THIS PURCHASE AND SALE AGREEMENT

AND ESCROW INSTRUCTIONS (this

Agreement), dated as of the ____ of October,

2011, is made and entered into by and between

_____________________ (Sellers), and __________________ (Buyer). Sellers and Buyer

are sometimes referred to herein individually as P

arty or collectively as Parties. The Parties

agree and understand that Buyer has the right to

take title under any name or entity, or additional

names or entities or to assign this Agreement at

Buyer’s sole and absolute discretion. The date

that Escrow Holder signs a fully executed copy

of the Consent of Escrow attached to this

Agreement is referred to as the

Agreement Date

.

For and in consideration of the mutual c

ovenants and agreements contained in this

Agreement, and other good and valuable consider

ation, the receipt and adequacy of which are

hereby acknowledged, Buyer and Sellers hereby agree as follows:

1. PURCHASE AND SALE.

1.1 Purchase and Sale of the Property. Sellers hereby agree to sell and convey

to Buyer, and Buyer hereby agrees to purchase fr

om Sellers, subject to the terms and conditions

set forth herein, all of Sellers’ right, title and inte

rest in and to the following (the items referred

to in Sections 1.1.1, 1.1.2 and 1.1.3 below, are collectively referred to as the

Property

):

1.1.1 that certain real property c

onsisting of approximately ________ +/-

square feet in the City of Visalia, County of Tu

lare, State of California, further described as

APNs __________________ located east of __________________________, and being more

particularly described on Exhibit A attached hereto

and incorporated herein by this reference (the

Land

);and

1.1.2 _________________________(collectively, the

Appurtenances

).

1.2 Purchase Price. The purchase

price payable by Buyer for the Property

(the

Purchase Price

) is __________________________ ($575,000.00). The Purchase Price

(including the components thereof) shall be payable as follows:

1.2.1 Initial Deposit.

1.2.2 Purchase Price Balance.

2. ESCROW AND CLOSING.

2

11/18/2012

2.1 ing of Escrow.

2.2 Escrow Fees and Other Charges.

2.3 Closing Date

2.4 Closing Documents. The Parties sh

all deposit the following with Escrow

Holder prior to the Close of Escrow:

2.5.1 Buyer’s Deliveries.

2.5.2 Sellers’ Deliveries.

2.6 Closing.

2.6.1 Actions by Escrow Holder.

2.6.2 Prorations.

2.7 Failure to Close; Termination.

2.7.1 Buyer’s Default

2.7.2 Sellers’ Default.

3. ACTIONS PENDING CLOSING.

3.1 Title Review.

3.2 Title Policy.

3.3 Investigation of the Property and Feasibility Period.

3.4 Access and Processing.

3.5 Closing Conditions.

4. REPRESENTATIONS, WARRANTIES AND COVENANTS.

4.1 Sellers’ Representations, Warranties and Covenants.

4.2 Buyer’s Representations and Warranties.

5. CONDEMNATION.

As we discussed in class, a contract

is a legally binding and enforceable

promise or set of promises between 2 or

more competent parties. Contracts

are entered every day in business and

are of significant import to most

businesses

As a legally binding instrument, the contract and its terms should be

carefully evaluated and properly doc

umented by the parties. Prior to

negotiating and formalizing a contract,

most prudent business managers and

owners identify key risks and benefits

and seek to negotiate and address

material terms in their agreements.

With this assignment, you are intere

sted in purchasing a juice shop in

northeast Fresno. You have found the

perfect existing business and are

preparing to meet and negotiate a cont

ract with the owner. The business is

currently owned by a small

corporation. For tax reasons, you believe that it

is best to buy the assets of the busine

ss rather than the corporation (stock).

You have scheduled a meeting w

ith the owner of the business.

Before meeting with the owner, you

will be meeting with your business

attorney and intend to prepare a memorandum offering input and

instructions on important terms and

deal points for the transaction.

In your BA 18 class, you learned the basi

cs of contracts and have reviewed a

sample contract in a different setting

(see Course Document €“ Sample Real

Estate Purchase and Sale Agreement).

The Sample Contract includes an

outline with a listing of some of the h

eadings for substantive terms important

in a real estate transaction.

At the end of the Agreement, you have

also had an opportunity to review

some sample General Provisions.

As you understand, these general

provisions are examples of certain sta

ndard protective provisions included in

many contracts, i.e. jurisdiction, ve

nue and attorneys fee clauses.

Utilizing this sample agreement a

nd your business acumen, you will be

preparing a memorandum outlining key/

material terms for this asset

purchase agreement (i.e. price) and offe

ring some input as to why each of

these terms is critical and a material pa

rt of the negotiations and contract.

Please also review and identify some

of the General Term

s that you believe

that your attorney should incorporate in

to the Agreement. Again, explain

why each of these terms is importan

t to you in this transaction.

As we discussed with negotiations,

preparation and analysis is very

important.

Your memorandum should be 3 pages or

less. You will be evaluated on the

content and quality of your writing.

Please be creative and use your critical

thinking skills to identify issues and key el

ements in this transaction.

2) Identify the Purchasing power parity (PPP) in the above generalized monetary model given above and briefly tell us what it means.

3)The graph below illustrates the Euro Zone home money market and the foreign exchange market (Forex) along with Euro interest rate, r‚¬, money supply, money demand, real balances (MEU/PEU), Expected Euro returns in the Forex market, the foreign return curve, and the Euro/Yen exchange rate, E‚¬/¥.

a) If money demand in the home (Euro Zone) market increases, what happens to

Euro interest rate; b) expected Euro returns from the Forex; and c) exchange rate, E‚¬/¥?   Explain, or mark the graph and explain.

b) Is the graph above portraying the ASSET APPROACH to exchange rate changes or is the general monetary model approach to exchange rate movement? Briefly explain.

4) Let’s look at the general monetary model of exchange rates for Swiss Franc (SFr) relative to Australian dollar (A$) again.

ESFr/A$ = PSFr/PA$ = [{MSFr/LSFr(rSFr)YSFr} / {MA$/LA$(rA$)YA$}]

For, ESFr/A$ = exchange rate; PSFr/PA$ = relative prices, MSFr = money supply;

LSFr (rSFr)YSFr = real money demand with LSFr(rSFr) = liquidity as a function of interest rate, rSFr, and YSFr = real income.  Similarly MA$ = money supply, with LA$(rA$)YA$ = real money demand and with LA$(rA$) being liquidity as a function of interest rate and YA$ = real income.

But this time suppose that the Australian money supply, MA$, increases and the Australian real money demand, LA$(rA$)YA$}, decreases very slightly because the money supply change influences a slight increase in interest rate, rA$, as we would expect to happen.   What is the effect on the price ratio, PSFr/PA$,  and the exchange rate,  ESFr/A$  with these two changes?  Explain.

5) The graph below is similar to the graph found above in Problem 3.  The graph  illustrates the Euro Zone home money market and the foreign exchange market (Forex) along with Euro interest rate, r‚¬, money supply, money demand, real balances (MEU/PEU), Expected Euro returns in the Forex market, the foreign return curve, and the Euro/Yen exchange rate, E‚¬/¥.

But this time there is an increase in the Foreign money supply.   What happens in this case to a) Euro interest rate; b) expected Euro returns from the Forex; and c) exchange rate, E‚¬/¥?   Explain, or mark the graph and explain.

{ It may be good to know that Foreign return curve is:  r‚¬  = r¥ + ((E’‚¬¥ €“ E‚¬¥ ) / E‚¬¥  = r¥ + (F‚¬¥  €“ S‚¬¥ ) / S‚¬¥) is telling us that the return in euro = the return in yen + the Forward euro to yen rate minus the spot euro to yen rate and divided by the spot euro to yen rate €” hence the treatment of returns as indicating the return on assets  €” the concept of money is an asset.  So we characterize the  asset treatment of exchange rates.  The home interest rate value is related to the foreign interest rate  + the Forward rate of exchange minus the Spot rate of exchange and all divided by the Spot rate of exchange}