered by this Agreement not be
paid on the due date, the debt shall be subject to the highest penalty interest rates legally
permissible from the due date up until the date of payment. Lessee shall pay, during the
period of the lease, all fees/costs incurred by Lessor in the collection and receipt of
individual lease payments.

         All payments covered by his Leaseback Agreement shall be made at a place to
be decided by Lessor, who shall inform Lessee of same.

3.       INITIAL LEASE PERIOD

         The agreed-upon period of the lease begins on the ____ day of _________,
20__ and ends, without formal notice, on the ____ day of _________, 20__.



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4.     CONDITION OF PROPERTY

       Lessee is familiar with the condition of the Property and is satisfied with same in
every way.

OR

       [Upon commencement of the Leaseback Agreement, Lessees acknowledge receipt,
in good condition, of the Property and all its equipment excepting the list of defects
Lessor shall deliver to Lessees within ___ (__) days of occupancy. Lessee shall deliver in
writing and within ___ (__) days thereafter a list of any additional defects that Lessee
may discover or accept, as a true and accurate description of the condition of the
Property at the time of occupancy, Lessor’s list.]

5.       OPERATIONAL COSTS, ETC. (Applicable for Commercial or Office Use of
Property)

          Lessee shall, in addition to lease payments pursuant to Section 3 above, pay all
operational costs associated with the Property, including all property taxes, contributions
to joint maintenance work, costs due to improvements to the plot or the Property, and the
costs of a managing committee for the building if applicable. Should Lessor pay
operational costs payable by Lessee under the terms above, this amount shall become due
payable to Lessor at the next due date for lease payments. Lessee shall reimburse Lessor
for all taxes and duties that may be imposed upon or incurred in connection with this
Agreement, including those due to the Lessor’s ownership of the Property. The same
applies to expenses that Lessor may be required to incur as owner of the Property that are
not covered by ordinary property-owner’s insurance. This does not, however, apply to
taxes that may be levied on Lessor’s revenue from this Agreement or to property tax that
may be levied on Lessor’s assets.

6.     MAINTENANCE OF PROPERTY

        Lessor agrees that it shall, at its cost and expense, maintain the parking area, the
exterior walls, roofs, electric wiring, water, gas and sewage pipes, heating system, and
appliances in good and sanitary order, the building in which the Property is located, and
the Property, and every part of them, in good, first class condition, except that Lessee
shall make any repairs or replacements necessitated by damage caused by Lessee or its
employees, agents, invitees, or visitors. Provided, however, if Lessee fails to make any
such repairs or replacements promptly, Lessor may, at its sole option, make the repairs or
replacements after at least ____ (__) days prior written notice to Lessee, and Lessee shall
repay the cost of the repairs or replacements to Lessor on demand.

OR

        Lessor shall be responsible for keeping and maintaining, at its cost and expense,
the exterior walls, roofs, electric wiring, water, gas and sewage pipes, heating system,



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and appliances (excepting any for which Lessee is responsible) in good and sanitary
order, except where the damage and disrepair thereto has been caused by abuse or
negligence of Lessee, his family, or guests, but Lessor in no way assumes liability for
maintenance of public areas.

       Lessee is responsible for keeping clean, clear, and unobstructed his own entrance
and the steps and walkways, if any, leading to his private entrance from the parking lot
sidewalk. Lessor is not responsible for repairing broken glass, window panes, screens,
doors, or patio door glass broken or damaged under any circumstances.

       Lessee agrees to keep the Property clean at all times; trash and garbage is to be
removed ____ (__) a week; dirty dishes shall not be left out in order to prevent mice and
roach problems; carpets are to be vacuumed and cleaned regularly; floors are to be kept
cleaned and waxed. Light bulbs are the responsibility of Lessee to purchase and replace.

7.     USE OF PROPERTY (For Residential Use of Property)

       The Property shall be occupied only by Lessee as a private dwelling and for no
other purposes, and no person other than those signing this Agreement, whether or not
such person is a member of the family of Lessee, shall occupy the Property.

        Lessee agrees and warrants that no use shall be made or permitted to be made of
the Property, or any part thereof, and no acts done therein that may unreasonably disturb
the quiet enjoyment of any other lessee in the building of which the leased Property is/are
a part.

        In the event that Lessee’s conduct or that of its family or invitees is unreasonably
injurious or damaging to Lessor and/or to the rights, privileges, or welfare of the other
occupants of the building, Lessor may terminate this lease at any time upon ____ (__)
day’s written notice.

       (Applicable for Commercial or Office Use of Property)
       Lessee shall use the Property as [specify use], and shall not use or permit the
Property to be used for any other purpose. Lessee agrees that no use consuming
abnormally high utility or other service costs, such as computers, shall be permitted in
the Property.

8.     ADDITIONS AND CONSTRUCTION (Applicable for Commercial or Office
Use of Property)

        Lessee has Lessor’s full permission to carry out those improvements and
additions to the Property that are necessary in order to make it suitable for
_____________ [Mention special purpose] that the Lessee carries out, and is known to
the Lessor. Those changes or improvements made by Lessee to the Property itself shall
automatically and without special reimbursement become the property of Lessor. Lessee
shall seek Lessor’s consent for all changes that may be regarded as unusual for the



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activity of the Lessee. Should such changes or additions be made without Lessor’s
consent, Lessor may require that the Property be restored to its original condition,
without cost to Lessor. [Mention if additional permission from municipal authorities is
needed along with Lessor’s permission]

OR

        Except as provided by law, Lessee shall make no alterations to the buildings or
improvements on the Property or construct any building or make any other improvements
on the Property without the prior written consent of Lessor. Further, Lessee agrees not
to repair the Property or dwelling or anything belonging to Lessor without first obtaining
Lessor’s written consent unless such repairs cost less than _____________ dollars
($___), and Lessee agrees to pay for them. Lessee shall hold Lessor harmless for any
mechanics liens or proceedings caused by the actions of Lessee. When approved by
Lessor, Lessee’s plans for alterations and decorations shall bear a determination
regarding ownership. If Lessee is able to convince Lessor that Lessee can remove the
alterations or decorations and restore that part of the Property to its original condition,
then Lessor may grant Lessee the right to remove them. Otherwise, any alterations or
decorations made by Lessee become property of Lessor when Lessee vacates.

9.          OWNERSHIP, TRANSFER OF RIGHTS, ETC.

            Lessor has, during the Term of the lease, a direct right of ownership in the
Property.

          Lessor may transfer rights and obligations under the terms of this lease,
provided that such transfer does not in any way affect the rights of Lessee. Lessee may
not transfer the right to use of the Property without the written consent of Lessor. Lessor
shall grant Lessee the right to sublet the Property, if it is certain that such subletting will
in no way affect the interests of Lessor.

          Direct ownership of the Property and other ownership rights shall be transferred
at the end of the lease period to Lessee, or to a party nominated by Lessee, provided that
Lessee has in every way fulfilled the obligations of Lessee under the terms of this
Leaseback Agreement.

10.    FIXTURES AND PERSONAL PROPERTY (Applicable for Commercial or
Office Use of Property)

         Any trade fixtures, equipment, or personal property permanently installed in or on
the Property by or at the expense of Lessee shall be and remain the property of Lessee,
including Lessee’s lighted sign, and Lessor agrees that Lessee shall have the right to
remove any and all of such property prior to the expiration or termination of this
Leaseback Agreement, so long as no default exists under this lease. Lessee agrees that it
will, at its expense, repair any damage to the Property incurred as a result of removal of




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any of its trade fixtures, equipment, or other permanently-affixed personal property as
described above.

11.    UTILITIES (Applicable for Commercial or Office Use of Property)

       Lessor agrees to provide, at its expense, to Lessee and for the Property, utilities
such as adequate heat, electricity, water, air conditioning, replacement light tubes, trash
removal service, and sewage disposal service, in such quantities and at such times as is
necessary to Lessee’s comfort and reasonable use of the Property, from 8 a.m. to 6 p.m.,
Monday through Saturday. These services will not be provided on Sundays, New Year’s
Day, July 4th, Labor Day, Thanksgiving, Christmas, or any other nationally-recognized
holidays. [Mention if usage is regulated by a time limit]

OR (Applicable for Residential Use of Property)

       Lessor shall provide means of access to the utilities and services for which Lessee
accepts payment responsibility other than those services that Lessor has agreed to pay,
such as sewer and garbage.

       Lessee agrees to pay in advance utility charges that will be billed to Lessor for
Lessee as set forth in Appendix “2” attached to this Leaseback Agreement. Lessor will
maintain a billed utility account for each leased property with actual billings being
equally divided among each person who signs as a Lessee. Lessee will receive a billing
statement in any month that a negative account balance exists and payment of such
negative balance shall be due with the next installment payment.

        Any positive utility account balance indicating overpayment of actual utility use
will be refunded at the end of the term of this Agreement. Lessor estimates, based on
prior history, that the total utility charges Lessor will bill to Lessee during the term of
this Leaseback Agreement will be________________ dollars ($__).

12.    JANITORIAL SERVICE (Applicable for Commercial or Office Use of
Property)

       Lessor agrees to provide for the Property, at Lessor’s expense, janitorial services
such as ________________________________________________________________
[cleaning of toilets, washrooms, windows, carpet, garbage collection, etc.]

13.    DESTRUCTION OF PROPERTY

        If at any time during the term of this Leaseback Agreement, the Property or any
part of thereof is damaged or destroyed by fire in a way that does not render the Property
unfit for the conduct of Lessee’s business or that does not injure Lessee’s business,
Lessor shall promptly and through the exercise of reasonable diligence repair the damage
and restore the Property, at Lessor’s expense, to the condition in which the Property




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existed immediately prior to the damage or destruction. In such case there shall be no
abatement of Rent.

14.    EMINENT DOMAIN

         As used in this section, the word “condemned” shall include: (a) receipt of written
notice of the intent to condemn from an entity having the power of eminent domain, (b)
the filing of any action or proceeding for condemnation by any such entity, and/or (c) the
conveyance of any interest in the Property by Lessor or Lessee to a public or quasi-public
authority having the power of eminent domain with respect to the Property as a result of
the authority’s express written intent to condemn.

15.      INFORMATION (Applicable for Commercial or Office Use of Property)

         Lessee must submit to Lessor, no later than _____ (__) months after the end of
the accounting year, a copy of Lessee’s annual accounts.

16.      DEFAULT BY LESSEE; REMEDIES

          Lessor may terminate this Agreement if Lessee defaults materially on its
obligations under this Leaseback Agreement.

         Examples of material default are:

           a.        Lessee neglects the maintenance of or repairs to the Property, so that it
is at risk of deterioration, or does not comply with Lessor’s instructions to cure matters
within _____ (__) weeks from receipt of notice of same;

         b.       Lessee sublets rights under the lease or sublets the Property without
the consent of Lessor, and does not comply with Lessor’s instructions to cure matters
within _____ (__) weeks of receipt of notice of same;

          c.      Lessee, at any time, is in default with respect to a lease payment for a
period of _____ (__) days after receiving written notice from Lessor of same;

          d.        If a petition in bankruptcy or other insolvency proceeding is filed by
or against Lessee, without dismissal within _____ (__) days of filing; if Lessee makes
any general assignment for the benefit of creditors or composition; if a petition or other
proceeding is instituted by or against Lessee for the appointment of a trustee, receiver, or
liquidator of Lessee or of any of Lessee’s property pursuant to laws for the benefit of
creditors; or if a proceeding is instituted by any governmental authority for the
dissolution or liquidation of Lessee; and/or

         e.       Lessee’s financial position deteriorates so seriously after the signing
of the Leaseback Agreement that it must be regarded as highly likely that Lessee cannot




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fulfill obligations to Lessor, and Lessee does not comply with Lessor’s instruction to
rectify the financial position within _____ (__) weeks of receipt of same.

          Should Lessor terminate the Leaseback Agreement due to default by Lessee as
mentioned above, Lessee shall, within _____ (__) weeks of receipt of written notice of
termination, pay to Lessor all due but unpaid lease and other payments covered by this
_____ (__) Agreement that remain unpaid on the day of termination, and all lease
payments not yet due, calculated to current value on the basis of the Leaseback
Agreement’s interest rate. Lessee’s debt shall be subject to the highest legal-permissible
penalty interest rates from the above-mentioned due date until date of payment. In
addition, Lessee shall pay Lessor, based upon invoices submitted by Lessor, all Lessor’s
costs incurred due to the default and termination, including legal costs and attorney fees.

           When the settlement has been completed as stated above, Lessee shall be free of
all debt to Lessor, and title to the Property shall be transferred to Lessee.

         If settlement to Lessor is not carried out within the time frame set forth above,
Lessor shall have the right, as soon as possible, to attempt to sell the Property on the free
market. In such an attempt to sell, Lessor shall take into account the interests of Lessee.

         If the Property is sold, the sale price, less sales costs, shall be deducted from
Lessee’s debt as stated above, if and when Lessor receives the sale price in cash.
Payment by check, bank draft, or bond shall not be regarded as payment in cash. An
attempt at sale does not affect Lessee’s obligation to pay.

17.      LESSEE’S RIGHT TO PAY OFF REMAINDER OF LEASE

         Lessee has the right to terminate this Leaseback Agreement and reacquire the
Property and all rights specified in the “Agreement to Sell Property” at any time during
the period of the lease, by paying off all due lease payments and those not yet due,
together with interest accruing, calculated to present value on the basis of the interest rate
of the Agreement to Sell Property, on the day of settlement. In the case of such a
settlement, all ownership rights in the Property shall be transferred to Lessee.

18.      RETURN OF THE PROPERTY

          Should the period of the lease expire without transfer of rights pursuant to
section 9, Lessee shall return the Property to Lessor in the same condition as when it was
received, except normal wear and tear and damage by fire or from any other cause not
attributable to the willful or negligent act of Lessee [or its employees, agents, invitees, or
visitors]. Should a dispute arise between Lessor and Lessee on the amount of
compensation for damage to the leased Property, it shall be decided by the decision of
one court-appointed assessor, whose decision shall be final and who shall determine the
amount of compensation due using laws applicable to courts of arbitration.




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19.      NOTICE

          All notices to Lessee may be given at the Property address stated on the front of
this Leaseback Agreement, unless Lessee has provably informed Lessor of a new address.

20.      APPENDICES

         The Appendices especially mentioned in this Leaseback Agreement and/or
attached as appendices to the Leaseback Agreement, are a part of the Leaseback
Agreement.

21.      JURISDICTION

        This Leaseback Agreement shall be governed by the laws of the State of
____________, without regard to conflicts of law principles.

       This Leaseback Agreement is hereby executed as of the date first above written in
multiple counterparts, each of which shall constitute an original.

________________________
LESSEE


________________________
LESSOR




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                           NOTARY STATEMENT

State of __________
County of ____________

      This instrument was acknowledged before me on ____________________ by
______________________________________________________________.

____________________________
Notary Public, State of __________
______________________________________
Notary’s typed or printed name
My commission expires:__________________
[or Notary’s Stamp]


State of __________
County of ____________

      This instrument was acknowledged before me on ____________________ by
______________________________________________________________.

Notary Public, State of __________
______________________________________
Notary's typed or printed name
My commission expires:__________________
[or Notary’s Stamp]




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                             APPENDIX “1”
                           Particulars of Property




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                            APPENDIX “2”
                           Utilities and Charges




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DOCUMENT INFO
Description: A Sale and Leaseback Agreement is an instrument governing a transaction wherein the owner of a property sells that property and then leases it back from the buyer. The purpose of the leaseback is to free up the original owner's capital while allowing the owner to retain possession and use of the property. The type of property involved can be anything from residential or commercial real estate to equipment or vehicles. This Agreement can be used by individuals or small businesses that want to receive immediate capital for certain property while still retaining possession.
This document is also part of a package Buying and Selling Real Estate 22 Documents Included