California Purchase and Sale Agreement for Business Property

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California Purchase and Sale Agreement for Business Property Powered By Docstoc
THIS AGREEMENT made effective as of the _____ day of ______________, _______.


                                              [NAME OF SELLER]
                                                (the “Seller”)

                                                    - and -

                                           [NAME OF PURCHASER]
                                              (the “Purchaser”)

     Purchaser may assign its rights under this Agreement to an entity in which Purchaser has an equity
           interest subject to appropriate personal guarantees from the principals of such entity.


A.         Seller is the owner of that certain real property located at _________________ [street address],
           _____ [city], State of California, commonly known as _______________ [name of building],
           including all offsite improvements including, but not limited to, sewer, gutter, sidewalks,
           streetlights and other improvements, and the chattels and other assets more particularly
           described in Exhibit “A” attached hereto (collectively the “Property”).

B.         Seller desires to sell the Property to Purchaser, and Purchaser desires to acquire the Property on
           the terms and conditions set out in this Agreement,

C.         [delete this paragraph if not applicable:] Seller has notified Purchaser that the purchase and sale
           described herein is subject to a right of first refusal, the expiration of which is a condition
           precedent to both Purchaser’s and Seller’s duties herein. In the event that the right of first refusal
           is exercised, this Agreement shall be terminated without liability to either party, and Purchaser
           and Seller shall each be responsible for their own costs. Upon the expiration of the right of first
           refusal, or upon the waiver of that right by the Holder, the condition precedent shall be satisfied
           and this Agreement shall become binding and enforceable on both parties as to the terms and
           conditions set forth herein.

NOW, THEREFORE, in reliance upon the mutual covenants and agreements of Purchaser and Seller,
Purchaser agrees to buy from Seller the Property upon the terms, conditions and agreements hereinafter
set forth:

1.         Purchase Price

The purchase price (“Purchase Price”) for the Property shall be the sum of __________________
DOLLARS ($________), plus the inventory of Seller’s business (the “Business”), at Seller’s cost as
hereinafter determined at close of escrow.

2.         Terms of Payment

The Purchase Price shall be paid by Purchaser to Seller as follows:

(a)     An initial deposit of cash in an amount equal to __________________ DOLLARS ($_______) was
        deposited by Purchaser into an escrow to be established for purposes of consummating this
        transaction (the “Deposit”). Purchaser’s execution of this Agreement evidences Purchaser’s
        written approval of the contingencies specified in Section 6 below;

(b)     Cash (in addition to the initial deposits) in an amount equal to __________________ DOLLARS
        ($_______) shall be paid by Purchaser to Seller upon the close of escrow;

(c)     An additional sum of cash in an amount equal to:

        (i)     The inventory value determined at cost as hereinafter provided, shall be paid by
                Purchaser to Seller at the close of escrow.

        (ii)    Increased or decreased by the amount by which the total balance due on the Note
                assumed under sub-clause (d) below exceeds or is less than __________________
                DOLLARS ($________);

(d)     Purchaser shall assume the existing ________________ loan secured by the real property and
        business in the approximate amount of __________________ DOLLARS ($_______). The actual
        Note balance to be assumed shall be provided by Seller. Any penalty or charge related to the
        Note assumption shall be paid by Purchaser at Purchaser’s sole cost and expense.

3.      Condition of Equipment

Seller represents and warrants to Purchaser that all equipment being transferred to Purchaser hereunder
shall be fully operational and in good working condition at close of escrow as hereinafter defined,
provided, however, that Seller’s representation or warranty shall expire ____ days following the close of

4.      Deposits

Purchaser has paid into escrow a cash deposit in the amount of __________________ DOLLARS
($_______), receipt of which is acknowledged by Seller. The deposit is non-refundable and shall be
applied solely to the Purchase Price. Purchaser acknowledges and agrees that the deposit shall be
distributed to Seller free and discharged from escrow at any time at Seller’s sole discretion. In the event
that Purchaser fails to complete the transaction hereunder upon expiration of the Feasibility Period, the
deposit shall be retained by Seller as liquidated damages, in addition to any other legal remedies
available to Seller at law or equity.

5.      Title Insurance and Escrow Fees

Seller shall provide Purchaser, at Seller’s cost, with a standard CLTA policy of title insurance insuring
Purchaser with respect to title of the real property forming part of the Property being transferred
hereunder. Purchaser and Seller shall pay equally all fees incurred or in connection with the close of
escrow including, but not limited to, all escrow fees and charges and recording fees. Any additional costs
associated with an ALTA survey premium requested by Purchaser will be made at Purchaser’s expense.

6.      Conditions of Escrow and Feasibility

Close of escrow is expressly conditioned upon the following terms:

(a)     Title. The Preliminary Title Report and legible copies of all exceptions reflected therein shall be
        delivered to Purchaser within five (5) days of the execution of the Purchase and Sale Agreement

        by Purchaser and Seller. Purchaser shall either approve or disapprove any such exceptions in
        writing within thirty (30) days of receipt of that Title Report.

(b)     Feasibility Period. Purchaser acknowledges that Purchaser has already had the benefit of a forty-
        five (45) day feasibility period during which Purchaser completed its due diligence investigation
        and approved in Purchaser’s sole and absolute discretion such matters as Purchaser may deem
        relevant to Purchaser’s decision to purchase the assets (the “feasibility period”). Copies of any
        and all studies conducted by Purchaser during the feasibility period shall be provided to Seller
        upon Seller’s written request. Purchaser acknowledges that Purchaser’s decision to complete this
        purchase is not made in reliance upon any representations or warranties of Seller other than
        those representations and warranties expressly set forth in Section 7 of this Agreement. Purchaser
        is not relying upon any advice, representations or warranties of any other party. Purchaser’s
        decision to complete this purchase is a result of Purchaser’s independent business decision.

(c)     Approvals. On or before the close of escrow, all approvals necessary or appropriate for the
        purchase and transfer of the Assets will have been obtained by Purchaser.

(d)     Financial Information. Within _______ days of the Effective Date, Purchaser shall provide personal
        Financial Statements and true and correct copies of Purchaser’s federal income tax returns for the
        past ___ years. Seller shall have ___ days following receipt to review and approve such financial
        records. In the event the Seller does not approve such financial records, Seller may elect to
        terminate this sale at no cost or expense to Seller, provided, however, that Seller shall return the
        Deposit referred to in Section 4 hereof.

7.      Representations and Warranties of Seller

Seller hereby represents and warrants to Purchaser the following:

(a)     Financial Statements. Exhibit “B” to this Agreement sets forth the compiled balance sheet and
        statement of income and expenses of Seller’s business (collectively, “Seller’s financial
        statements”) for the year ending __________ [insert date], which to the best of Seller’s knowledge
        accurately reflect the financial condition of Seller and the results of operations for the year then
        ended. All financial information for 20__ up to date of closing will be made available.

(b)     Absence of Material Changes. To the best of Seller’s knowledge and belief, since __________ [insert
        date], there has not been any material and adverse change in the financial condition, liabilities,
        assets, business, or prospects of Seller which have not been reported to Purchaser or any event or
        conditions of any character that has or might reasonably have a material and adverse effect on
        the financial condition, business, assets, liabilities, or prospects of Seller.

(c)     Absence of Undisclosed Liabilities. To the best of Seller’s knowledge and belief, there is no debt,
        liability, or obligation of any nature, whether accrued, absolute, contingent, or otherwise, and
        whether due or to become due, that is not reflected or reserved against in Seller’s balance sheet,
        except for (i) those that may have been incurred after the date of Seller’s financial statements and
        (ii) those that are not required by generally accepted accounting principles to be included in a
        balance sheet. All debts, liabilities, and obligations incurred after that date were incurred in the
        ordinary course of business and are usual and normal in amount both individually and in the

(d)     Tax Returns and Audits. Seller has, within the times and in the manner prescribed by law, filed all
        federal and local tax returns required by law, and has paid all taxes, assessments, and penalties
        due and payable. Seller has no actual knowledge of any present material disputes as to taxes in
        any material amount payable by Seller.

(e)   Hazardous Substances. Seller has no actual knowledge of the presence of toxic or hazardous
      substances on, in or under the subject property that exceed action levels as defined by California
      State and/or Federal laws. A Phase II environmental study may be conducted on site and such
      cost shall be paid by Purchaser. In the event that toxic levels are found to exceed allowable
      California State and/or Federal levels, Purchaser has the option to either terminate, in its entirety,
      this Purchase and Sale Agreement, or Purchaser may request Seller to remediate and clean up
      any and all contamination on site such that the subject Property does not exceed action levels as
      defined by California State or Federal laws. In the event that Purchaser requests Seller to clean up
      the contaminated property, Seller, at Seller’s sole discretion, may either clean up and remediate
      the property or terminate this Agreement. If Seller elects to terminate this Agreement, Purchaser
      shall be reimbursed by Seller for the cost of the Phase II environmental study. Seller shall have no
      further liability to Purchaser in the event of such termination. In the event remediation and clean-
      up is required, escrow shall be extended to accommodate such remediation and clean-up.

(f)   Inventory. The inventory items shown on Seller’s financial statements consist of items that are
      usable and saleable in the ordinary course of business by Seller. Except for sales made in the
      ordinary course of business since the date of Seller’s financial statements, all inventory is the
      property of Seller. Except for __________________ [list any loans attaching to inventory] and related
      security instruments which will remain in place, no inventory items are subject to security
      interest. The value of the inventory shall be determined on a first-in, first-out basis consistent
      with prior years by independent count prior to closing.

(g)   Tangible Personal Property. The books and records of Seller contain a complete and accurate
      description, and specify the location, of all trucks, automobiles, machinery, equipment, furniture,
      supplies, tools, and all other tangible personal property owned by, in the possession of, or used
      by Seller in connection with the business. Other than security interests granted in security
      agreements on _________________ [describe property covered by security agreements], no personal
      property listed on Exhibit “A” is held under any lease, security agreement, conditional sales
      contract, or other security arrangement. The tangible personal property reflected in those books
      and records constitutes all such tangible personal property necessary for the conduct by Seller of
      its business described herein.

(h)   Title to Assets. Seller has good and marketable title to all its assets and interests in assets, whether
      real, personal, tangible, or intangible, which constitute all the assets and interests in assets that
      are used in the business of Seller. Seller is not in default or in arrears in any material respect
      under any lease. All tangible personal property of Seller is in good operating condition and
      repair, ordinary wear and tear expected. Seller is in possession of all premises leased to it from

(i)   Litigation. To the best of Seller’s knowledge and belief, there is no threatened or pending
      litigation, any suit, action, arbitration, or legal, administrative, or other proceedings, or
      governmental investigation against or affecting Seller, or any of its business, assets, or financial

(j)   Compliance With Laws. Seller has received no notic
Description: Sell a business premises (including land) in California with this template Purchase and Sale Agreement for Business Property. - The sale includes the real estate property, the building, improvements, chattels, equipment, vehicles, inventory and other assets of the business. - The purchaser agrees to assume an existing business loan secured by the real property. The balance of the loan will be set off against the purchase price. - The seller will provide a standard CLTA title insurance policy. - The purchaser may assign its rights under the agreement to a corporate entity in which the purchaser holds an equity interest. This California Purchase and Sale Agreement for Business Property template is provided in MS Word format, and is fully editable to fit your specific needs.
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