CITY OF SOUTH LAKE TAHOE Purchase and Sale Agreement

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1 CITY OF SOUTH LAKE TAHOE Purchase and Sale Agreement This Purchase and Sale Agreement (this "Agreement") is made and entered into as of the date of the last signature below ("Effective Date") by and between the City of South Lake Tahoe, a municipal corporation ("City") and TMPM, LLC, a California limited liability company ("TMPM"), and Pradip T. Patel and Neha P. Patel ("Patel") (collectively, "Seller"). RECITALS A. TMPM is the owner of that certain real property located at 3600 Lake Tahoe Boulevard, and 3588, 3592 and 3596 Lloyd Avenue, South Lake Tahoe, California (Assessors Parcel Numbers , , -19, and -20) and Patel is the owner of that certain real property located at 3600 Lloyd Avenue, South Lake Tahoe, California (Assessors Parcel Number ) (collectively, the "Real Property"), along with al buildings, structures and improvements (the "Improvements") situated on the Real Property, and all development entitlements (the "Entitlements"), including but not limited to tourist accommodation units, sewer units, residential units of use, commercial floor area, land coverage and any other transferable commodities or development rights recognized by the Tahoe Regional Planning Agency or any other regulatory agency as attached or appurtenant to the Real Property (collectively, the Real Property, Improvements, and Entitlements are referred to herein as the "Property"); B. The City made a written offer (the "Government Code Offer") to purchase the Property from Seller pursuant to California Government Code section at the below Purchase Price and on the terms and conditions set forth in this Agreement, and Seller has accepted the Government Code Offer. NOW THEREFORE, for good and valuable consideration the receipt and adequacy of which are acknowledged, the parties hereto agree as follows: AGREEMENT 1. Purchase and Sale. Subject to all of the terms, covenants and conditions of this Agreement, Seller agrees to sell to the City, and the City agrees to purchase all right, title, and interest of Seller in and to the Property. CENTRAL RECORDS FILE No.: / ~f;t ~-Jtf-l7

2 2. Purchase Price. The total purchase price for the Property shall be of Five Million Nine Hundred Thirty-Five Thousand Dollars and zero cents ($5,935,000.00) ("Purchase Price") payable in cash or equally available funds as follows:.l9l Within three (3) business days after the Effective Date of this Agreement, the City shall deposit Fifty Thousand Dollars ($50,000) ("Deposit") in immediately available funds with Title Company (defined below), which Deposit is nonrefundable, but shall be credited to the Purchase Price..{Q1 The balance of the Purchase Price in the amount of Five Million Eight Hundred Eighty-Five Thousand Dollars and zero cents ($5,885,000.00) shall be payable in immediately available funds on the Closing Date. 3. Escrow. The Property shall be transferred to the City through a standard escrow with Deb Landerkin at Placer Title Company in South Lake Tahoe, California ("Title Company") upon deposit of the full amount of the agreed upon Purchase Price. 4. Closing. (a) Closing Date. Closing shall occur on or before May 31, 2017 ("Closing Date"), unless the parties hereto otherwise agree in writing. (bl Tenancies. Seller shall deliver the Real Property to the City free and clear of commercial and residential tenancies on the Closing Date. The City acknowledges that there are employees of TMPM who reside at the Real Property, and the City agrees that such employees shall have up to forty-five (45) days following the Closing Date to vacate the Real Property. Seller shall use its best efforts to terminate all tenancies on the Real Property and remove all tenants from the Real Property in accordance with the terms of this Section 4(b) at Sellers sole cost and expense. In connection therewith, Seller shall use its best efforts to resolve, be responsible for, pay for and diligently prosecute and/or defend any legal proceeding arising from the termination of such tenancies. (c) Allocation of costs. The City shall pay all costs of escrow and title (including title insurance, recording fees, transfer taxes and other customary and required expenses). (d) Prorations. (i) Current real property taxes (including, without limitation, all special district levies and assessments), all personal property 2

3 taxes, any intangible or use taxes, and other customarily prorated items shall be prorated between Seller and the City as of the Closing Date. All bonds and assessments that are part of or paid with the Property tax bill will be assumed by the City, including any future obligations for improvement bonds. Current installments will be prorated as of the Closing Date. All prorations, unless otherwise provided in this Agreement, shall be on an accrual basis, shall be based upon actual elapsed calendar days and shall be done as of 12:01 a.m. of the day of the Closing. (ii) Seller shall cause to be terminated all light and power and other such utilities for the Real property, effective as of the Closing Date, shall be responsible for all utilities charges and termination fees through the Closing Date, and shall be entitled to receive the refund of all refundable deposits previously made by Seller for such utilities. 5. Condition of the Real Property and Improvements. The City acknowledges and agrees that the Real Property and Improvements are to be sold and conveyed to, and accepted by the City, in an "AS IS" condition with all faults, if any. City has investigated and has knowledge of operative and proposed governmental laws and regulations, including, without limitation, zoning, environmental and land use laws and regulations, to which the Real Property and Improvements are or may be subject and accepts the Real Property and Improvements solely upon the basis of its review and determination of the applicability and effect of such laws and regulations. City further acknowledges it is entering into this Agreement on the basis of Citys own investigation of the physical and environmental conditions of the Real Property and Improvements, including subsurface conditions, and City assumes the risk that adverse physical and environmental conditions may not have been revealed by its own investigation. City further acknowledges that Seller, its agents and employees and other persons acting on behalf of Seller, have made no representation or warranty of any kind in connection with any matter relating to the condition, value, fitness, or zoning of the Real Property or Improvements upon which the City has relied directly or indirectly for any purpose, and Seller hereby disclaims any such warranty. City hereby waives, releases, and forever discharges Seller, Sellers members, managers, successors, heirs and assigns, and any other person acting on behalf of Seller, of and from any claims, actions, causes of action, demands, rights, damages, costs, expenses or compensation whatsoever, direct or indirect, known or unknown, foreseen or unforeseen, which City now has or which may arise in the future on the account of or in any way growing out of 3

4 or connected with the physical or environmental condition of the Real Property and Improvements or any law or regulation applicable thereto. City further agrees to indemnify, defend and hold harmless Seller, its members, managers, successors, agents, heirs and assigns, from and against any and all loss, damage, liability, claim, cost or expense including, without limitation, attorneys fees and court costs, arising from and adverse physical or environmental condition of the Real Property and Improvements or any law or regulation applicable thereto. 6. Businesses and Entities. The City is not purchasing the Seller business entity (TMPM, LLC) nor the motel business or any other business located at the Real Property. The City is also not purchasing any furnishings, fixtures or equipment used in the operation of the motel or any other business at the Real Property. The City is only the Real Property, Improvements and Entitlements and assumes no liability or responsibility for any aspects of the Sellers business entity. The City will pay no relocation or other expenses to any tenant or subtenant. 7. Title. ( a) Within fifteen ( 15) days after the Effective Date of this Agreement, the City shall obtain a preliminary report issued by Title Company ("Preliminary Report") on the Real Property, together with copies of all exceptions reflected in the Preliminary Report. Within fifteen ( 15) days after the receipt by the City of the Preliminary Report, the City shall notify Seller of any exceptions shown in the Preliminary Report disapproved of by the City ("Disapproved Exceptions"). Within ten ( 1 OJ days of the Citys notice setting forth the Disapproved Exceptions, Seller shall notify the City in writing whether it intends to eliminate the Disapproved Exceptions by the Closing Date. If Seller notifies the City that it intends to eliminate the Disapproved Exceptions, Seller shall use commercially reasonable efforts to eliminate the Disapproved Exceptions on or before the Closing Date, but Sellers failure to do so shall constitute only a failure of a condition precedent to Purchasers obligation to purchase the Real Property, and not a default by Seller under this Agreement. If Seller notifies the City that it does not intend to eliminate some or all of the Disapproved Exceptions prior to the Closing Date, the City may terminate this Agreement. If the City elects to terminate this Agreement, the City shall give written notice of termination to Seller within three (3) days following receipt of Sellers notice of its intent not to remove some or all of the Disapproved Exceptions. Failure of the City to give written notice within the three (3) day period shall be deemed a waiver by the City of its right to terminate the Agreement 4

5 pursuant to this Section and the City agrees to accept title subject to such unremoved Disapproved Exceptions. (b) It shall be a condition precedent to the Citys obligation to purchase the Property that Seller convey to the City good and marketable title to the Real Property, subject only to the following permitted exceptions ("Permitted Exceptions"): (i) A lien for real estate taxes and assessments on the Real Property and Improvements not yet due or payable; (ii) All liens, easements, encumbrances or other title exceptions identified in the Preliminary Report and such state of facts as an accurate survey of the Real Property would disclose, other than the Disapproved Exceptions; and (iii) Such other exceptions as may be approved in writing by the City prior to the Closing. Evidence of good and marketable title to the Real Property shall be the willingness of Title Company to issue, as of the Closing Date, a CLTA Owners Policy of Title Insurance with extended coverage insuring that fee title to the real property is vested in the City subject only to the Permitted Exceptions ("Title Policy"). The Title Policy may contain such endorsements as reasonably required by the City provided that the issuance of such endorsements shall not be a condition to the Citys obligations hereunder. The City shall pay the costs for all such endorsements. Seller shall have no obligation to provide any indemnity or agreement to the Title Company or the City to support the issuance of the Title Policy or any such endorsements 8. Sellers right to terminate. Seller agrees that the City is incurring considerable expense in reliance on this Agreement and specifically agrees that, except in the case of a material default by the City, it has no right to terminate this Agreement. 9. Prorations of Property Taxes and other expenses. Seller agrees to pay all property taxes, utility expenses, assessments, mortgages, premiums on insurance and all other expenses for the period up to the Closing Date. Seller agrees to maintain liability and fire insurance on the Real Property and Improvements until Closing Date. 10. Covenants Pending Close of Escrow. During the period from the Effective Date of this Agreement until the Closing Date: 5

6 (a) Encumbrances. Seller shall not subject the Property or any portion of the Property to any lien, encumbrance, or charge not in existence as of the Effective Date of this Agreement and which shall not be eliminated prior to the Closing Date at Sellers expense, without the prior written consent of the City, which consent shall not be unreasonably delayed, conditioned or withheld. (b) Insurance. Seller shall use its best efforts to maintain in full force and effect all insurance policies carried on the Property at the same level of coverage as is in effect on the Effective Date of this Agreement. (c) Entitlements. Seller shall not sell, transfer, convey, assign, encumber or pledge any of the Entitlements from and after the Effective Date of this Agreement without the prior written consent of the City, which consent shall not be unreasonably delayed, conditioned or withheld. 11. Notices. Any notice required to be given under this Agreement shall be in writing and either served personally or sent prepaid, first class mail. Any such notice shall be addressed to the other party at the address set forth below. Notice shall be deemed communicated within 48 hours from the time of mailing if mailed as provided in this section. If to City: City of South Lake Tahoe 1901 Airport Rd. South Lake Tahoe, CA Provide a copy to: If to Seller: With copy to: City Attorneys Office City of South Lake Tahoe 1901 Airport Road, Suite 300 South Lake Tahoe, CA TMPM, LLC Attn: Pradip Patel 3600 Lake Tahoe Boulevard South Lake Tahoe, California Michael McLaughlin Feldman McLaughlin Thiel LLP 178 Highway 50, Suite B P.O. Box 1309 Zephyr Cove, NV

7 12. Amendments. This Agreement may be modified or amended only by a written document executed by both Seller and City and approved as to form by the City Attorney. 13. Severability. If any term or portion of this Agreement is held to be invalid, illegal, or otherwise unenforceable by a court of competent jurisdiction, the remaining provisions of this Agfeement shall continue in full force and effect. 14. Entire Agreement. This Agreement constitutes the complete and exclusive statement of Agreement between City and Seller. All prior written and oral communications, including correspondence, drafts, memoranda, and representations, are superseded in total by this Agreement. 15. Time is of the Essence. Time is of the essence of this Agreement. 16. Authority to Enter Agreement. The parties hereto have all requisite power and authority to conduct their respective businesses and to execute, deliver, and perform the terms and conditions of this Agreement. The parties warrant that the individuals who have signed this Agreement have the legal power, right, and authority to make this Agreement and to bind the respective parties. 17. Damage and Destruction. In the event of damage or destruction of the Property or any portion of the Property prior to the Closing Date, the City shall have no right to terminate this Agreement, but instead Seller shall assign to the City any and all rights of Seller to the related insurance proceeds, and there shall be no reduction in the Purchase Price. 18. Venue; Attorney Fees. In the event of a dispute regarding the interpretation, performance or enforcement of this Agreement, venue for the resolution of any such dispute or disputes shall be in the South Lake Tahoe Branch of the El Dorado County Superior Court. If any legal action or any other proceeding, including an action for declaratory relief, is brought for the enforcement of this Agreement or because of an alleged dispute, breach, default, or misrepresentation in connection with any provision of this Agreement, the prevailing party shall be entitled to recover reasonable attorney fees and other costs incurred in that action or proceeding, in addition to any other relief to which the prevailing party may be entitled. l 0. No Third Party Beneficiaries. No person not a party hereto, including, without limitation, lessees, employees, clients, customers, tenants, subtenants, creditors, or suppliers shall derive any rights hereunder or be construed to be a third party beneficiary hereof. 7

8 11. Condemnation. The sale of the Property to the City hereunder is made in pursuant to the Government Code Offer and under the "threat of condemnation" within the meaning of Section l 033 of the Internal Revenue Code. IN WITNESS WHEREOF, the parties have caused this Agreement to be executed on the date first written above. CITY OF SOUTH LAKE TAHOE: By,4Jw;;, M Austin Sass, Mayor Dated: J ~ /-1- / 7 TMPM, LLC By~~ Pradip Patel, Managing Member Dated: flt...,l "" Mr 11M~ f:._,d - Neha Patel Dated: 03 /lj-1 / J:f= ;LW, ~-t.u. Susan Alessi, City Clerk 8

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