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Closing Documents
Closing Package S I AM E R Q First American Title Company nMR A--1 Wn 94n�1.119nq A. Settlement Statement B. Type of Loan Flathead County Title Company Estimated Statement 1.5. Loan Type 6. FilaNumber 180184-FT 7. Loan Number 8. Mortgage Insurance Case Number C. Note: This form is furnished to give you a slatement of actual settlement costs. Amounts pad to and by the settlement agent are shown, items marked'(POC)' were paid outside this closing; they are shown here for informational purposes and are not included in the totals. D. Name of Borrower. Kalispell Hotel, LLC P.O. Box 1068, Lake Side, MT 59922 E. Name of Seller: City Of Kalispell 311 1st Avenue East Kalispell, MT 59901 F. Name of Lender: Intervest Mortgage G- Property Location: 1840 US Highway 93 S, Kalispell, MT 59901 H. Settlement Agent: Flathead County Title Company Address: 120 First Ave. WeSUP.O. Box 188, Kalispell, MT 59991 1. Estimated Settlement Date: Print Date: 11/2912006, 8:09 AM Disbursement Date: Place of Settlement Address: 120 First Ave. WesUP.O. Box 188, Kalispell, MT 59901 J. Summary of Borrower's Transaction K. Summary of setter's Transaction 100. Gross Amount Due From Borrower 400. Gross Amount Due To Seiler 101. Contract Sales Price 401. Contract Sales Price 1,216,000.00 102. Personal Property 402. Personal Property 103. Settlement charges to borrower (line 1400) 403. Total Deposits 104. 404. 105. 405. Adjustments for items paid by seller in advance Adjustments for items paid by seller in advance 106. Cityltown taxes 406. CityAown taxes 107. County taxes 407. County taxes 11130/06 to 01/01/07 @$583.05/yr 51.12 108. Assessments 408, Assessments 109. 409. 110. 410. 111. 411. 112. 412. 113. 413. 114. 414. 115. 415. 120. Gross Amount Due From Borrower 420. Gross Amount Due To Seiler 1,216,051.12 200. Amounts Paid By Or In Behalf of Borrower 500. Reductions in Amount Due to Seiler 201. Deposit or earnest money 501. Excess deposit (see Instructions) 202. Principal amount of new bans) 502. Se87wnent charges (fine 1400) 5,183.60 203, Existing loan(s) taken subject 503, Existing roan(s) taken subject to 204, 504. Payoff of first mortgage ban 205. 505. Payoff of second mortgage loan 206. 506. 207. 607. j 208. 508, 209. 509, Adjustments for Items unpaid by setter Adjustments for items unpaid by seller 210. City/town taxes 510. City/town taxes 211. County taxes 511, County taxes 212. Assessments 512. Assessments 213. 513. 214. 514. 215. 515. 216. 516, 217, 517. 218. 518. 219. 519. 220. Total Paid By/For Borrower 520. Total Reduction Amount Due Seller 5,183.60 300. Cash At Settlement Fromrro Borrower 600. Cash At Settlement To/From Seller 301. Gross amount due from Borrower (line 120) 601. Gross amount due to Seller Vine 420) 1,216,051.12 302. Less amounts paid bytfor Borro " 602. Less reductions In amounts due to Seiler (line 520) 5,183.60 303. 603. Cash (XTo) ( From) Seller 1,210,867.52 The HUD-1 Settlement Otaternent whi ave prepar s a tnuei accurate account of this transaction. I have caused or will cause the funds to be disbursed in accordan i h t ment. ) Settlement Agent:_ ` ��Z�-- _-- Date:/ _f Y See Supplemental Page for details- e aIll C;1n Ain IPMAA-PT L. Settlement Charges 7D0. Total Sales/Broker's Commission based on price Paid From Paid From Borrower's Seller's Divisbn of Commission (line 700) as follows Funds at Funds at 701 Settlement Settlement 702. 703, Commission paid at Settlement 704. 800. Items Payable in Connection with Loan 801. Loan Origination Fee 802. Loan Discount 803. Appraisal Fee 804. Credit Report 805. Lenders Inspection Fee 806. Mortgage Insurance Application Premium 807. Assumption Fee 808. - 809. 810. 811. 812. 813. 814, Supplemental Summary 900. hems Reoulred by Lender to be Paid in Advance 901. Interest 902. 903. Hazard Insurance Premium for 904. 905. Supplemental Summary 1000. Reserves Deposited with Lender 1001. Hazard insurance 1002. Mortgage Insurance 1003. City Property Taxes 1004. County Property Taxes 1005. Annual assessments 10D6. 1007. 1008. Aggregate Accounting Adjustment 1100. Title Charges 1101. Settlement or closing fee- Flathead County Title Company 1,000.00 1102. Abstract or We search 1103. Title examination 1104. TiOe Insurance Binder 1105. Document Fee 1106. Notary Fee 1107. Attorney Fee (includes above Hem numbers:) 1108. Title Insurance - See supplemental page for breakdown of individual fees and payees 4,133.60 includes above item numbers: 1109, 'Lenders coverage $17,000,000.00 1110. Owners coverage $17,000,000.00 Premium: $4,133.60 1111. 1112. 1113. 1114. 1115. 1116. 1117. 1200. Government Recordina and Transfer Chames 1201. Recording fees: 1202. City/county tWstamps: 1203. State taxtstamps: 1204. 1205. 1206. 1300, Additional Settlement Charges 1301. Survey to 1302. Pest Inspection to 1303. Courier and Handling Fee - Flathead County Title Company 50.00 1304. 1305. 1306. 1307. 1308. 1309. 1310. 1311. 1312. 1313. 1314. Supplemental Summary 1400. Total Settlement Charges (enter on lines 103, Section J and 502, Section K) 5,183.60 bee zuppemenmr rage nor oerans. File No. Supplemental Page 180184-FT HUDA Settlement Statement Flathead County Title Company Loan No. Estimated Statement Settlement Date: Borrower Name & Address: Kalispell Hotel, LLC P.O. Box 1068, Lake Side, MT 59922 Seller Name & Address: City Of Kalispell 3121st Avenue East Kalispell, MT 59901 Paid From Paid From Section L. Settlement Charges continued Borrower's Seller's Funds at Funds at Settlement Settlement 1108. Supplemental Summary 4,133.60 a) PoBc -Owne(s Policy - Flathead County Title Company 2,739.60 b) Policy -Leasehold Policy Standani Owners - Flathead County Title Company 1,394.00 The following Section is restated from the Settlement Statement Page 1 300. Cash At Settlement Fromrro Borrower 600. Cash At Settlement To1From Seller 301. Gross amount due from Borrower (tine 120) 601. Gross Amount due to Seller (Ilne 420) 1,216,051.12 302. Less amounts paid bytfor Borrower (line 220) fief. Less reductions In amounts due to Seller pine 54) 5,183.60 303. 603, Cash (X To) ( From) Seller 1,210,867.52 I have carefully reviewed the HUD-1 Settlement Statement and to the best of my knowledge and belief; it is a true and accurate statement of all receipts and distributions made on my account or by me in this transaction. 1 further certify that I have received a copy of the HUD-1 Settlement Statement. SELLER(S): City Of Kalispell By: James H. Patrick, City Manager Flathead County Title qompa By r Flathead Count. Title Com- - pany 120 First Ave. West/P.O. Box 188, Kalispell, MT 59901 Phone (406)755-5028, Fax (406)755-3299 To: (Flathead County Title Company File No.: 180184-FT O ;Escrow Officer: Date: November 28, 2006 Re: 1840 US Highway 93 S, Kalispell, MT S9901 Please indicate beiowthe manner in which you wish to receive proceeds due you , if any, after closing: i [] Hold check for pick -up -Phone ( ) [] ReguiarMaii, to Forwarding Address Below F-j Deposit proceeds to Bank As Shown Below []*0vernightMa11,, to Forwarding Address Below (Deposit Slip must be provided to Escrow Agent) *Wire proceeds to Bank As Shown Below *A fee may be charged for these services Ba*Name: i7 jaCis (r Banff Forwarding Address: Address: OZ;2 M w-n Sf 59`t�01 Name on Acct: C% �(11 OP j�alISpeI I Account No.: 010 l(0 5 583 Routing No.: (for wires) Phone No.: '7 j (p - 4Q 00 Phone: ( ) Type of Account: C] Checking F] Savings Any further instructions: SEIL!ER(S): City ;Of Kalispell James H. Patrick, City Manager CLOSING•'+INSTRUCTIONS PURCHASE Escrow No.: 180184-FT Officer: Rosie Parks Date: November 29, 2006 Buyer: Kalispell Hotel, LLO To: Flathead County Title Company, 120 First Ave. West/P.O. Box 188, Kalispell, MT 59901 I/We, hereby agree to purchase the hereinafter property as described in Schedule A of Commitment No. 180184- FT situated in Flathead County, Montana for a total consideration of $1,216,000.00 and will on or before closing hand you said consideration, which is payable as follows: Earnest Money Deposit -0- Balance of Sales Price in the amount of $1,216,000.00 (closing costs and/or fees are additional) I/We will deliver to you any additional funds and execute any instruments which are necessary to comply with the terms hereof, all of which you may use when you hold for me a Warranty Deed from: CityOf Kalispell You are authorized and instructed to issue the specified title insurance policy or policies, in the specified amounts, to -wit: OWNERS LEASEHOLD $500,000.00 LENDERS EAGLE $ OWNERS STANDARD17,000,000.00 OWNERS EXTENDED $ LENDERS STANDARD $ LENDERS EXTENDED $17,000,000.00 on the property described on attached Order No.: 180184-FT ng title vested in: Kalispell Hotel, LLC ragraphs 1-8,9 nsurance Order ed hereto. as paid, 11,12,13,17,18,20,21,22,2,24 of Schedule 'B' of Owner's Commitment for No. 18018-FT, dated November 02, 2006, Revision No. Nine, a copy of which is nal documents creating exceptions that will be recorded at the time of closing: Indenture, Assignment of Lease read the above referenced preliminary title commitment and approve the policy of title nce to be issueo as required by instructions to include the above vesting and exceptions: Initials: CLOSING ESCROW INSTRUCTIONS PURCHASE Escrow No.: 180184-FT Officer; Rosie Parks Date: November 29, 2006 Buyer: Kalispell Hotel, LLC To: Flathead County Title Company, 120 First Ave. West/P.O. Box 188, Kalispell, MT 59901 I/We hereby agree to purchase the hereinafter property as described in Schedule A of Commitment No. 180184- FT, situated in Flathead County, Montana for a total consideration of $1,216,000.00 and will on or before closing hand you said consideration, which is payable as follows: Earnest Money Deposit $-0- Balance of Sales Price in the amount of $1,216,000.00 (closing costs and/or fees are additional) I/We will deliver to you any additional funds and execute any instruments which are necessary to comply with the terms hereof, all of which you may use when you hold for me a Warranty Deed from: City Of Kalispell You are authorized and instructed to issue the specified title insurance policy or policies, in the specified amounts, to-wiL-. OWNERS LEASEHOLD $500,000.00 LENDERS EAGLE $ OWNERS STANDARD$ 17,000,000. 00 OWNERS EXTENDED $ LENDERS STANDARD $ LENDERS EXTENDED $17,000,000.00 on the property described on attached Order No.: 180184-FT Showing title vested in., Kalispell Hotel, LLC Subject to: 1. Paragraphs of Schedule V of Owner's Commitment for Title Insurance Order No. 180184-FT, dated October 11, 2006, Revision No. , a copy of which is attached hereto. 2. Additional documents creating exceptions that will be recorded at the time of closing: I have read the above referenced preliminary title commitment and approve the policy of title insurance to be issued as re . d by instructions to include the above vesting and exceptions: a Buyers Initials: ll:: ill li I �; p 11 is I I rel b—ZErr *r negotiated outside of this escrow. Sellers) and Buyer(s) hereby acknowledge that all contingencies and conditions on the Buy/Sell Agreement dated 5/15/2006 and addendums dated November 29, 2006, have been either satisfied or negotiated outside of this escrow. Seller initials: Buyer initials: PRORATE AND/OR ADJUST THE FOLLOWING AS OF 11/29/2006 -CHECK THOSE WHICH APPLY- x'' 1. Taxes based on the amount of the tax statement set forth below under type of taxes for the year therein specified of the Tax Collector which has been issued prior to the close of escrow. No liability is assumed for the errors, omissions, and/or changes in the amount of the General County Taxes assessed on real and personal property by the County Assessor and/or Taxing Authority. (If the amount of the new tax bill issued by the Tax Collector after the close of escrow is more or less than the amount used for proration purposes, the difference, if any, will be adjusted by the parties herein outside of escrow.) Sellers are to FORWARD to buyers any present or future tax bills on property herein. TYPE OF TAXES: [ x ] Real Property 2006 [ ] Mobile Horne [ ) Personal Property 2. Rents/Security Deposits 3. Condo or Homeowner's Association Dues 4. City Water/Sewer S. City/County SID's (State Specific) 6. Other Seller initials: Buyer initials: Loan amounts shown in seller(s) and buyer(s) settlement statements were determined from information provided to Flathead County Title Company by the lender, or escrow provider, copies of which are available to the parties for inspection. Any inaccuracies or deficiencies in the calculation of these amounts by the lender or escrow provider remai the responsibility of the party legally obligated thereunder. Seller initials: Buyer initials: The parties acknowledge that Flathead County Title Company is not responsible for the transfer of any water, or water Iriahts. I hereby agree to hold you harmless from the failure of the transfer of water to myself regardless of the reason or cause. If any transfer of water is being done, it is an accommodation for me. I understand that you have not made a search of the water rights to this land. I further understand that you are not making any representation and warranty concerning said water rights. Sellerl initials: Buyer initials: Seller initials: Buyer initials: PRORATE AND/OR ADJUST THE FOLLOWING AS OF 11/29/2006 -CHECK THOSE WHICH APPLY- x 1. Taxes based on the amount of the tax statement set forth below under type of taxes for the year therein specified of the Tax Collector which has been issued prior to the close of escrow. No liability is assumed for the errors, omissions, and/or changes in the amount of the General County Taxes assessed on real and personal property by the County Assessor and/or Taxing Authority. (If the amount of the new tax bill issued by the Tax Collector after the close of escrow is more or less than the amount used for proration purposes, the difference, if any, will be adjusted by the parties herein outside of escrow.) Sellers are to FORWARD to buyers any present or future tax bills on property herein. TYPE OF TAXES: [ x ] Real Property 2006 [ ] Mobile Home [ ] Personal Property 2. Rents/Security Deposits 3. Condo or Homeowner's Association Dues 4. City Water/Sewer S. City/County SID's (State Specific) 6. Other Seller initials: Buyer initials: LOAN CALCULATIONS/PAYOFFS Loan amounts shown in seller(s) and buyer(s) settlement statements were determined from information provided to Flathead County Title Company by the lender, or escrow provider, copies of which are available to the parties for inspection. Any inaccuracies or deficiencies in the calculation of these amounts by the lender or escrow provider remain the responsibility of the party legally obligated thereunder. '1� Seller initials: Buyer initials: ?water, WATER RIGHTS The parties acknowledge that Flathead County Title Company is not responsible for the transfer of or water rights. I hereby agree to hold you harmless from the failure of the transfer of water to myself regardless of the reason or cause. If any transfer of water is being done, it is an accommodation for me. I understand that you have not made a search of the water rights to this land. I further understand that you are not making any representation and warranty concerning said water rights. Seller Initials: Buyer initials:�-�' Flathead County Title Company is hereby authorized and instructed to insert appropriate addresses on and all documents generated by this escrow, that may or may not have been previously signed by buyers and/or sellers herein. Sellers) and Buyer(s) hereby acknowledge that all contingencies and conditions on the Buy/Sell Agreement dated 5/15/2006 and addendums dated November 29, 2006, have been either satisfied or negotiated outside of this escrow. Seller initials: Buyer initials: PRORATE AND/OR ADJUST THE FOLLOWING AS OF 11/29/2006 -CHECK THOSE WHICH APPLY- x 1. Taxes based on the amount of the tax statement set forth below under type of taxes for the year therein specified of the Tax Collector which has been issued prior to the close of escrow. No liability is assumed for the errors, omissions, and/or changes in the amount of the General County Taxes assessed on real and personal property by the County Assessor and/or Taxing Authority. (If the amount of the new tax bill issued by the Tax Collector after the close of escrow is more or less than the amount used for proration purposes, the difference, if any, will be adjusted by the parties herein outside of escrow.) Sellers are to FORWARD to buyers any present or future tax bills on property herein. TYPE OF TAXES: [ x ] Real Property 2006 [ ] Mobile Home [ ] Personal Property 2. Rents/Security Deposits 3. Condo or Homeowner's Association Dues 4. City Water/Sewer 5. City/County SID's (State Specific) 6. Other Seller initials: Buyer initials: Loan; amounts shown in seller(s) and buyer(s) settlement statements were determined from information provided to Flathead County Title Company by the lender, or escrow provider, copies of which are available to the parties for inspection. Any inaccuracies or deficiencies in the calculation of these amounts by the lender or escrow provider remain the responsibility of the party legally obligated thereunder. Seller initials: Buyer initials: WATER RIGHTS The parties acknowledge that Flathead County Title Company is not responsible for the transfer of any water, or wateY rights. I hereby agree to hold you harmless from the failure of the transfer of water to myself regardless of the reason or cause. If any transfer of water is being done, it is an accommodation for me. I understand that you have not made a search of the water rights to this land. I further understand that you are not making any representation and warranty concernin said water rights. Seller initials: Buyer initials: Flathead County Title Company is hereby authorized and instructed to insert appropriate addresses on any and all documents generated by this escrow, that may or may not have been previously signed by buyers and/or sellers herein. FeWN0941a : i ' I i£f] MISCELLANEOUS FEES Escrow Holder may incur certain additional costs on behalf of the parties for services performed by third party providers. The fees charged by Escrow Holder for such services may include a mark up over the direct cost of such; services to reflect the averaging of direct, administrative and overhead charges of Escrow Holder for such In the event a lender who is paid in full in connection with this escrow, fails to timely forward the paid Note and a request for reconveyance of the paid Deed of Trust, the escrow holder acting as trustee and title insurer may use the procedures outlined in state statutes and regulations to effect a reconveyance of the Deed of Trust. Among other provisions of this chapter is the following: `The reconveyance of a trust deed pursuant to this chapter shall not itself discharge any personal obligation that was secured by the trust deed at the time of its reconveyance." All disbursements shall be made by your check. You are authorized not to close escrow or disburse until good funds, as provided for in state statutes and regulations have been confirmed. All funds received in this escrow shall'; be deposited in one or more of your general escrow accounts with any bank doing business in said State may be transferred to any other general escrow account or accounts. Upon specific instructions from all parties to this escrow, you may hold funds as otherwise instructed herein. CLOSE OF ESCROW The expression "close of escrow" means the date on which instruments referred to herein are filed for record unless otherwise indicated herein. Recordation of any instrument delivered through this escrow, if necessary or proper in the issuance of a policy of title insurance called for, is hereby authorized. You are to only furnish a copy of these instructions, amendments thereto, closing statements and/or any other documents deposited in this escrow, to the lender or lenders, the real estate broker or brokers and/or the attorney or attorneys involved in this transaction upon request of such lenders, brokers or attorneys. Should you, before or after the close of escrow, receive or become aware of any conflicting demands or claims with respect to this escrow or the rights of any of the parties hereto, or any money or property deposited herein or affected hereby, you shall have the right to discontinue any or all further acts on your part until such conflict is resolved to your satisfaction, and you shall have the further right to commence or defend any action or proceedings for the determination of such conflict. The provisions herein shall include, but are not limited to, conflicting demands or disputed claims relating to the real estate commissions and/or brokerage fees. The parties hereto jointly and severally agree to pay all costs, damages, judgments and expenses, including reasonable attorney's fees suffered or incurred by you in connection with, or arising out of this escrow, including, but without limiting the generality of the foregoing, as suit in interpleader brought by you. The parties expressly agree that you, as escrow holder, have the absolute right, at your election, to file an action in interpleader. You are authorized to deposit with the Clerk of Court all documents and funds held in this escrow. If any party to this escrow elects to cancel these instructions because of the failure of any party to comply with any of the terms hereof within the time limits provided herein, said party so electing to cancel shall deliver a written notice to the other party and escrow agent demanding that said other party comply with the terms hereof within' ten days from the receipt of said notice by escrow agent that these instructions shall hereupon become canceled. When the written notice is delivered to escrow agent by the party so electing to cancel, escrow agent shall within 5 days thereafter send a copy of said notice to the other party in the manner provided by law and the MISCELLANEOUS FEES Escrow Holder may incur certain additional costs on behalf of the parties for services performed by third party providers. The fees charged by Escrow Holder for such services may include a mark up over the direct cost of such services to reflect the averaging of direct, administrative and overhead charges of Escrow Holder for such services. RECONVEYANCE In the event a lender who is paid in full in connection with this escrow, fails to timely forward the paid Note and a request for reconveyance of the paid Deed of Trust, the escrow holder acting as trustee and title insurer may use the procedures outlined in state statutes and regulations to effect a reconveyance of the Deed of Trust. Among other provisions of this chapter is the following: "The reconveyance of a trust deed pursuant to this chapter shall not itself discharge any personal obligation that was secured by the trust deed at the time of its reconveyance." DEPOSIT OF FUNDS AND DISBURSEMENTS All " disbursements shall be made by your check. You are authorized not to dose escrow or disburse until good funds, as provided for in state statutes and regulations have been confirmed. All funds received in this escrow shall be deposited In one or more of your general escrow accounts with any bank doing business in said State may be transferred to any other general escrow account or accounts. Upon specific instructions from all parties to this escrow, you may hold funds as otherwise instructed herein. CLOSE OF ESCROW The expression "close of escrow" means the date on which instruments referred to herein are filed for record unless otherwise indicated herein. Recordation of any instrument delivered through this escrow, if necessary or proper in the issuance of a policy of title insurance called for, is hereby authorized. AUYHORIZATION TO FURNISH COPIES You are to only furnish a copy of these instructions, amendments thereto, closing statements and/or any other documents deposited In this escrow, to the lender or lenders, the real estate broker or brokers and/or the attorney or attorneys involved in this transaction upon request of such lenders, brokers or attorneys. CONFLICTING DEMANDS OR CLAIMS Should you, before or after the close of escrow, receive or become aware of any conflicting demands or claims with respect to this escrow or the rights of any of the parties hereto, or any money or property deposited herein or affected hereby, you shall have the right to discontinue any or all further acts on your part until such conflict is resolved to your satisfaction, and you shall have the further right to commence or defend any action or proceedings for the determination of such conflict. The provisions herein shall include, but are not limited to, conflicting demands or disputed claims relating to the real estate commissions and/or brokerage fees. ATTORNEYS FEES, COST,(SUIT IN INTERPLEADER The parties hereto jointly and severally agree to pay all costs, damages, judgments and expenses, including reasonable attorney's fees suffered or incurred by you in connection with, or arising out of this escrow, including, but'without limiting the generality of the foregoing, as suit in interpleader brought by you. The parties expressly agree that you, as escrow holder, have the absolute right, at your election, to file an action in interpleader. You are;authorized to deposit with the Clerk of Court all documents and funds held in this escrow. RIGHT OF CANCELLATION If any party to this escrow elects to cancel these instructions because of the failure of any party to comply with any, of the terms hereof within the time limits provided herein, said party so electing to cancel shall deliver a written notice to the other party and escrow agent demanding that said other party comply with the terms hereof within ten days from the receipt of said notice by escrow agent that these instructions shall hereupon become canceled. When the written notice is delivered to escrow agent by the party so electing to cancel, escrow agent shall within 5 days thereafter send a copy of said notice to the other party in the manner provided by law and the usual practices of the escrow agent. In the event said other party shall fail within said ten day period to comply with all of the terms hereof, these instructions shall become canceled and escrow agent is thereupon authorized: (a) first, to pay to the party electing to cancel any earnest money deposited hereunder by said other party, after deducting any charges: (b) second, to pay to said other party, any other money deposited hereunder by said other party, after deducting any charges remaining unpaid; (c) third, to pay to the party electing to cancel, any money deposited by said party, after deducting any charges remaining unpaid; and (d) fourth, to return all documents deposited hereunder to the party who delivered the same except documents executed by more than one party, which shall be marked "canceled" and retained in the files of escrow agent. LEGAL ADVICE Both Seller and Buyer acknowledge by their signatures hereon the following: I have been specifically informed that Flathead County Title Company (hereinafter designated as "Flathead County Title Company") is not licensed to';practice law and no legal advice has been offered by Flathead County Title Company or any of its employees, I have been further informed that Flathead County Title Company is acting only as escrow agent and that it is forbidden by law from offering advice to any party regarding the merits of this escrow transaction or the nature ofthe instruments utilized, and that it has not done so. I have not been referred by Flathead County Title Company to any named attorney or attorneys or discouraged from seeking advice of any attorney, but have been requested to seek legal council of my own choosing at my own expense, if I have doubt concerning any aspect of this transaction. PREPARATION OF FORM DOCUMENTS I further declare all instruments to which I am a party, if prepared by Flathead County Title Company , have been prepared under the direction of my attorney, agents acting in my behalf, or myself, at my direction or request, and particularly declare that copying legal descriptions from title reports onto forms of deeds, etc., or reforming of legal descriptions or agreements, is or will be solely at my direction or request. PERSONAL PROPERTY TAXES No, examination or insurance as to the amount or payment of personal property taxes is required unless specifically requested. TAXPAYER REPORTING INFORMATION The Seller(s) acknowledges that Federal Law requires Flathead County Title Company to report this transaction to the Internal Revenue Service on Form 1099. FACSIMILES/gLECTRONIC DOCUMENT DELIVERY In the event Seller and/or Buyer utilize facsimile or electronically transmitted documents, Seller and Buyer agree to accept and instruct Flathead County Title Company to rely upon documents as if they bore original signatures. Seller and Buyer agree to provide the documents bearing the original signatures within S days of transmission. Seller and Buyer acknowledge and agree that any documents necessary for recording may not be accepted by the County Clerk and Recorder, with facsimile or electronically transmitted signatures, thus delaying the close of escrow. AMENDMENTS TO ESCROW INSTRUCTIONS Any amendments of and/or supplements to any instructions must be in writing. If any "Earnest Money Agreements," "Receipt and Agreements to Purchase" or the like are attached to these instructions and one or more terms of said agreements conflict with or vary from these instructions, these instructions shall nevertheless, control. usual practices of the escrow agent. In the event said other party shall fail within said ten day period to comply withlall of the terms hereof, these instructions shall become canceled and escrow agent is thereupon authorized: (a) first, to pay to the party electing to cancel any earnest money deposited hereunder by said other party, after deducting any charges: (b) second, to pay to said other party, any other money deposited hereunder by said other party, after deducting any charges remaining unpaid; (c) third, to pay to the party electing to cancel, any money deposited by said party, after deducting any charges remaining unpaid; and (d) fourth, to return all documents deposited hereunder to the party who delivered the same except documents executed by more than one party, which shall be marked "canceled" and retained in the files of escrow agent. Both' Seller and Buyer acknowledge by their signatures hereon the following: I have been specifically informed that iFlathead County Title Company (hereinafter designated as "Flathead County Title Company") is not licensed to practice law and no legal advice has been offered by Flathead County Title Company or any of its employees. I have been further informed that Flathead County Title Company is acting only as escrow agent and that it is forbidden by law from offering advice to any party regarding the merits of this escrow transaction or the nature of the instruments utilized, and that it has not done so. I have not been referred by Flathead County Title Company to any named attorney or attorneys or discouraged from seeking advice of any attorney, but have been requested to seek legal council of my own choosing at my own expense, if I have doubt concerning any aspect of this transaction. Ter declare all instruments to which I am a party, if prepared by Flathead County Title Company, have been red under the direction of my attorney, agents acting in my behalf, or myself, at my direction or st, and particularly declare that copying legal descriptions from title reports onto forms of deeds, etc., or ring of legal descriptions or agreements, is or will be solely at my direction or request. No examination or insurance as to the amount or payment of personal property taxes is required unless specifically requested. The Seller(s) acknowledges that Federal Law requires Flathead County Title Company to report this transaction to the Internal Revenue Service on Form 1099. In the event Seller and/or Buyer utilize facsimile or electronically transmitted documents, Seller and Buyer agree to accept and instruct Flathead County Title Company to rely upon documents as if they bore original signatures. Seller and Buyer agree to provide the documents bearing the original signatures within 5 days of transmission. Seller and Buyer acknowledge and agree that any documents necessary for recording may not be accepted by the County Clerk and Recorder, with facsimile or electronically transmitted signatures, thus delaying the close of escrow. AMENDMENTS TO ESCROW INSTRUCTIONS Any !amendments of and/or supplements to any instructions must be In writing. If any "Earnest Money Agreements," "Receipt and Agreements to Purchase" or the like are attached to these instructions and one or mare terms of said agreements conflict with or vary from these instructions, these instructions shall nevertheless, We have been afforded adequate time and opportunity to read and understand these escrow instructions and all other documents referred to therein. Dated: (November 29, 2006 BUYER(S): Kalispell Hotel, LLC By: 9NG K "lispell LLC, An Ohio LLC, embo Robert Voekler, Member By: Mojo Hotel LLC, A Montana LLC, Member, Joseph D. Guilbault, Sole Member By: Edwards Kalispell, Ltd.,An Ohio LLC, Mem, Hugh A. Edwards, Sole Member Address: Side,Lake SE.LER(S): City Of Kalispell I/We approve of the foregoing instructions, agree to be bound thereof, and agree to sell and will deliver to you papers, Instructions and/or funds required from me within the time limits specified herein, which you are authorized to deliver when you can issue your policy of title insurance as set forth above. You are instructed to use; the money and record the instruments to comply with said escrow Instructions and to pay all encumbrances of record necessary, without further approval including prepayment penalties to show title as herein provided. I agree to pay your usual sellers escrow fee, drawing of documents and such other charges which are advanced for my;account regardless of the consummation of this escrow. I also agree to pay the policy of title insurance premium and recording fees which are properly chargeable to me. City Of Kalispell By: James H. Patrick, City Manager Address: 312 1st Avenue East We 'have been afforded adequate time and opportunity to read and understand these escrow instructions and all other documents referred to therein. Dated: November 29, 2006 BUYER(S): Kalispell Hotel, LLC By: GHG Kalispell LLC, An Ohio LLC, Member, Robert Voekler, Member and Manager B ojo Hotel LLC, A Montana LLC, Member, Joseph D. Guilbault, Sole Member By: Edwards Kalispell, Ltd.,An Ohio LLC, Mem, Hugh A. Edwards, Sole Member Address: P.O. ;Box 1068 Lake Side, MT 59922 Lake Side, MT 59922 SELLER(S): City Of Kalispell I/We approve of the foregoing instructions, agree to be bound thereof, and agree to sell and will deliver to you papers, instructions and/or funds required from me within the time limits specified herein, which you are authorized to deliver when you can issue your policy of title insurance as set forth above. You are instructed to use the money and record the instruments to comply with said escrow instructions and to pay all encumbrances of record necessary, without further approval including prepayment penalties to show title as herein provided. I agree to pay your usual sellers escrow fee, drawing of documents and such other charges which are advanced for my account regardless of the consummation of this escrow. I also agree to pay the policy of title insurance premium and recording fees which are properly chargeable to me. City Of Kalispell : James H. Patrick, City Manager 312 1st Avenue East Wei have been afforded adequate time and opportunity instructions and all other documents referred to therein. Dated; November 29, 2006 BUYER(S): Kalispell Hotel, LLC By: GHG Kalispell LLC, An Ohio LLC, Member, Robert Voekler, Member and Manager By: Mojo Hotel LLC, A Montana LLC, Member, Joseph D. Guilbault, Sole Member By: Edwards Kalispell, Ltd.,An Ohio LLC, Mem, Hugh A. Edwards, Sole Member • • :.. 1068 Lake Side, Lake Side, MT .. 22 SELLER(S): city Of Kalispell to read and understand these escrow I/We approve of the foregoing instructions, agree to be bound thereof, and agree to sell and will deliver to you papers, instructions and/or funds required from me within the time limits specified herein, which you are authorized to deliver when you can issue your policy of title insurance as set forth above. You are instructed to use the money and record the instruments to comply with said escrow instructions and to pay all encumbrances of record necessary, without further approval including prepayment penalties to show title as herein provided. I agree to pay your usual sellers escrow fee, drawing of documents and such other charges which are advanced for my account regardless of the consummation of this escrow. I also agree to pay the policy of title insurance premium and recording fees which are properly chargeable to me. City Of Kalispell es H. Patrick, City Manager Address: 312 lit Avenue East Form No. 1068-2 Commitment No.: 180184-FT Plain Language Commitment Page 2 of 11 Ninth COMMITMENT SCHEDULE 1. Commitment Date : November 02, 2006 at 7:30 A.M. 2. Policy or Policies to be issued: Policy Amount Premium Amount Owner's Policy Standard Owner's Policy (10/17/92) Form 1402-92 $ 17,000,000.00 $ 25,544.00 with applied credit of $ None Proposed Insured: Kalispell Hotel, LLC Loan Policy Extended Loan Policy (10-17-92) Form 1056-92 $17,000,000.00 $7,706.20 with applied credit of $ None Proposed Insured: Intervest Mortgage, it's successors and/or assigns as their respective interest may appear Endorsements: 6/9/15.1/116/451110.1 $185.00 3. A fee simple interest in the land described in this Commitment is owned, at the Commitment Date by: 4. The land referred to in this Commitment is described as follows: Commonly known as: 1840 US Highway 93 S Kalispell, MT 59901 Form No. 1068-2 Plain Language Commitment Commitment No.: 180184-FT Page 3 of 11 SCHEDULE B-SECTION ONE The following requirements must be met: (a) Pay the agreed amounts for the interest in the land and/or the mortgage to be insured. (b) Pay us the premiums, fees and charges for the policy. (c) Documents satisfactory to us creating the interest in the land and/or the mortgage to be insured must be signed, delivered and recorded. (d) You must tell us in writing the name of anyone not referred to in this Commitment who will get an interest in the land or who will make a loan on the land. We may then make additional requirements and exceptions. (e) Release(s) or Reconveyance(s) of items(s) as required by buyer. (f) If any document in the completion of this transaction is to be executed by an attorney -in -fact, the Power of Attorney must be submitted for review prior to closing. (g) You must give us the following information: 1. Any off record leases, surveys, etc. 2. Statement(s) of identity, all parties. 3. Other. (h) The policy liability contemplated by this transaction exceeds our local limit. Underwriter approval must be obtained from the Home Office or Regional Office prior to closing. Please contact the title officer in advance of the closing date to discuss the specifics of the proposed transaction, including identity of proposed Insureds, endorsement requirements, and exceptions which are to be eliminated. (i) With respect to Kalispell Hotel a L.L.C. we require: a. A copy of its operating agreement and any amendments, b. A certificate of good standing of recent date issued by the secretary of state of the L.L.C.'s state of domicile, C. That the forthcoming conveyance, encumbrance or other Instrument executed by the L.L.C. upon which the Company is asked to rely, be executed in accordance with its operating agreement. d. Other requirements which the Company may impose following its review of the material required herein and other information which the Company may require. We require proof that all Montana Code requirements have been complied with, regarding the sale and lease of property owned by the City of Kalispell. Form No. 1068-2 Commitment No.: 180184-Fr Plain Language Commitment Page 4 of 11 (k) We require a copy of documentation evidencing the power and authority of the party or parties who plan to execute the forthcoming conveyance and lease agreement on behalf of the City of Kalispell. (1) Paragraph 6 will not be deleted until we have reviewed and approved the following: 1. Lien subordinations from the general contractors and sub -contractors for work done. 2. Lien releases for all work and/or materials furnished on the project up to the time of recording the Trust Indenture to be insured. 3. Indemnity agreement to be executed by the general contractor and/or record owner. 4. Financial statement of the general contractor and/or record owner. Please have the general contractor and/or record owner contact the title department for details on the above requirement. (m) We require that the lease or a memorandum of the lease creating the interest to be insured be recorded. (as to Tracts 1-4) (n) We require a complete copy of the lease to be insured together with all supplements, assignments and amendments. (as to Tracts 1-4) (o) We will require a Certificate of Completion of Construction, Indemnity Agreement as to Mechanics Liens, and a physical inspection to issue the 110.1 endorsement to remove exceptions 1-4 and 6 from said policy and in order to issue endorsements 9 and 116. Form No.1068-2 Plain Language Commitment Commitment No.: 180184-FT Page 5 of 11 Any policy we issue will have the following exceptions unless they are taken care of to our satisfaction. PART %: 1. Taxes or assessments which are not shown as existing liens by the records of any taxing authority that levies taxes or assessments on real property or by the public records. 2. Any facts, rights, interests, or claims which are not shown by the public records but which could be ascertained by an inspection of said land or by making inquiry of persons in possession thereof. 3. Easements, claims of easement or encumbrances which are not shown by the public records. 4. Discrepancies, conflicts in boundary lines, shortage in area, encroachments, or any other facts which a correct survey would disclose, and which are not shown by the public records. 5. (A) Unpatented mining claims; (B) Reservations or exceptions in patents or in Acts authorizing the issuance thereof; (C) Water rights, claims or title to water; whether or not the matters excepted under (A), (B) or (C) are shown by the public records. 6. Any lien, or right to a lien, for services, labor or material heretofore or hereafter furnished, imposed by law and not shown by the public records. 7. Any right, title or interest in any minerals, mineral rights, or related matters, including but not limited to oil, gas, coal, and other hydrocarbons. 8. County road rights -of -way not recorded and indexed as a conveyance of record in the office of the Clerk and Recorder pursuant to Title 70, Chapter 21, M.C.A., including, but not limited to any right of the Public and the County of Flathead to use and occupy those certain roads and trails as depicted on County Surveyor's maps on file in the office of the County Surveyor of Flathead County. 9. 2006 taxes and special assessments are a lien; amounts are determined and payable. The first one-half becomes delinquent after November 30th of the current year, the second one-half becomes delinquent after May 31st of the following year. General taxes as set forth below. Any amounts not paid when due will accrue penalties and interest in addition to the amount stated herein: Year 1st Half 2nd Half Parcel Number 2006 $291.53 Unpaid $291.52 Unpaid 75-F031050 (as to Tract 5) Form No, 1068-2 Plain Language Commitment Commitment No.: 180184-FT Page 6 of it 10. 2006 taxes are exempt. Tract 1 Assessor #75-E029450, Tract 2 Assessor #75-E002551, Tract 3 and 4 Assessor #75-E001066 (as to tracts 1-4) 11. Resolution for Designation of Limited Access Highway executed by the State Highway Commission, recorded October 25, 1991, as Doc. No. 91-298-15550. 12. Resolution No. 1060A executed by the Flathead County Commissioners for an amendment to the Kalispell City -County Master Plan by adding the Kalispell City Airport Neighborhood Plan as an Addendum, recorded February 6, 1995, as Doc. No. 1995-037-08300. 13. Ordinance No. 1242 for the approval of the Kalispell City Airport/Athletic Complex Redevelopment Plan, recorded December 31, 1996, as Doc. No. 96-366-14450, and recorded January 16, 1997 as Doc. No. 1997-016-14310 14. All matters, covenants, conditions, restrictions, easements and any rights, interests or claims which may exist by reason thereof, disclosed by Record of Certificate of Survey No. 12729 recorded August 9, 1996 , as Doc. No. 1996-222-10300, but deleting any covenant, condition or restriction indicating a preference, limitation or discrimination based on race, color, religion, sex, handicap, familial status, or national origin to the extent such covenants, conditions or restrictions violate 42 USC 3604(c). (Affects Tract 2) 15. Covenants, Conditions and Restrictions recorded May 20, 1969, in Book 507 of , page 116, as Doc. No. 3330, but omitting any covenant, condition or restriction based on race, color, religion, sex, handicap, familial status, or national origin to the extent that such covenants, conditions or restrictions violate 42 USC 3604(c). (Affects Tracts 3 and 4) 16. All matters, covenants, conditions, restrictions, easements and any rights, interests or claims which may exist by reason thereof, disclosed by Record of Certificate No. Survey 13656, recorded November 10, 1998 , as Doc. No. 1998-314-15110, but deleting any covenant, condition or restriction indicating a preference, limitation or discrimination based on race, color, religion, sex, handicap, familial status, or national origin to the extent such covenants, conditions or restrictions violate 42 USC 3604(c). (Affects a portion of Tract 3) 17. Resolution No. 2505 extending the corporate limits of the City of Kalispell, Montana, recorded July 23, 1963 in Book 456, Page 44 as Doc. No. 5590. (Affects Tract 5) 18, Easement for installing and maintaining a city water line granted to the City of Kalispell, a Municipal Corporation recorded July 12, 1974 in Book 571, Page 121, as Doc. No. 6679 (Affects Tract 5) 19. The company will not assume any responsibility or liability for any actions of Judgments brought against the City of Kalispell. Form No. 1068-2 Plain Language Commitment Commitment No.: 180184-FT Page 7 of 11 20. All matters, covenants, conditions, restrictions, easements and any rights, interests or claims which may exist by reason thereof, disclosed by Record of Certificate of Survey No. 17045 recorded November 23, 2005 , as Doc. No. 2005-327-12410, but deleting any covenant, condition or restriction indicating a preference, limitation or discrimination based on race, color, religion, sex, handicap, familial status, or national origin to the extent such covenants, conditions or restrictions violate 42 USC 3604(c). (Affects Tract 5) 21, Ordinance No. 1574 and Planned Unit Development Agreement Hilton Garden Inn and Conference Center, recorded July 11, 2006, as Doc. No. 2006-192-08460. (Affects Tract 5) 22. Easement to construct, operate, maintain, replace, upgrade and remove a natural gas pipeline, communication system, and necessary appurtenances granted to Northwestern Corporation d/b/a Northwestern Energy, recorded August 9, 2006 as Doc. No. 2006-221-15000. (Affects Tract 5) 23. Notice of the right to claim a lien filed by Hughes Supply Inc #7528, recorded September 13, 2006, as Doc. No. 2006-256-08380. 24. Easement for a right of way for an electric transmission and distribution line granted to Flathead Electric Cooperative, Inc., recorded October 12, 2006 Doc. No. 2006-285-08550. (Tract 5) NOTE; The foregoing numbered exceptions (1-4 and 6) may be eliminated in an ALTA Extended or EAGLE Coverage Policy. Form No. 1068-2 Commitment No.: 180184-FT Plain Language Commitment Page 8 of 11 Exhibit "A" Real property in the County of Flathead, State of Montana, described as follows: FIVE TRACTS OF LAND, SITUATED, LYING, AND BEING IN THE NORTH HALF OF THE NORTHWEST QUARTER OF SECTION 20, TOWNSHIP 28 NORTH, RANGE 21 WEST, P.M.M., FLATHEAD COUNTY, MONTANA, AND MORE PARTICULARLY DESCRIBED AS FOLLOWS TO WIT: A PORTION OF LOT 2 OF BLOCK 1 OF AIRPORT ADDITION TO KALISPELL, A SUBDIVISION RECORDS OF FLATHEAD COUNTY, MONTANA; COMMENCING AT THE SOUTHEAST CORNER OF SAID LOT 2; THENCE S56044'00"W A DISTANCE OF 42.60 FEET TO A POINT, SAID POINT BEING THE TRUE POINT OF BEGINNING OF THE TRACT OF LAND HEREIN DESCRIBED; THENCE CONTINUING S56044'00"W A DISTANCE OF 107.54 FEET TO A POINT BEING THE SOUTHWEST CORNER OF SAID LOT 2; THENCE N32049'28"W A DISTANCE OF 149.96 FEET TO A POINT BEING THE NORTHWEST CORNER OF SAID LOT 2; THENCE N56043'33"E A DISTANCE OF 149.17 FEET TO A POINT ON THE WEST RIGHT OF WAY OF U.S. HIGHWAY NO. 93 BEING THE NORTHEAST CORNER OF SAID LOT 2; THENCE S33011'38"E A DISTANCE OF 84.97 FEET ALONG SAID RIGHT OF WAY TO A POINT; THENCE LEAVING SAID RIGHT OF WAY S56044'00"W A DISTANCE OF 42.60 FEET TO A POINT; THENCE S33011'38"E A DISTANCE OF 65.00 FEET TO THE POINT OF BEGINNING. mjj���� ge We TRACT2: +:• r •'r' f ,i • r TRACT 3: Form No. 1068-2 Commitment No.: 180184-FT Plain language Commitment Page 9 of 11 THENCE N33016'13"W A DISTANCE OF POINT ON THE NORTHBOUNDARY OF SAID / EXHIBIT; THENCE N56-47'26"E • DISTANCE OF 73.33 FEET TO THE POINT ABOVETHE rf LEGAL DESCRIPTION O• LEASE PURPOSESAND CANNOT :a DOCUMENTSUSED ON TRACT 4: BEGINNING AT THE SOUTHWEST CORNER OF TRACT 1 AS SHOWN AND DESCRIBED ON CERTIFICATE OF SURVEY NO. 17045, RECORDS OF FLATHEAD COUNTY, MONTANA; THENCE S56052'03"W A DISTANCE OF 13.33 FEET TO A POINT; THENCE N33°16'13"W A DISTANCE OF 144.56 FEET TO A POINT; THENCE N56-43-47"E A DISTANCE OF 13.33 FEET TO A POINT ON THE WEST BOUNDARY OF SAID TRACT 1; THENCE S33016'13"W A DISTANCE OF 144.59 FEET TO THE POINT OF BEGINNING. THE ABOVE DESCRIBED LEGAL DESCRIPTION IS FOR LEASE PURPOSES ONLY AND CANNOT BE USED ON DOCUMENTS CONVEYING TITLE. TRACT 5: (FEE SIMPLE) TRACT 1 OF CERTIFICATE OF SURVEY NO. 1704S, A TRACT OF LAND SITUATED, LYING, AND BEING IN THE NORTH HALF OF THE NORTHWEST QUARTER OF SECTION 20, TOWNSHIP 28 NORTH, RANGE 21 WEST, P.M.M., FLATHEAD COUNTY, MONTANA. Form No. 1068-2 Plain Language Commitment CONDITIONS Commitment No.: 180184-Fr Page 10 of 11 1. DEFINITIONS (a)"Mortgage" means mortgage, deed of trust or other security instrument. (b)"Public Records" means title records that give constructive notice of matters affecting the title according to the state law where the land is located. 2. LATER DEFECTS The Exceptions in Schedule B - Section Two may be amended to show any defects, liens or encumbrances that appear for the first time in the public records or are created or attached between the Commitment Date and the date on which all of the Requirements (a) and (c) of Schedule B - Section One are met. We shall have no liability to you because of this amendment. 3. EXISTING DEFECTS If any defects, liens or encumbrances existing at Commitment Date are not shown in Schedule B, we may amend Schedule B to show them. If we do amend Schedule B to show these defects, liens or encumbrances, we shall be liable to you according to Paragraph 4 below unless you knew of this information and did not tell us about it in writing. 4. LIMITATION OF OUR LIABILITY Our only obligation is to issue to you the Policy referred to in this Commitment, when you have met its Requirements. If we have any liability to you for any loss you incur because of an error in this Commitment, our liability will be limited to your actual loss caused by your relying on this Commitment when you acted in good faith to: comply with the Requirements shown in Schedule B - Section One or eliminate with our written consent any Exceptions shown in Schedule B - Section Two. We shall not be liable for more than the Policy Amount shown in Schedule A of this Commitment and our liability is subject to the terms of the Policy form to be issued to you. S. CLAIMS MUST BE BASED ON THIS COMMITMENT Any claim, whether or not based on negligence, which you may have against us concerning the title to the land must be based on this commitment and is subject to its terms. Form No, 1068-2 Commitment No.: 180184-FT Plain Language Commitment Page 11 of 11 p, AM 111- 11 120 First Ave. West/P.O. Box 188, Kalispell, MT 59901 Phone (406)755-5028 - Fax (406)755-3299 PRIVACY POLICY We Are Committed to Safeguarding Customer Information In order to better serve your needs now and in the future, we may ask you to provide us with certain information. We understand that you may be concerned about what we will do with such information. — particularly any personal or financial information. We agr`:ee that you have a right to know how we will utilize the personal information you provide to us. Therefore, together with our parent company, The First American Corporation, we have adopted this Privacy Policy to govern the use and handling of your personal information. Applicability This Privacy Policy governs our use of the information which you provide to us. It does not govern the manner in which we may use information we have obtained from any other source, such as information obtained from a public record or from another person or entity. First American has also adopted broader guidelines that govern our use of personal information regardless of its source. First American calls these guidelines its Fairinformation Values, a copy of which can be found on our website at www.firstam.com. Types of Information Depending upon which of our services you are utilizing, the types of nonpublic personal information that we may collect include: ® Information we receive from you on applications, forms and in other communications to us, whether In writing, In person, by telephone or any other means; a Information about your transactions with us, our affiliated companies, or others; and ® Information we receive from a consumer reporting agency. Use of Information We request information from you for our own legitimate business purposes and not for the benefit of any nonaffiliated party. Therefore, we will not release your information to nonaffiliated parties except: (1) as necessary for us to provide the product or service you have requested of us; or (2) as permitted by law. We may, however,, store such information indefinitely, including the period after which any customer relationship has ceased. Such information may be used for any internal purpose, such as quality control efforts or customer analysis. We may also provide all of the types of nonpublic personal information listed above to one or more of our affiliated companies. Such affiliated companies include financial service providers, such as title insurers, property and casualty insurers, and trust and investment advisory companies, or companies involved in real estate services, such as appraisal companies, home warranty companies, and escrow companies. Furthermore, we may also provide all the information we collect, as desc',ribed above, to companies that perform marketing services on our behalf, on behalf of our affiliated companies, or to other financial institutions with whom we or our affiliated companies have joint marketing agreements. Forster Customers Even;, if you are no longer our customer, our Privacy Policy will continue to apply to you. Confidentiality and Security We will use our best efforts to ensure that no unauthorized parties have access to any of your information. We restrict access to nonpublic personal information about you to those individuals and entities who need to know that information to provide products or services to you. We will use our best efforts to train and oversee our employees and agents to ensure that your information will be handled responsibly and in accordance with this Privacy Policy and First American's Fairinformation Values. We currently maintain physical, electronic, and procedural safeguards that comply with federal regulations to guard your nonpublic personal information. © 2001 The First American Corporation a All Rights Reserved AND WHEN RECORDED MAIL TO: Kalispell Hotel, LLC P 0 Box 1068 Kalispell, MT 59922 Filed for Record at Request of: Space Above This Line for Recorder's Use Only Flathead County Title Company Order No.; 180184-FT Parcel No.: 75-EO31050 FOR VALUE RECEIVED, City Of Kalispell hereinafter called Grantor(s), do(es) hereby grant, bargain, sell and convey unto Kalispell Hotel, LLC Whose address is: R O Box 1068, Lake Side, MT 59922 Hereinafter called the Grantee, the following described premises situated in Flathead County, Montana, to -wit: TRACT 1 OF CERTIFICATE OF SURVEY NO. 17045, A TRACT OF LAND SITUATED, LYING, AND BEING IN THE NORTH HALF OF THE NORTHWEST QUARTER OF SECTION 20, TOWNSHIP 28 NORTH, RANGE 21 WEST, P.M.M., FLATHEAD COUNTY, MONTANA. SUBJECT TO covenants, conditions, restrictions, provisions, easements and encumbrances apparent or of record. TO HAVE AND TO HOLD the said premises, with its appurtenances unto the said Grantees and to the Grantee's heirs and assigns forever. And the said Grantor does hereby covenant to and with the said Grantee, that the Grantor is the owner In fee simple of said premises; that said premises are free from all encumbrances except current years taxes, levies, and assessments, and except U.S. Patent reservations, restrictions, easements of record, and easements visible upon the premises, and that Grantor will warrant and defend the same from all lawful claims whatsoever. Page i of 2 City Of Kalispell 41B3: arnes H. Patrick, City Manager Dated: 11/,& /2006 STATE OF Montana ) ss. COUNTY OF WaVRtd This instrument was acknowledged before me on November o49 2006, by ]auras . Patrick, As City Manager of the City of Kalispell. 42 s ®TA = Notary Publi or State of Montana SE A Residing �w My Commission Expires: Page 2 of 2 Form 488 (RTC) Revised 7/06 GcOCODE(S) CONFIDENTIAL TAX DOCUMENT The Information contained in this certificate is confidential by Montana law. Unauthorized disclosure of this information IS a criminal offense. ASSESSMENT CODES) PART 1- DATE OFTRANSFER (SALE) The DeparbnecitofRevenue+aAc1w9ethemmeonowner stvprecords used for the D tazatsan form is assessmar t and of real prop"when this fully and aecuratety compreted and p , 11/29/2006 (MMDOJYYYY) Cgred.(Pteasereaduxattachedinmictiomfor aaahtutaeIncompleting and flAngtNsform.) Montana taw liars form be compretod and mayimpose up to a $500 pamtty for fartury to Me a Roafty Trinshr Crtifcafe 5-7-3W. 305 arrd 3f0, MCA). PART 1 - PARTIES Please complete this section in full, if additional space is required, please attach a separate page. SELLER (Grantor) SSN or FEIN R't Name City of Kalispell Mailing Address 312 1st Avenue East (Permanent) v n Daytime Phone CityKali ST MT Zip 59901 ,�. BUYER (Grantee) SSN or FEiN Name Kalispell Hotel. LLC Mailing Address P O Box 1068 tr� �1 tr (Permanent) Daytime Phone City Lake Side ST MT ;Jr. 59922 Transfer to Trustee, Custodian, or Mailing Address other Representative: a, for Tax Notice Trust FEIN (if different) City ST Zip Minor SSN PART 3 - PROPERTY DESCRIPTION Please corrr�ete fully, if additional space is required, please attach a separate page. Legal DescriptionTract 1 Certificate of Survey 17045 Attachment ❑ N112ofNW114ofS20,T23,R21W Add/Sub Block Lot County Flathead City/Town Kalispell Section 20 Township 28 Range 21w PART 4 -TYPE OF TRANSFER Please complete fifty, more than one may apply. Transfer by Recorded instrument El Sale ❑ Gift ❑ Barter ❑ Part of 1031 or 1033 exchange ❑ Transfer Is subject to a reserved life estate Transfer by Operation of Law ❑ Termination of joint tenancy by ❑ Termination of fife estate by ❑ Court decree ❑ Merger, consolidation, or other death death business entity reorganization PART 5 - EXCEPTIONS FROM PROVIDING SALES PRICE INFORMATIOM Please complete fully, more than one ❑ Gift ❑ Transfer pursuant to court decree ❑ Transfer in contemplation of death without consideration O Tax deed or sheriffs deed ❑ Transfer between husband/wife or pareWchild for nominal ❑ Foreclosure (include trustee transfer under trust Indenture and consideration deed in lieu of foreclosure) ❑ Transfer of property of the estate of a decedent ❑ Berger, consolidation or reorganization of business entity ❑ Transfer to governmental agency ❑ Sate of producing Timber land O Correction, modification, or supplement of Previously recorded O Land eligible for Agricultural Classification (15-7-201, MCA) instrument, no additional consideration O Transfer to a revocable Irving trust ❑ Termination of joint tenancy by death O Purchaser and setter are identical parties ❑ Termination of life estate by death C) Other (specify type) PART 6 - SALE INFORMATION Please complete fully, more than one may apply. Actual Sale Price: $ 1,216,000.00 Was an SiD payoff included in the sale price? OYes WNo Financing: OCash OFHA OVA OContract 00ther Did the buyer assume a SID? ❑Yes ®No Terms: 0 New loan OR ❑ Assumption of wdsting loan Amount of SID paid or assumed: $ 0.00 Value of personal property included in sale $ 0.00 Was a mobile home Included in the safe? ❑Yes 23No Value of Inventory Included in sale $0 Value of license(s) included in sale $0 Value of Good WWI Included in sale $o PART 7 -WATER RIGHT DISCLOSURE (See page 2 for Imporbutt Information about this section) ❑ Seller (Grantor) has water rights on record 0 Seller ( ) does not have water rights ❑ Seller (Grantor) is exempt from this with DNRC and some or all transfer to Buyer on reed write Dt= disclosure requirement Seller (Grantor) signature PART 8 - PREPARER INFORMATION Preparer's signature Is requited NameMile City of Kallsoell (please print) Company ame .tames H. Pa onager Mailing Address 312 1st Avenue East Sigrratu City Kallsoelf ST MT EV 5MI Daytime Ptwn Type of Instrument: ❑ Warranty ❑ Trust Deed Rscording information: ❑ Quit Claim ❑ Interest Document S ❑ Grant O Notice of Purchaser's beer Book Page ❑ Contract For Deed ❑ Statement of AcimaMedgmerd Date ❑ Bargain & Sale Deed ❑ Termination of Joint Tenancy ❑ Decree O Tax Deed Department of Revenue Copy Page 3 Accepting Office: Flathead County Title Company Address: 120 First Ave. West/P.O. Box 188, Kalispell, MT 59901 File No.: 180184-FT INDEMNITY AGREEMENT II (Record Matters) THIS INDEMNITY AGREEMENT (this "Agreement") is made and entered into this Twenty-ninth day of November, 2006, by City of Kalispell (individually and collectively, the "Indemnitor"), in favor of FIRST AMERICAN TITLE INSURANCE COMPANY, a California corporation and its agents and employees (collectively "First American"). RECITALS: A. Indemnitor is the owner of, and/or has, either directly or indirectly, an interest in, the Property or in a transaction involving the Property. B. An examination of the appropriate public records applicable to the Property has disclosed the Record Matters. C. In connection with a contemplated transaction involving the Property, First American has been requested to issue one or more Title Policies in respect to the Property insuring against loss by reason of the Record Matters. D. In connection with future transactions, First American may issue one or more Title Policies insuring against the Record Matters and if First American, at its sole discretion, elects to so issue a Title Policy for the Property, it will do so in material reliance on each of the covenants, agreements, representations and warranties of Indemnitor set forth in this Agreement. NOW, THEREFORE, the parties hereto agree as follows: 1. DEFINITIONS: As used herein, the following terms shall have the following meanings: TERM: DEFINITION: Effective Date: The date this Agreement becomes effective in accordance with Paragraph 3 below. Record Matters The matter(s) of record existing against the Property as described in Part II of Exhibit A attached hereto and incorporated herein by reference. Policy Date: The date of issuance of a Title Policy for the Property. Property: That certain real property as described in Part I of Exhibit A . State: The state in which the Property is located. Title Policy(ies): Policy or policies of title insurance issued by First American with respect to the Property insuring against loss or damage due to Record Matters. 2. REPRESENTATIONS WARRANTIES AND COVENANTS As of the Effective Date, Indemnitor shall be deemed to represent, warrant and covenant to First American that all information regarding the Record Matters disclosed (either in writing or orally) by Indemnitor to First American is true, correct and complete. All representations, warranties and covenants made by Indemnitor to First American are material to First American's decision to issue a Title Policy for the Property. 3. EFFECTIVE DATE. Delivery of this Agreement by Indemnitor to First American shall not be deemed acceptance of this Agreement by First American or a commitment to issue a Title Policy for the Property. First American has no duty to Indemnitor to accept this Agreement or, in the future, to agree to issue a Title Policy for the Property. Upon acceptance of this Agreement by First American as evidenced by the issuance of a Title Policy, this Agreement shall remain in effect as long as First American has any possible liability under any Title Page 1 c2001 First American Title Insurance Company All Rights Reserved Policy) issued at any time in reliance on this Agreement. First American may rely on this Agreement to issue a Title Policy at any time without notice to or further consent by Indemnitor. 4. MULTIPLE INDEMNITORS. 4.1 Joint and Several. If there is more than one Indemnitor under this Agreement, all of the obligations contained in this Agreement shall be the joint and several obligations of each and every Indemnitor. Each Indemnitor shall be fully liable to First American even if another Indemnitor is not liable for any reason, including the failure of such Indemnitor to execute this Agreement. 4.2 Waiver and Release. First American has the right, in its sole and absolute discretion and without notice to or consent by Indemnitor, to (a) waive any provision of this Agreement as it relates to any Indemnitor, at any time or from time to time, without providing the same or similar waiver for the benefit of any other Indemnitor, and/or (b) release any Indemnitor from any or all obligations under this Agreement at any time or from time to time, without releasing any other Indemnitor. 5. INDEMNIFICATION OBLIGATIONS. 5.1. Indemnity. In addition to any other rights or remedies available to First American, at law or in equity, Indemnitor agrees to pay, protect, defend, indemnify, hold and save harmless First American from and against any and all liabilities, claims of liability, obligations, losses, costs, charges, expenses, causes of action, suits, demands, judgments and damages of any kind or character whatsoever, including, but not limited to, reasonable attorneys' fees and costs (including appellate fees and costs) incurred or sustained by First American, and actual attorneys' fees and costs awarded against First American, directly or indirectly, by reason of, or arising under any Title Policy relating to Record Matters, or in any other action at law or in equity under any theory of recovery (including tort) as a result of the existence of the Record Matters or the issuance of a Title Policy. 5.2. Duty to Notify First American. In the event that (a) Indemnitor is in any manner notified of a claim which" could affect the interests of First American under a Title Policy relating to the Record Matters, or (b) any action is filed at law or in equity or any judicial or non -judicial proceeding (including arbitration) is commenced against the Property relating to Record Matters, Indemnitor agrees to promptly notify First American in writing of such claim, action or proceeding as soon as possible of Indemnitor's acquisition of knowledge thereof but, in no event; later than seven (7) days from receipt of said knowledge. 5.3. Rights and Obligations. Upon the filing of any action at law or in equity or the assertion of any claim, cause of action or judicial or non -judicial proceeding relating to the Record Matters, or at any other time which First American shall, in its opinion, deem it reasonable to protect itself or its insured(s) under a Title Policy, First American shall have the right, but not the obligation, (a) to take such action as First American deems reasonable to protect its interest and that of its insured under any Title Policy, and/or (b) to demand that Indemnitor, at Indernitor's sole cost and expense, promptly do, one or more of the following: (a) Cause a properly executed release of the Record Matters to be filed of record in the proper governmental office. (b) Cause to be recorded with respect to the Record Matters a bond releasing the Property from the effect of the Record Matters, should such bond be available and effective in removing the effect of such Record Matters from the Property as a matter of law. (c) In situations where affirmative legal action or proceedings at law or in equity are necessary to discharge, eliminate, or remove the Record Matters with respect to the Property, Indemnitor shall cause (1) counsel selected by First American to institute such action or proceeding as is necessary to discharge, eliminate or remove the effect of the Record Matters as to the Property; and (2) such counsel to deliver to First American a written representation in a form reasonably satisfactory to First American that such counsel (i) has accepted employment as counsel to commence and vigorously prosecute to conclusion such action or procedure, (ii) will promptly undertake any and all steps reasonably necessary to diligently prosecute such action, and (iii) will keep First American informed as to the status of such action or procedure as reasonably requested by First American, at no cost or expense to First American. Indemnitor may object to First American's choice of counsel for reasonable cause. (d) If an action or proceeding concerning the Record Matters is instituted by a third party, Indemnitor shall cause (1) such action or proceeding to be timely defended and resisted by counsel selected by First American which counsel will protect First American and any and all insured(s) to whom First American may have possible liability as a result of the issuance of a Title Policy; and (2) such counsel to deliver to First American a written representation, in a form reasonably satisfactory to First American to the effect that such counsel (i) has accepted employment as counsel to defend any such action or resist any such proceeding, (ii) will promptly undertake any and all reasonable steps to protect First American and its insured(s), and (iii) will keep First American informed as to the status of such action or proceeding as reasonably Page 2 c2001 First American Title Insurance Company All Rights Reserved requested by First American, at no cost or expense to First American. Indemnitor may object to First American's choice of counsel for reasonable cause. (e) If the payment of a sum of money will discharge, eliminate or remove the effect of the Record Matters as to the Property, Indemnitor shall pay such sum as is sufficient to discharge, eliminate or remove the Record Matters in a manner legally sufficient to effect the release of the Record Matters and shall deliver documents to First American, in a form reasonably satisfactory to First American. (f) Indemnitor shall take such action with respect to the Record Matters as First American shall, in its discretion, authorize Indemnitor in writing to undertake, provided that any such authority shall not be a waiver by First American to require Indemnitor at any time to comply with the foregoing subparagraphs of this Paragraph, within ten (10) days of First American's written revocation of authority to take action other than that under any other subparagraphs of this Paragraph, and demand that Indemnitor comply with any other subparagraphs of this Paragraph. 5.4. Interest. Indemnitor agrees that any sums which might be advanced or incurred by First American pursuant to this Agreement or by its exercise of any rights hereunder shall be repaid by Indemnitor to First American within ten (10) days of Indemnitor's receipt of First American's written demand, together with interest thereon at four percent (4%) above the reference rate as charged by Bank of America as of the date such sum was advanced by First American and continuing until it is repaid in full, but in no event, shall such rate of interest exceed the lesser of: (i) ten percent (10%) per annum, or (ii) the maximum rate permitted by law. S.S. Determination of Coverage. Any determination of coverage by First American shall be conclusive evidence that the matter is within the Title Policy coverage regarding the Record Matters for purposes of this Agreement. If First American accepts the defense of a matter within the Title Policy as to the Record Matters with a reservation of rights, all costs, damages, expenses and legal fees incurred by First American shall be deemed within the terms and obligations of Indemnitor under this Agreement even if the matter is subsequently determined by a court to not be within the Title Policy as to the Record Matters. 6. REMEDIES. Indemnitor specifically acknowledges that upon any default by any Indemnitor under this Agreement after demand by First American, First American shall have the right to exercise any or all remedies available at law, in equity or under this Agreement against any and all of the Indemnitors, including, but not limited to, injunctive relief, specific performance, damages, self-help and/or resort to any collateral held by First American to secure the obligations of Indemnitor under this Agreement. 7. SUBROGATION AND SUBORDINATION. Indemnitor hereby unconditionally grants to First American any and all rights of subrogation Indemnitor may have with respect to the Record Matters and agrees to promptly execute any documents with respect to the Record Matters or any other matter relating to this Agreement requested by First American with respect to such right of subrogation and to deliver same to First American. Indemnitor hereby subordinates any and all debts owed to any Indemnitor from any other Indemnitor to the obligations owed to First American under this Agreement. 8. FINANCIAL INFORMATION. Each Indemnitor represents and warrants to First American as of the date of delivery of the financial statements that the statements delivered to First American with respect to that Indemnitor: (a) were prepared in accordance with generally accepted accounting principles ("GAAP") unless otherwise noted therein; (b) are true, complete and correct in all material respects; (c) disclose all material financial information regarding Indemnitor; (d) fairly represent and present the financial condition and operations of Indemnitor; (e) if said statements were not prepared in accordance with GAAP, no GAAP statements and/or audited financial statements exist; and (f) since the date of the financial statements delivered to First American, there `has been no material adverse change in the financial condition, operation, assets, liabilities, properties or business prospects of Indemnitor. Each Indemnitor agrees to promptly notify (but in no event later than ten (10) days after Indemnitor learns, by any means, of such event) First American in writing of any event which would reasonably be anticipated to, or which; in any event, would materially alter or in any material respect change said financial condition, operations, assets,, liabilities, properties or business prospects. Upon request by First American, each Indemnitor further agrees to deliver to First American current financial statements and that by delivery of same, such Indemnitor shall be deemed to make all the same representations and warranties as the new financial statements as set forth herein; above except as otherwise disclosed in writing to First American concurrently with the delivery of the financial statements. Each Indemnitor hereby specifically grants to First American and its agents, representatives, and professionals, the right, at any time and from time to time, at the sole cost and expense of Indemnitor, to (a) examine the books, accounts, records and property of Indemnitor pertaining to the financial condition of Indemnitor, (b) furnish to First American for examination and copying all such books, accounts, records and other pertinent information, and/or (c) provide such further assurances as may be reasonably Page 3 c2001 First American Title Insurance Company All Rights Reserved demanded by First American. In the event of more than one Indemnitor, each Indemnitor shall independently comply with this paragraph. 9. WAIVERS AND COVENANTS. In the event that Indemnitor is indemnifying First American with respect to a Property which is not directly owned by Indemnitor, Indemnitor understands and agrees that First American has no obligation to secure an indemnity from the owner(s) of the Property ("Owner"). Indemnitor agrees that the validity of this Agreement and the obligations of Indemnitor hereunder shall in no way be terminated, affected, limited or impaired by reason of (a) the assertion by First American of any rights or remedies which it may have under any other indemnity agreement or against any person or entity obligated thereunder or against the Owner, (b) First American's failure to exercise, or delay in exercising, any such right or remedy or any right or remedy First American may have hereunder or in respect to this Agreement, (c) the commencement of a case under the Bankruptcy Code by or against the Owner or any person or entity obligated under the law or any other indemnity agreement, or (d) Indemnitor owning less than the entire interest in the Property. Indemnitor further covenants that this Agreement shall remain and continue in full force and effect as to any Title Policies issued at any time by First American with respect to the Property and that First American shall not be under a duty to protect, secure, insure, or enforce any rights it may have under any indemnity agreement or any other right against any third party,; and that other indulgences or forbearance may be granted under any or all of such documents, all of which may be made, done or suffered without notice to, or further consent of, Indemnitor. First American may, at its option, proceed directly and at once, without notice, against any Indemnitor to collect and recover the full amount of the liability hereunder or any portion thereof, without proceeding against the Owner or any other person or entity. Indemnitor hereby waives and relinquishes (a) any right or claim of right to cause a marshalling of any Indemnitor's assets; (b) all rights and remedies accorded by applicable law to indemnitors or guarantors, except any rights of subrogation which Indemnitor may have, provided that the assurances and obligations provided for hereunder shall not be contingent upon the existence of any such rights of subrogation; (c) notice of acceptance hereof and of any action taken or omitted in reliance hereon; (d) presentment for payment, demand of payment, protest or notice of nonpayment or failure to perform or observe, or other proof, or notice of demand; (e) any defense based upon an election of remedies by First American, including without limitation an election to proceed in a manner which has impaired, eliminated or otherwise destroyed Indemnitor's rights of subrogation and reimbursement, if any, against the Owner or any third party; (f) any defense based upon any statute or rule of law which provides that the obligation of a surety must be neither larger in amount nor in other respects more burdensome than that of the principal; (g) the defense of the statute of limitations in any action hereunder or in any action for the collection or performance of any obligations covered by this Agreement; (h) and any duty on the part of First American to disclose to Indemnitor any facts First American may now or hereafter know about the Owner, since Indemnitor acknowledges that Indemnitor is fully responsible for being and keeping informed of the financial condition of the Owner and of all circumstances bearing on the risk of nonperformance of any obligations covered by this Agreement. 10. NOTICE. Any notices, demands or communications under this Agreement between Indemnitor and First American shall be in writing, shall include a reasonable identification of the Property together with First American's order number, and may be given either by personal service, by overnight delivery, or by mailing via United States mail, certified mail, postage prepaid, return receipt requested, addressed to each party as set forth on the signature page of this Agreement. If the address for First American is not completed on the signature page, notice to First American shall be given to First American's State office. All notices given in accordance with the requirements in this Paragraph shall be deemed to be received as of the earlier of actual receipt by the addressee thereof or the expiration of ninety-six (96) hours after depositing same in the United States Postal 11. MISCELLANEOUS. 11.1. No Waiver. No delay or omission by First American in exercising any right or power under this Agreement shall impair any such right or power or be construed to be a waiver thereof. A waiver by First American of a breach of any of the covenants, agreements, restrictions, obligations or conditions of this Agreement to be performed by the Indemnitor shall not be construed as a waiver of any succeeding breach of the same or other covenants, agreements, restrictions, obligations or conditions under this Agreement. Furthermore, in order to be effective, any waiver must be in writing executed by First American. 11.2. No Third Party Beneficiaries. This Agreement is only between Indemnitor and First American, and is notintended to be, nor shall it be construed as being, for the benefit of any third party. 11'.3. Partial Invalidity. If any term, provision, condition or covenant of this Agreement or the application thereof to any party or circumstance shall, to any extent, be held invalid or unenforceable, the remainder of this Agreement, or the application of such term, provision, condition or covenant to persons or circumstances other Page 4 c2001 First American Title Insurance Company All Rights Reserved than those as to whom or which it is held invalid or unenforceable, shall not be affected thereby, and each term and provision of this Agreement shall be valid and enforceable to the fullest extent permitted by law. 11.4. Modification or Amendment. Any alteration, change, modification or amendment of this Agreement or any documents incorporated herein, in order to become effective, shall be made by written instrument executed by all parties hereto. 11.5. Execution in Counterpart. This Agreement and any modification, amendment or supplement to this Agreement may be executed by Indemnitor in several counterparts, and as so executed, shall constitute one Agreement binding on all Indemnitors, notwithstanding that all Indemnitors are not signatories to the original or the same counterpart. 11.6. Qualification; Authority Each individual executing this Agreement on behalf of an Indemnitor which= is an entity, represents, warrants and covenants to First American that (a) such entity is duly formed and authorized to do business in the State, (b) such person is duly authorized to execute and deliver this Agreement on behalf of such entity in accordance with authority granted under the organizational documents of such entity, and (c) such entity is bound under the terms of this Agreement. 11.7. Merger of Prior Agreements and Understandings. This Agreement and other documents incorporated herein by reference contain the entire understanding and agreement between the parties relating to the obligations of the parties with respect to the Record Matters for future transactions involving the Property and all prior or contemporaneous agreements, understandings, representations and statements, oral or written, shall be of no force or effect. 11.8. Miscellaneous. This Agreement shall be construed according to its fair meaning as if prepared by all parties to this Agreement. This Agreement shall be interpreted in accordance with the laws of the State as to a particular property and Indemnitor hereby agrees to submit to the jurisdiction of any state or federal court of First American's choosing having competent jurisdiction, and to make no objection to venue therein should any action at law or in equity be necessary to enforce or interpret this Agreement. If any action at law or in equity is necessary to enforce or interpret the terms of this Agreement, the prevailing party in such action shall be entitled to have and to recover from the other party its reasonable attorneys' fees and other reasonable expenses in connection with such action or proceeding in addition to its recoverable court costs. Titles and captions are for convenience only and shall not constitute a portion of this Agreement. The recitals set forth hereinabove are incorporated into this Agreement. As used in this Agreement, masculine, feminine or neuter gender and the singular or plural number shall each be deemed to include the others wherever and whenever the context so dictates. This Agreement shall inure to the benefit of and bind the personal representatives, successors and assigns of the parties hereto. 12. SECURITY. Indemnitor has or will provide security for this Agreement to First American as follows: [ X ` ] None at this time [ ] Letter of Credit Agreement with Sight Draft Form ] Security Agreement* (Non Cash) [ ] Control Agreement ] Security Agreement* (Cash) [ ] Deed of Trust ] Security Agreement* (Letter of Credit) [ ] Mortgage * Requires a UCC Financing Statement to be executed and filed. A ;breach by an obligor, pledgor or debtor under any of the foregoing documents as well as any documents which, may be referenced in such documents shall be deemed a breach by Indemnitor under this Agreement. Unless otherwise agreed in writing, any sums held by First American as security may be held by First American in its general accounts and not deposited into an interest bearing account. Indemnitor understands that as a result of maintaining its accounts with a financial institution and its on -going banking relationship with the specific financial institution, First American may receive certain financial benefits such as an array of bank services, accommodations, loans or other business transactions from the financial institution ("collateral benefits"). Indemnitor agrees that any and all such collateral benefits shall belong solely to First American and First American shall have no obligation to account to Indemnitor for the value of any such collateral benefits. If the fundsare deposited into a special interest bearing account, all such interest shall be added to and retained in the account as part of the security for First American. Any such interest earned shall be attributed for tax purposes to the' Indemnitor depositing same. (Note: If security is to be taken, additional forms must be executed. Please be advised that additional documents may be needed to perfect a personal properly security interest. Please follow directions on said forms as to additional requirements or consult your local underwriter.) Page S c2001 First American Title Insurance Company All Rights Reserved 13. ESTOPPEL. NOTWITHSTANDING ANY POSSIBLE DIFFERENCE IN THE PARITY OF THE PARTIES HERETO, INDEMNITOR UNDERSTANDS THAT FIRST AMERICAN IS UNDERTAKING A RISK SIGNIFICANTL Y GREATER THAN THAT UNDERTAKEN IN THE NORMAL COURSE OF PROVIDING 7ITLE INSURANCE POLICIES AND RELATED SERVICES BY ENTERING INTO THIS AGREEMENT AND ISSUING POLICIES OF TITLE INSURANCE IN RELIANCE ON THIS AGREEMENT, AND, THEREFORE, INDEMNITOR HEREBY DECLARES ITS WILLINGNESS TO ENTER INTO THIS AGREEMENT AND TO INDUCE FIRST AMERICAN TO ACCEPT THIS AGREEMENT, REALIZING THAT INDEMNITOR'S BEST INTEREST, IN THE OPINION OF INDEMNITOR, IS BEING SERVED THEREBY. NOTICE: THIS AGREEMENT CONTAINS i 1 PERSONALLY OBLIGATE INDEMNITOR. STRONGLY IT 'IS i' !' THAT INDEMNITOR CONSULT LEGALCOUNSEL PRIOR AGREEMENT. INDEMNITOR,: By: Ja s H. Patrick, City Manager i All persons/entities executing this Agreement shall be deemed named parties to this Agreement as if their name also appeared in the introductory paragraph on page 1. Social Security or Tax ID No. Notice Address: ,3;;Id, -/St Av(fnUe EASf J r-5 pe i m Social Security or Tax ID No. Notice Address: ADDRESS FOR NOTICE TO FIRST AMERICAN: (If this information is not completed, please see Paragraph 10.) Notice Address: 120 First Ave. West/P.O. Box 188 Kalispell, MT 59901 Notice Address: Page 6 c2001 First American Title Insurance Company All Rights Reserved MIN1136 III 1 11 1 ii� �i 11kif"! i il � 0 : 9 Order No. 180184-FT (REQUIRED) (Both Part -T & -T1 must be completea)' 1:711 Street Address: 1840 US Highway 93 S, Kalispell, Montana 59901 Legal Description: FIVE TRACTS OF LAND, SITUATED, LYING, AND BEING IN THE NORTH HALF OF THE NORTHWEST QUARTER OF SECTION 20, TOWNSHIP 28 NORTH, RANGE 21 WEST, P.M.M., FLATHEAD COUNTY, MONTANA, AND MORE PARTICULARLY DESCRIBED AS FOLLOWS TO WIT: A PORTION OF LOT 2 OF BLOCK 1 OF AIRPORT ADDITION TO KALISPELL, A SUBDIVISION RECORDS OF FLATHEAD COUNTY, MONTANA; COMMENCING AT THE SOUTHEAST CORNER OF SAID LOT 2; THENCE S56044'00"W A DISTANCE OF 42.60 FEET TO A POINT, SAID POINT BEING THE TRUE POINT OF BEGINNING OF THE TRACT OF LAND HEREIN DESCRIBED; THENCE CONTINUING SS6o44'00"W A DISTANCE OF 107.S4 FEET TO A POINT BEING THE SOUTHWEST CORNER OF SAID LOT 2; THENCE N32049'28"W A DISTANCE OF 149.96 FEET TO A POINT BEING THE NORTHWEST CORNER OF SAID LOT 2; THENCE N56043'33"E A DISTANCE OF 149.17 FEET TO A POINT ON THE WEST RIGHT OF WAY OFHIGHWAY NO. 93 BEING THE NORTHEAST CORNER OF SAID LOT 2; THENCE S33011'38"E A DISTANCE OF 84.97 FEET ALONG SAID RIGHT OF WAY TO A POINT; THENCE LEAVING SAID RIGHT OF WAY S5604400W A DISTANCE OF 42.60 FEET TO A POINT; THENCE S33011'38"E A DISTANCE OF 65.00 FEET TO THE POINT OF BEGINNING. THE ABOVE DESCRIBED LEGAL DESCRIPTION IS FOR LEASE PURPOSES ONLY AND CANNOT BE USED ON DOCUMENTS CONVEYING TITLE. Id Page 7 c2001 First American Title Insurance Company All Rights Reserved BEGINNING AT THE SOUTHWEST CORNER OF LOT 2 OF BLOCK 1 OF AIRPORT ADDITION TO KALISPELL, A SUBDIVISION RECORDS OF FLATHEAD COUNTY, MONTANA; THENCE S56046'53"W A DISTANCE OF 149.99 FEET TO A POINT BEING THE NORTHEAST CORNER OF A TRACT OF LAND AS SHOWN AND DESCRIBED ON DEED EXHIBIT BOOK 507, PAGE 117, RECORDS OF FLATHEAD COUNTY, MONTANA; THENCE S56047'26"W A DISTANCE OF 73.33 FEET ALONG THE NORTH BOUNDARY OF SAID DEED EXHIBIT TO A POINT; THENCE N33016'13"W A DISTANCE OF 149.72 FEET!TO A POINT ON THE SOUTH BOUNDARY OF LOT 1A OF THE RESUBDIVISION OF LOT 1, BLOCK 1 OF AIRPORT ADDITION TO KALISPELL, A SUBDIVISION RECORDS OF FLATHEAD COUNTY, MONTANA; THENCE N56043'33"E A DISTANCE OF 224.48 FEET TO A POINT BEING THE NORTHWEST CORNER OF LOT 2 OF BLOCK 1 OF AIRPORT ADDITION TO KALISPELL, A SUBDIVISION RECORDS OF FLATHEAD COUNTY, MONTANA; THENCE S32049'28"E A DISTANCE OF 149.96 FEET TO THE POINT OF BEGINNING. THE ABOVE DESCRIBED LEGAL DESCRIPTION IS FOR LEASE PURPOSES ONLY AND CANNOT BE USED ON DOCUMENTS CONVEYING TITLE. TRACT 3: COMMENCING AT THE SOUTHWEST CORNER OF LOT 2 OF BLOCK 1 OF AIRPORT ADDITION TO KALISPELL, A SUBDIVISION RECORDS OF FLATHEAD COUNTY, MONTANA; THENCE S56146'53"W A DISTANCE OF 149.99 FEET TO A POINT BEING THE NORTHEAST CORNER OF A TRACT OF LAND AS SHOWN AND DESCRIBED ON DEED EXHIBIT BOOK 507, PAGE117, RECORDS OF FLATHEAD COUNTY, MONTANA, BEING THE TRUE POINT OF BEGINNING OF THE TRACT OF LAND HEREIN DESCRIBED; THENCE S33016'13"E A DISTANCE OF 278.38 FEET ALONG THE EAST BOUNDARY OF SAID DEED EXHIBIT TO A POINT; THENCE S56043'46"W A DISTANCE OF 13.33 FEET TO A POINT; THENCE N3300'13"W A DISTANCE OF 205.69 FEET TO A POINT; THENCE S56047'24" W A DISTANCE OF 60.00 FEET TO A POINT; THENCE N33016'13"W A DISTANCE OF 72.71 FEET TO A POINT ON THE NORTH BOUNDARY OF SAID DEED EXHIBIT; THENCE N56047'26"E A DISTANCE OF 73.33 FEET TO THE POINT OF BEGINNING. TAE ABOVEDESCRIBED DESCRIPTION IS F• . LEASE PURPOSES r CANNOT BE USED • DOCUMENTS CONVEYING SOUTHWESTBEGINNING AT THE !• OF TRACT 1 AS SHOWNAND DESCRIBED • CERTIFICATE OF SURVEY NO. 17045, RECORDS OF ,r COUNTY,MONTANA; S56092'03"W A DISTANCE OF 13.33 FEET TO A POINT; THENCE N33016'13"W A DISTANCE OF 144.$6 FEET TO A POINT; THENCE N5604347"E A DISTANCE OF 13.33 FEET TO A POINT ON THE WEST BOUNDARY OF SAID TRACT 1; THENCE S33016'13"WDISTANCE OF 144.59 FEET TO THi POINT OF BEGINNING. YAE ABOVE DESCRIBED LEGAL DESCRIPTION IS FOR LEASE PURPOSES ONLY AND CANNOT BE USED ON DOCUMENTS ! TRACT 5: (FEE SIMPLE) TRACT 1 OF CERTIFICATEOF SURVEY NO. 17045,OF LAND SITUATED, LYING, y • BEING IN THE NORTH HALF OF TH FLATHEAD COUNTY,• 1 i. • ' r Page 8 c2001 First American Title Insurance Company All Rights Reserved Deed of Trust filed November 6th, 2006 as Instrument # 200631009350, and Financing Statement Filed on November 16, 2006, as Instrument No. 32008260, affecting a portion of Tracts 1-4 of the Leasehold Tracts as described on Schedule A of Commitment 180184, and as shown on Lenders Ploicy under Commitment 180184. Page 9 c2001 First American Title Insurance Company All Rights Reserved This Certificate is made and entered into this r day of November, 2006, by the CITY OF KALISPELL ("Landlord") to INTERVEST-MORT AGE INVESTMENT COMPANY ("Bank"), RECITALS A. Landlord is the owner and lessor of real property legally described on Exhibit "A" attached hereto (the "Property"). B. Landlord is the owner, and Kalispell Hotel, LLC, a Montana limited liability company, previously identified as Kalispell Hotel , LLC (the "Tenant"), is the current lessee under `\��� that certain Lease of the Property dated July 12, 2006 (hereinafter the "Lease"). C. Bank and Tenant are parties to an executed loan commitment dated October 3 1, 2006, under which Bank has agreed to lend to Tenant the sum of $17,000,000.00 (the "Loan") secured by real property and improvements to be constructed thereon on Tract I of Certificate of Survey No. 17045 in the City of Kalispell, Flathead County, Montana, together with the additional parking located on the Property. D. Landlord acknowledges the request of Bank to confirm the status of the Lease and is delivering this Certificate pursuant to the provisions of the Lease. Landlord certifies to Bank as follows: 1. Consent. Landlord understands and acknowledges that Tenant's leasehold interest in the Property will be encumbered by the lien of a deed of trust in favor of Bank (the 'Deed of Trust") and by an assignment of leases and cash collateral (the "Assignment of Leases") and hereby consents to such encumbrance subject to the interest of Landlord. The Deed of Trust and the Assignment of Leases will secure the payment of a Promissory Note in the original principal amount of $17,000,000.00 (the "Note"). Tenant shall remain liable to Landlord for the full performance of all obligations under the Lease. 2. Estoppel, Landlord hereby represents and warrants to Bank that: (a) The Lease is unmodified and in full force and effect. The Lease constitutes the entire agreement of Landlord and Tenant with respect to the Property and there are no other agreements or understandings, verbal or written, which affect the rights and liabilities of Landlord and Tenant to one another with respect to the Lease and the Property. (b) There is no default under the Lease in payment of rent or in the observance or performance of any other covenant or condition to be observed or performed by Tenant or Landlord thereunder and no other event has occurred which does presently or would with the passage of time, the giving of notice or the expiration of a period of grace constitute a default by either party under the Lease or create a right of termination of the Lease by either party. ,TuLy (c) The Lease term commenced Noy er , 2006. The term of the Lease terminates on N�oyctfiber J�2105. V C:%Rlntery a 81312\K\W6,pe11 Hote19781FwLslEst Ccn.wpd (d) The annual rental under the Lease is currently $10,116.00 payable on the first day of July of each year. The annual rent will be adjusted in accordance with the terms of Article V C of the Lease. (e) Landlord has no knowledge of any prior or other assignment or of any prior hypothecation or pledge of Tenant's interest under the Lease, except as noted in the real property records of Flathead County. 3. Acknowledgment of Restriction. Landlord acknowledges that the terms of the Loan Documents restrict the right of the Tenant to modify, amend, terminate, cancel, surrender or supersede its obligations under the Lease without the express prior written approval of Bank, and Landlord agrees that no such change will be made to the Lease without prior notice to Bank. 4. Default by Tenant. In the event of a default by Tenant under the Lease, Landlord agrees to promptly deliver written notice to Bank setting forth the nature and extent of the default. Bank shall have the right (but without the obligation to do so) within thirty (30) days of receipt of notice to cure the default in the same manner as Tenant. In the event Bank is required to commence foreclosure of its Deed of Trust, such action by Bank will not constitute a default under the Lease so long as (i) Bank continues to timely perform Tenant's obligations under the Lease, and (ii) Bank diligently pursues its foreclosure action. Landlord acknowledges that a foreclosure action could result in a temporary disruption in the operation of the premises and that any such disruption will not cause Landlord to terminate the Lease. In the event Bank completes its foreclosure action, Landlord agrees to consent to assignment of the Lease (pursuant to Article IX of the Lease) to Bank and/or to a qualified purchaser of the premises following foreclosure. 5. Notices. Notices to Bank shall be delivered personally or by reputable overnight courier service (such as Federal Express) to the following address (or to such other address or addresses as Bank may from time to time designate in writing) and shall be effective only upon receipt: Sterling Savings Bank c/o Intervest-Mortgage Investment Company Attn: David Clay 5005 S.W. Meadows Road, Suite 400 Lake Oswego, Oregon 97035 6, New Lease. If the Lease terminates for any reason, including rejection in connection with a bankruptcy proceeding by Tenant or a trustee in bankruptcy for Tenant, Landlord shall provide Bank with written notice that the Lease has been terminated, together with a statement of all sums that would at the time be due under the Lease but for such termination and of all other defaults, if any, then known to Landlord. If, in its sole discretion, Bank shall cure all defaults, then Landlord will enter into a new lease (the "New Lease") of the Property with Bank for the remainder of the term of the Lease, effective as of the date of termination, at the rent, and upon the terms, covenants and conditions of the Lease. If the Lease terminates because of Tenant's bankruptcy, Bank shalt be required to cure only the existing monetary defaults prior to execution of the New Lease, 7. Environmental Remediation. Landlord is obligated to remediate the environmental contamination at the Property as required by Montana Department of Environmental Quality and pursuant to the Planned Unit Development Agreement dated May 16, 2006 between Landlord and Tenant. Landlord hereby agrees to indemnify and hold Bank harmless from any and all claims, demands, damages, losses, liens, liabilities, penalties, fines, lawsuits and other proceedings and costs and expenses (including attorneys' fees), arising directly or indirectlyfrom Landlord's environmental C:Wmer t 81312WKAh"ll Hotel 978U'inalsT-si Urt.wN 2 remediation obligations set forth herein. 8. Governing Law, This Certificate shall be governed and construed in accordance with the laws of the State of Montana. The proper venue for any action arising under this Certificate is the District Court in and for the County of Flathead, State of Montana. IN WITNESS WHEREOF, this Certificate is executed as of the day and year first above written. LANDLORD: CITY OF KALISPELL Its r '-t G Y ate, s (?e—tL State of i'nW a--) ) ss. County of-- ) I certify that I know or have satisfactory evidence that personally appeared before me, and o th .stat that he/she was authorized to execute the instrument and acknowledged it, as �C=M9,-6f City of Kalispell, to be the free and voluntary act of such entity, for the uses and purposes ntioned in the instrument. DATED: 7-E GF GAJUntervr t 8131ZMKa16-peJ) HoW 978\Fu aU\Est Ccn.wpd Iil• PrintNam : -�r� NOTAR UBLIC in and of i'��6 -.residing at My appointment expires:_ 11 G Real property in the County of Flathead, State of Montana, described as follows: Four tracts of land, situated, lying and being in the North half of the Northwest quarter of Section 20, Township 28 North, Range 21 West, P.M.M., Flathead County, Montana, and more particularly described as following to wit: Tract 1: A portion of Lot 2 of Block 1 of Airport Addition to Kalispell, a subdivision records of Flathead County, Montana; commencing at the Southeast corner of said Lot 2; thence S:5644'00"W a distance of 42.60 feet to a point, said point being the true point of beginning of the tract of land herein described; thence continuing S56 °44'00"W a distance of 107.54 feet to a point being the Southwest corner of said Lot 2; thence N32°49'28"W a distance of 149.96 feet to a point being the Northwest corner of said Lot 2; thence N56°43'33"E a distance of 149.17 feet to a point on the West right of way of U.S. Highway No. 93 being the Northeast corner of said Lot 2; thence S33 ° 11'38"E a distance of 84.97 feet along said right of way to a point; thence leaving said right of way S56 °44'00"W a distance of 42.60 feet to a point; thence S33 ° 11'38"E a distance of 65,00 feet to the point of beginning. Tract 2: Beginning at the Southwest corner of Lot 2 of Block lof Airport Addition to Kalispell, a subdivision records of Flathead County, Montana; thence S56 °46'53 "W a distance of 149.99 feet to a point being the Northeast corner of a tract of land as shown and described on Deed Exhibit: Book 507, Page 117, records of Flathead County, Montana; thence S56 °47'26"W a distance of 73.33 feet along the North boundary of said Deed Exhibit to a point; thence N33 ° 16'13"W a distance of 149.72 feet to a point on the South boundary of Lot I of the resubdivision of Lot 1, Block 1 of Airport Addition to Kalispell, a subdivision records of Flathead County, Montana; thence N56 °43'33"E a distance of 224.48 feet to a point being the Northwest corner of Lot 2 of Block 1 of Airport Addition to Kalispell, a subdivision records of Flathead County, Montana; thence S32 °49'28"E a distance of 149.96 feet to the point of beginning. Tract 3: Commencing at the Southwest corner of Lot 2 of Block 1 of Airport Addition to Kalispell, a subdivision records of Flathead County, Montana; thence S56 °46'53"W a distance of 149.99 feet to a point being the Northeast corner of a tract of land as shown and described on Deed Exhibit Book 507, Page 117, records of Flathead County, Montana, being the true point of beginning of the tract of land herein described; thence S33 ° 16' 13"E a distance of 278.38 feet along the East boundary of said Deed Exhibit to a point; thence S56 °43'46"W a distance of 13.33 feet to a point; thence N33 ° 16' 13"W a distance of 205.69 feet to a point; thence S56 °47'24"W a distance of 60.00 feet to a point; thence N33 ° 16' 13 "W a distance of 72.71 feet to a point on the North boundary of said Deed Exhibit; thence N56°47'26"E a distance of 73.33 feet to the point of beginning. Tract 4: Beginning at the Southwest corner of Tract 1 as shown and described on Certificate of Survey No. 17045, records of Flathead County, Montana; thence S56°52'03"W a distance of 13.33 feet to a point; thence N33 ° 16' 13"W a distance of 144.56 feet to a point; thence N56 °43'47"E a distance of 13.33 feet to a point on the West boundary of said Tract 1; thence S33 ° 161 TV a distance of 144.59 feet to the point of beginning. MUNImery t 81312MYWixWl Hotel 978\F ma)AFst Ce l.wpd 4 AGREEMENT TO SELL AND PURCHASE DATED this 1 day of May 2006 at Kalispell, Montana. Kalispell Hotels, LLC, a Montana Limited Liability Company, of P.O. Box 1068, 741 Lakeside Blvd., Lakeside, MT 59922, hereinafter called "BUYER" agrees to purchase, and City of Kalispell, a municipal corporation, of 312 1 st Avenue East, Kalispell, Montana 59901, the undersigned SELLER, agrees to sell the following described real estate hereinafter referred to as "premises" in the City of Kalispell, Flathead County of Montana, legally described as: Tract I of'Certificate of Su.ruey No. 17045, a tract of land, situated, lying, and being in the North Half of the Northwest Quarter of Section 20, TolA nship 28 North, Range 21 hest, P.M.M., Flathead County, Montana. PURCHASE PRICE Total Purchase Price is ONE MILLION TWO HUNDRED SIXTEEN THOUSAND AND NO/100THS ($1,216,000.00) DOLLARS U.S. payable at closing. SPECIAL PROVISIONS Liquor License Contingency = This purchase 'and sale is contingent upon BUYER successsfully obtaining aSull service liquor license for the subject property within the timeframe. set forth for the closing of this transaction. This agreement will terminate and become Trull and void if this contingency is not met. subject to the terms set fortli in the POSSESSION clause of this agreement. CONVEYANCE The SELLER shall convey the real property by Warranty Deed, free of all liens and encumbrances except those described above or those otherwise acceptable to the BUYER as described in the title insurance section of this agreement. TITLE INSURANCE SELLER, at SELLER'S expense, shall furnish BUYER with Title Insurance in the amount equal to the purchase price, committing to insure merchantable title to the real property in the BUYER'S narne, free and clear of all liens and encumbrances except: zoning ordinances, building and use restrictions, reservations in federal patents, beneficial utility easements apparent or of record, easements of record, and any other encumbrances acceptable to BUYER. PURCHASE AND SALE AGREEMENT 1 If the SELLER'S title is not merchantable and cannotbe made merchantable before the stated closing date, 30 ADDITIONAL DAYS SHALL BE ALLOWED FOR THE SELLER TO MAKE SUCH TITLE MERCHANTABLE. Encumbrances to be discharged by the SELLER shall be satisfied prior to closing or from SELLER'S proceeds at time of closing. TAXES AND ASSESSMENTS SELLER and BUYER agree to prorate taxes and. special improvement assessments for the current tax year, if any, as of the date of closing, unless otherwise agreed. CLOSING DATE The date of closing shall be on or before July 1, 2006or sooner if BUYER has completed it financing agreements. 30 ADDITIONAL DAYS SHALL BE ALLOWED FOR THE BUYER TO OBTAIN SUCH AGREEMENTS, IF NECESSARY. The BUYER and SELLER will deposit with the closing agent all instruments and monies necessary to complete the purchase in accordance with this agreement. ADDITIONAL TERMS B UYER S REMEDIES If the Seller accepts the offer contained in this agreement but refuses or neglects to consummate the transaction within the time period provided in this agreement, the BUYER may: (1) Demand that SELLER specifically perform SELLER'S obligations under this agreement; or (2) Demand monetary damages from SELLER for SELLER'S failure to perform the terms of this agreement. SELLER'S REMEDIES If the SELLER accepts the offer contained in this agreement and BUYER refuses orneglects to consummate the transaction within the time period provided in this agreement, the SELLER may: (1) Demand that BUYER specifically perform BUYER'S duties and obligations under this agreement; or (2.) Demand that BUYER pay monetary damages for BUYER'S failure to perform the terms of this agreement. PURCHASE AND SALE AGREEMENT - 2 BUYER'S CERTIFICATION By entering into this agreement, each person or persons executing this agreement as BUYER represents that he/she is eighteen (18) years of age or older, of sound mind, and legally competent to own real property in the State of Montana; and if acting on behalf of a corporation, partnership„ or other nonhuman entity that he/she is duly authorized to enter into the agreement on behalf of such entity. SELLER'S CERTIFICATION By entering into this agreement, each person or persons executing this agreement as SELLER represents that he/she is eighteen (18) years of age or older, of sound mind, and legally competent to own real property in the State of Montana; and if acting on behalf of a corporation, partnership, or other nonhuman entity that he/she is duly authorized to enter into this agreement on behalf of such entity. CONSENT TO DISCLOSE INFORMATION BUYER and SELLER hereby consent to the procurement and disclosure by BUYER, SELLER, and sales representatives and their attorneys, agents; and other parties having interest essential to this agreement, of any and all information reasonably necessary to consummate the transaction described in this agreement, specifically including access to escrows for review of contracts, deeds, trust indentures, or similar documents as prior transactions concerning this property of underlying obligation pertaining thereto. POSSESSION SELLER shall allow BUYER access to the subject property, prior to closing, and shall allow BUYER to proceed with preliminary construction requirements, including demolition of the existing structures. In the event that this Purchase and Sale does not close, for any reason not attributable to the SELLER, and the stn.ictures have been demolished, BUYER agrees that SELLER is entitled to damages from BUYER in the amount of the fair market value of the structures demolished. BUYER agrees to hold SELLER harmless and indemnify SELLER in all respects for any and all damages or injury suffered by any party on the premises upon the date BUYER is given access to the subject property. BUYER agrees to obtain and maintain liability insurance on the subject property in the amount of $1.5 million aggregate and $750,000 per occurrence and name the SELLER as an additional named insured. Otherwise, SELLER shall deliver possession and occupancy to the 13UYER on. the closing date unless otherwise agreed. RISK OF LOSS All loss or damage to any of the above -described real property or personal property by any cause is assumed by SELLER through the time of closing unless otherwise specified. PURCHASE AND SALE AGREEMENT - 3 TIME IS OF THE ESSENCE Time is of the essence in this agreement and all clauses herein. BINDING EFFECT AND NON -ASSIGNABILITY This agreement is binding upon the .heirs, successors, and assigns of each. of the parties hereto; however, BUYER'S rights under this agreement are not assignable without the SELLER'S express written consent. ATTORNEY FEES In any action brought by the BUYER or the SELLER to enforce any of the terms of this agreement, the prevailing party in such action shall be entitled to such reasonable attorney fees as the court or arbitrator shall determine just. B UYER S ACKNOWLEDGEMENT BUYER. acknowledges that he has examined the real and personal property, the BUYER enters into this agreement in full reliance upon his independent investigation and judgment, that prior verbal representations by the SELLER or SELLER'S agents or representatives do not modify of affect this agreement, and that by signing this agreement BUYER acknowledges having read and understood this entire agreement, including the Additional Terms above. B UYER'S COMMITMENT VWe agree to purchase the above -described property on the terms and conditions set forth in the above offer. 1/WE HEREBY ACKNOWLEDGE receipt of a copy of this AGREEMENT TO SELL AND PURCHASE bearing my/our signatures BUYE k_ f bert Voelker for -11 Hotels, LLC. PURCHASE AND SALE AGREEMENT - 4 SELLER'S COMMITMENT Me agree to sell and convey to BUYER the above -described property on the terms and conditions hereinabove stated. I/We acknowledge receipt of a copy of this agreement bearing my/our signatures} and that of the BUYER named above. Dated thisI_ day of �, 206 SELLER: :.Tames H. Patrick, City Manager - PURCHASE AND SALE AGREEMENT - 5 AMENDMENT TO AGREEMENT TO SELL AND PURCHASE DATED this day of November 2006 at Kalispell, Montana. On the day of May 2006, Kalispell Hotel LLC, a Montana Limited Liability Company, of P.O. Box 1068, 741 Lakeside BIvd., Lakeside, MT 59922, hereinafter called "BUYER" entered into an agreement to purchase, and the City of Kalispell, a municipal corporation, of 312 1st Avenue East, Kalispell, Montana 59901, the undersigned SELLER, entered into an agreement to sell the following described real estate hereinafter referred to as "premises" in the City of Kalispell, Flathead County of Montana, legally described as: Tract 1 of Certificate of Survey No. 17045, a tract of land, situated, lying, and being in the North Half of the Northwest Quarter of Section 20, Township 28 North, Range 21 West, P.M.M., Flathead County, Montana. For good and valuable consideration, the receipt of which is hereby acknowledged, the parties agree that the Agreement to Sell and Purchase shall be amended at the Closing Date paragraph such that it shall read as follows: CL OSING DATE The date of closing shall be on or before December 10, 2006 or sooner if BUYER has completed it financing agreements. The BUYER and SELLER will deposit with the closing agent all instruments and monies necessary to complete the purchase in accordance with this agreement. Dated this day of , 2006. Dated this day of yeti-- , 2006. By: Robert Voelker for Kalispell Hotel, LLC SELLER: James H. Patrick, City Manager DATED this day of November 2006 at Kalispell, Montana. On the day of May 2006, Kalispell Hotel, LLC, a Montana Limited Liability Company, of P.O. Box 1068, 741 Lakeside Blvd., Lakeside, MT 59922, hereinafter called 'BUYER" entered into an agreement to purchase, and the City of Kalispell, a municipal corporation, of 312 1st Avenue East, Kalispell, Montana 59901, the undersigned SELLER, entered into an agreement to sell the following described real estate hereinafter referred to as "premises" in the City of Kalispell, Flathead County of Montana, legally described as: Tract I of Certificate of Survey No. 17045, a tract of land, situated, lying, and being in the North Half of the Northwest Quarter of Section 20, Township 28 North, Range 21 West, P.M.M., Flathead County, Montana. For good and valuable consideration, the receipt of which is hereby acknowledged, the parties agree that the Agreement to Sell and Purchase shall be amended at the Closing Date paragraph such that it shall read as follows: CLOSING DATE The date of closing shall be on or before December 10, 2006 or sooner if BUYER has completed it financing agreements. The BUYER and SELLER will deposit with the closing agent all instruments and monies necessary to complete the purchase in accordance with this agreement. Dated this �°( day of Nzr; 2006. Dated this day of 12006. )bert Voelker for ell Hotel, LLC SELLER: By: James H. Patrick, City Manager This Lease Agreement (the "Agreement") entered into as of the 3'Z-'day of July, 2006, by and between the City of Kalispell, a body politic and corporate created by Montana State Statutes ("Lessor"), and Kalispell Hote/LLC, a Montana Limited Liability Company, of P.O___�� Box 1068, 741 Lakeside Blvd., Lakeside, Ml' 59922, ("Lessee"). WITNESSETH. WHEREAS, Lessor now owns, controls, and operates the Kalispell City Airport (the "Airport") and adjacent real property in the City Kalispell, County of Flathead, State of Montana; WHEREAS, Lessee is constructing a hotel and conference center facility adjacent to the Kalispell City Airport and requires parking space that exceeds the amount of land that it owns; and WHEREAS, it is in the best interests of the Lessor to lease a portion of its airport property and adjacent real property to the Lessee for the purposes of fulfilling the Lessee's parking requirements of the hotel and conference facility. NOW, THEREFORE, in consideration of the premises and the mutual covenants contained in this Agreement, the parties hereby agree as follows: ARTICLE I TERM The term of this Agreement shall be for a period of NINETY-NINE (99) years, commencing on the date that Lessee receives its certificate of occupancy from the City of Kalispell, and continuing for ninety-nine years, unless earlier terminated under the provisions of this Agreement. Lessor hereby leases to Lessee, and Lessee hereby leases from Lessor, the following premises comprising 63,223 square feet, described as shown by maps and legal description attached hereto as Exhibit "A" and incorporated fully herein by this refercucc. ARTICLE 1 NIGHTS AND OBLIGATIONS A. Required Services. Lessor hereby grants a leasehold to Lessee in the above -described premises, and Lessee agrees to construct a hotel, conference center and restaurant facility consistent with the plans it submitted and were accepted by the City of Kalispell in the Planned Unit Development Agreement dated May 2006, Lessee further agrees that it and its assigns are bound to continue to operate the hotel, conference center and restaurant facility during the term of the lease and that the lease shall terminate if these services are ever discontinued. B. Wellhead Protection. The City of Kalispell owns and operates a water well site contiguous to the above -described leased premises. The City completed a Source Water Delineation and Assessmcut Program designed to protect a portion of the underground aquifer that provides potable water to the City's five groundwater wells. The program reduces the threat of groundwater contamination by controlling the type of uses that can occur within a 100-foot LEASE OF KALISPELL CITY PROPERTY - Page i of 8 radius of each well (i,e., the CONTROL ZONE). The following is a Iist of uses that the Lessee is not permitted within the CONTROL ZONE. 1. Discharge. Lessee shall discharge, or cause, or permit the discharge of regulated substances to the groundwater or surface water that may have a deleterious ailect on the groundwater in the City, unless the discharge complies with federal, state, and local regulations. 2. Septic Tank Systems. No septic system, wastewater disposal system, sewer pipe, sewage lift station, French drain, or class V injection well, shall be located within the CONTROL ZONE. 3. On -Site Sewage Disposal. Lessee shall not place, maintain, or operate on -site sewage disposal from a septic tank or wastewater treatment plant within the CONTROL ZONF. npon any lot abutting any portion of any public street in which such portion of such street a public sewer is laid. Lessee shall not place, maintain, or operate on -site sewage disposal such as a septic tank system within the CONTROL ZONE. 4, Petroleum Products. Lessee shall not discharge any petroleum product(s), treated or untreated, in the CONTROL ZONE. 5. Underground Storage Tanks. No underground storage tanks used to store regulated substances may be installed in the CONTROL ZONE for any type of purpose. 6. my Wells and/or Storm Water Detention Ponds. Lessee shall not direct the discharge of any regulated substance, directly or indirectly, into the groundwater by the use of a dry well, detention pond, retention pond, or storm water swale. 7. Solid Waste Disposal. It shall be unlawful to place or maintain any solid waste disposal, transfer, or processing facility, or any hazardous material waste disposal, transfer, or processing facility within the CONTROL ZONE, 8. Storage Containers. All regulated substances outside of the CONTROL ZONE shall be stored in suitable containers to reduce the chance fut the substances to be accidentally introduced into the environment. These storage containers shall be product -tight and shall be provided with secondary containment. Defective storage containers shall be removed from service for repair or disposal in accordance with local, state, and federal standards. 9. Secondary Containment. Where secondary containment is required, it shall be constructed of a material of sufficient structural integrity and composition to contain the required capacity of liquids and not be structurally weakened because of contact with the discharge of the regulated substance to be contained. The material shall be free of cracks, joints, gaps, or other imperfections, which would allow leakage through the containment material. This containment can take many forms such as trays under containers, floor curbing or other systems designed to hold materials or liquids that may discharge from containers holding regulated substances. LEASE OF KALISPELL CITY PROPERTY - Page 2 of 8 C. Compliance with Laws, Lessee shall comply with all federal, state and local laws, rules and regulations which may apply to the conduct of the business contemplated, including rules and regulations promnigated by Lessor, and Lessee shall keep in effect and post in a prominent place all necessary and/or required licenses or permits. D. Maintenance and Repair. Lessee shall be responsible for the maintenance and repair of the leased premises and shall keep and maintain the leased premises in good condition, order and repair, and shall surrender the same upon the expiration of this Agreement, in the condition in which they are required to be kept, reasonable wear and tear and damage by the elements not caused by Lessee's negligence excepted. E. Parkins; and Access for Red Eagle Aviation. Until such time as the airport expansion is completcd and the business known as Red Eagle Aviation is movers from its present location next to the subject premises, ten parking spaces within Tract 4 of the leased premises shall be designated as daytime (6:00am to 6:00pm) reserved parking for employee and guest parking of Red Eagle Aviation and used by Red Fagle Aviation for fuel truck access to its leased premises, ARTICLE IV APPURTENANT PRIVILEGES Use of Airport Facilities. Lessee shall be entitled, in common with others authorized, to the use of all facilities and improvements of a public nature which now are or may hereafter be connected with or appurtenant to the Airport, including the use of landing areas, runways, taxiways and aircraft parking areas designated by Lessor. 610 a 111, ieu, P A, Lease Rate. In consideration of the rights and privileges granted by this Agreement, Lessee agrees to pay to Lessor during the first year of the term of this Agreement the sum equal to at least $.16 per square foot per year. B. Payments. The annual lease payment specified above shall be paid annually no later than the 1"' day of July, the first payment, being prorated and paid in advance on the date the certificate of occupancy is issued. C. Lease Ratq Escalation. Each third year, on July i$`, the Lease Rate shall be increased to reflect a three percent annual increase in the lease rate with the annual per square foot rate rounded to the nearest penny. The first Lease Rate Escalation shall occur on July 1, 2009 and shall increase the Lease Rate to (.01748 basis) $.17 per square foot per year. D. Delinquency Charge. A delinquency charge of S% per month shall be added to payments required which are rendered more than ten (10) days delinquent. E. Place of Payment. All payments due Lessor from Lessee shall be delivered to the City of Kalispell at P.O. Box 1997, Kalispell, MT 59903-1997. ARTICLE VI UTILITIES Lessee shall have the right to use the utility service facilities located on the Premises at the commencement of the term of this Agreement. In the event Lessee fails to pay any utility bills when due, Lessor may, at its option, pay the same and collect from Lessee the amounts so disbursed, plus interest at the rate of 1% per month or fraction thereof. LEASE OF KALISPELL CITY PROPERTY - Page 3 of 8 A. Required Insurance. Lessee shall obtain and maintain continuously in effect at all times during the term of this Agreement, at Lessee's sole expense, General Liability coverage on the premises in the minimum amount of $750,000 per occurrence and $1,500,000 aggregate which policy shall name the City of Kalispell as an additional named insured. These minimums shall be adjusted accordingly in the event Montana I.aw is amended to increase the liability limits of local governments. B. Notice. Lessor agrees to notify Lessee in writing as soon as practicable of any claim, demand or action arising out of an occurrence covered hereunder of which Lessor has knowledge, and to cooperate with Lessee in the investigation and defense thereof. ARTICLE VIII INDENMFICATION To the extent not covered by insurance carried in favor of Lessor, Lessee shall keep and hold harmless Lessor from and against any and all claims, demands, suits, judgments, costs and expenses asserted by any person or persons, including agents or employees of Lessor or Lessee, by reason of death or injury to persons or loss or damage to property, resulting from Lessee's operations; or anything donc or omitted by Lessee, under this Agreement except to the extent that such claims, demands, suits, judgments, costs and expenses may be attributed to the acts or omissions of Lessor or its agents or employees. ARTICLE IX ASSIGNMENT This agreement, or any part thereof, may not be assigned, transferred or subleased by Lessee, by process or operation of law or in any other manner whatsoever, without the prior written consent of Lessor, which consent shall not be withheld unreasonably. Notwithstanding any other or inconsistent provision of this Agreement, during the performance of this Agreement, Lessee, for itself, its heirs, personal representatives, successors in interest and assigns, as part of the consideration for this Agreement, does hereby covenant and agree, as a covenant running with the land, that: A. No.person on the grounds of race, color, religion, sex, or national origin shall be excluded from participation in, denied the benefits of, or otherwise be subjected to discrimination in; the use of the Premises. B. In the construction of any improvement on, over or under the Premises, and the furnishing of services therein or thereon, no person on the grounds of race, color, religion, sex or national origin shall be excluded from participation in, denied the benefit of, or otherwise be subjected to discrimination; C. Lessee shall use the Premises in compliance with all other requirements haposed by pursuant to Title 49, Code of Federal Regulations, Department of Transportation, Subtitle A, Office of the Secretary, Part 21, Nondiscrimination in Federally Assisted Programs of the Department of Transportation -Effectuation of Title VI of the Civil Rights Act of 1964, and as said regulations may be amended. LEASE OF KALISPELL CITY PROPERTY - Page 4 of 8 D. In the event of breach of any of the above non-discrimination covenants, Lessor shall have the right to terminate this Agreement and to reenter and repossess the Premises and hold the same as if said Agreement had never been made or issued. This provision does not become effective until the procedures of 49 CFR Part 21 have been followed and completed, including expiration of appeal rights. ARTICLE XI REQUIREMENTS OF THE UNITED STATES This Agreement shall be subject and subordinate to the provisions of any existing or future agreement between Lessor and the United States, or any agency thereof, relative to the operation or maintenance of the Airport, the execution of which has been or may be required as a condition precedent to the expenditure of federal funds for the development or operation of the Airport provided, however, that Lessor shall, to the extent permitted by law, use its best efforts to cause any such agreements to include provisions pmtecting and preserving the rights of Lessee in and to the Premises, and to compensation for the taking thereof, interference therewith and damage thereto, caused by such agreement or by actions of Lessor or the United States pursuant thereto, ARTICLE XII DEFAULT AND TERMINATION A. Termination by Lessee. This Agreement shall be subject to termination by Lessee in the event of anyone or more of the following events: 1. The default by Lessor in the performance of any of the terms, covenants or conditions of this Agreement, and the failure of Lessor to remedy, or undertake to remedy, to Lessee's satisfaction, such default for a period of thirty (30) days after receipt of notice from Lessee to remedy the same. 2. Damage to or destruction of all or a material part of the Premises necessary to the operation of Lessee's business. 3. The lawful assumption by the United States, or any authorized agency thereof, of the operation, control or use of the Airport, or any substantial part or parts thereof, in such a manner as to restrict substantially Lessee from. conducting business operations for a period in excess of ninety (90) days. B. Termination by Lessor. This Agrccmont shall be subject to termination by Lessor in the event of anyone or more of the following events: 1. The default by Lessee in the performance of any of the terms, covenants or conditions of this Agreement, and the failure of Lessee to remedy, or undertake to remedy, to Lessor's satisfaction, such default for a period of thirty (30) days after receipt of notice from Lessor to remedy the same. 2. Lessee files a voluntary petition in bankruptcy, including a reorganization plan, makes a general or other assignment for the benefit of creditors, is adjudicated as bankrupt or if a receiver is appointed for the property or affairs of Lessee and such receivership is nut vacated within thirty (30) days after the appointment of such receiver. C. Exercisc. Exercise of the rights of termination set forth. in Paragraphs A and B, above, shall he by notice to the other party within thirty (30) days following the event giving rise to the termination. LEASE OF KALISPELL CITY PROPERTY - Page 5 of 8 D. Removal of Property. Upon termination of this Agreement for any reason, Lessee, at its sole expense, shall remove from the Premises all signs, trade fixtures, furnishings, personal property equipment and materials, which Lessee was permitted to install or maintain under the rights granted herein. If Lessee shall fail to do so within thirty (30) days, then Lessor may effect such removal or restoration at Lessee's expense, and Lessee agrees to pay Leaser sucL r,7LPQLSe promptly upon receipt of a proper invoice therefore. E. Causes of Breach; Waiver. 1. Neither party shall be held to be in breach of this Agreement because of any failure to perform any of its obligations hereunder if said failure is due to any cause for which it is not responsible and over which it has no control; provided, however, that the foregoing provision shall not apply to failures by Lessee to pay fees, rents or over charges to Lessor. 2. The waiver of any breach, violation or default in or with respect to the performance or observance of the covenants and conditions contained herein shall not be taken to constitute a waiver of any such subsequent breach, violation or default in or with respect to the same or any other covenant or condition hcrcof Except as provided in Paragraph I of Article V of this Agreement, all claims or disputes arising out of or relating to this Agreement shall be settled by arbitration in accordance with the Commercial Arbitration Ryles of the American Arbitration Association then obtaining. Notice of the demand for arbitration shall be filed in writing with the other party to the Agreement and with the American Arbitration Association and shall be made within a reasonable time after the claim or dispute has arisen. The award rendered by the arbitrators shall be final, and judgment may be entered upon it in accordance with applicable law in any court having jurisdiction thereof. Except by written consent of the person or entity sought to be joined, no arbitration arising out of or relating to the Agreement shall include, by consolidation, joinder or in any other manner, any person or entity not a party to the Agreement, unless it is shown at the time the demand for arbitration is filed that (1) such person or entity is substantially involved in a common question of fact or law; (2) the presence of such person or entity is required if complete rclief is to be accorded in the arbitration; and (3) the interest or responsibility of such person or entity in the matter is not insubstantial. The agreement of the parties to arbitrate claims and disputes shall be specifically enforceable under the prevailing arbitration law. Pending final decision of the arbitrator or arbitrators, the parties shall proceed diligently with the performance of their obligations under this Agreement. ARTICLE XIV MISCELLANEOUS PROVISIONS A. Entire Agreement. This Agreement constitutes the entire understanding between the parties, and as of its effective date supersedes all prior or independent agreements between the parties covering the subject matter hereof. Any change of modification hereof must be in writing signed by both parties. B. Severability. If a provision hereof shall be finally declared void or illegal by any court or administrative agency having jurisdiction, the entire Agreement shall not be void, but the LEASE OF KALISPELL CITY PROPERTY - Page 6 of 8 remaining provisions shall continue in effect as nearly as possible in accordance with the original intent of the parties. C. Notice, Any notice given by one party to the other in connection with this Agreement shall be in writing and sbalI be sent by registered inail, return receipt requested, with postage and registration fees prepaid: 1. If to Lessor, addressed to: City Manager P.O. Box 1997 Kalispell, MT 59903-1997 2. If to Lessee, addressed to: Robert Voelker Gateway Hospitality Group 8920 Canyon Falls Blvd., Ste. 125 Twinsburg, OH 44087 (T)440-336-0853 (F)330-405-9898 Notices shall be deemed to have been received on the date of receipt as shown on the return receipt. D. Headings. The headings used in this Agreement are intended for convenience of reference only and do not define or limit the scope or meaning of any provision of this Agreement. E. Governing Law, This Agreement is to be construed in accordance with the laws of the State of Montana. IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first above written. LESSOR: CITY OF KALISPELL es H. atrick, City Maner LEASE OF KALISPELL CITY PROPERTY - Page 7 of 8 STATE OF MONTANA ) ) ss. County of Flathead ) On this 11L,,- lay of July, 2006, before me, a Notary .Public for the State of Montana, personally appeared James H. Patrick, City Manager of the City of Kalispell and proved to me to be the person whose name is subscribed to the within instrument, and acknowledged to me that he executed the same. IN RTMESS WHEREOF, I have hereunto set my hand and affixed my official seal the day and year hereinabove fast written. NOTARY PUBLIC State of Montana Residing at: 1ZcA\��,z-�S YiC My Commission expires: Cr-Z STATE OF 0 k ,-:P _ ) ss. County of f o-t-6L'i P_ ) On this _j'� day of July, 2006, before me, a Notary Public for the State of C91�w personally appeared Robert Voelker, as managing member of Kalispell Hotels, LLC, a Montana limited liability company, proved to me to be the person whose name is subscribed to the within instrument, and acknowledged to me that he executed the same. IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the day and year heremabove first written. NOTARY P IC State ofQ�vim_ Residing at:Tka Vps s*-P- ZVO Dar,- . Aa My Commission expires: 2-- It. - 2, 2 0 'T1- - 0 �ceV? DENNIS HAI-LAHAN Notary Public, State of Ohio, Portage County MyCommission Expires Feb. 16, 2010 LEASE OF KALISPELL CITY PROPERTY - Pagelof PURPOSE OF SURVEY: LEASE DESCRIPTIONS DESCRIPTION: FOUR TRACTS OF LAND, SITUATED, LYING, AND BEING IN THE NORTH HALF OF THE NORTHWEST QUARTER OF SECTION 20, TOWNSHIP 28 NORTH, RANGE 21 WEST, P.M.,M., FLATHEAD COUNTY, MONTANA, AND MORE PARTICUf ARLY DESCRIBED AS FOLLOWS TO WIT: TRACT 1 A portion of Lot 2, Block 1 of AIRPORT ADDITION to Kalispell, a subdivision records of Flathead County, Montana; Commencing at the southeast corner of said Lot 2 which is a found iron pin; Thence S5604410011W 42.60 feet to a set iron pin being the TRUE POINT OF BEGINNING of the tract of land herein described; Thence continuing S56044100"W 107.54 feet to a found iron pin being the southwest corner of said Lot 2; Thence N32049128"W 149.96 feet to a found iron pin being the northwest corner of said Lot 2; Thence N56043133"E 149.17 feet to a set iron pin on the west right-of-way of U.S_ Highway No. 93 being the northeast corner of said Lot 2; Thence S33°11'38"E 84.97 feet along said right-of-way to a set iron pin; Thence leaving said right--of-way S560441001**W 42.60 feet to a set iron pi.n; Th.once S33011138"E 65.00 feet to the to the point of beginning containing 0.452 acre (19673 square feet) more or less, subject to and together with all appurtenant casements of record. TRACT 2 BEGINNING at the southwest corner of Lot 2, Block 1 of AIRPORT ADDITION to Kalispell, a subdivision records of Flathead County, Monta ia, which is a found iron pin; Thence S56°46' 53-W 149.99 feet to a found iron pin being the northeast corner of a tract of land as shown and described on Deed Exhibit Book 507, page 117, records of Flathead County, Montana; Thence S5604712611W 73.33 feet along the north boundary of said Deed Exhibit to a set iron pin; Thence N33016113"W 149.72 feet to a set iron pin on the south boundary of Lot 1A of the Resubdivision of Lot 1, Block 1 AIRPORT ADDITION to Kalispell, a subdivision records of Flathead County, Montana; Thence N56043133"E 224.48 feet to a found iron pin being the northwest corner of Lot 2, Block 1 of AIRPORT ADDITION to Kalispell, a subdivision records of Flathead County, Montana; Thence S3204928"E 149.96 feet to the point of beginning and containing 0.770 acre (33550 square feet) more or less, subject to and together with all appurtenant easements of record. TRACT 3 Commencing at the southwest corner of Lot 21 Block 1 of AIRPORT ADDITION to Kalispell, a subdivision records of Flathead County, Montana, which is a found iron pin, Thence S56046153"W 149.99 feet to a found iron pin being the northeast corner of a tract of land as shown and described on Deed Exhibit Book 507, page 117, records of Flathead County, Montana, being the TRUE POINT OF BEGINNING of the tract of land herein described; Thence S33016113"E 278.38 feet along the east boundary of said Deed Exhibit to a set iron pin; Thence S56043146"W 13.33 feet to a set iron. pin; Thence N3301.6113"W 205.69 feet to a set iron pin; Thence S56047124"W 60.00 feet to a set iron pin; Thence N33016'131"W 72.71 feet to a set iron pin on the north boundary of said Deed Exhibit; Thence N5604712611E 73.33 feet to the point of beginning and containing 0.185 acre (8073 square feet) more or less, subject to and together with all appurtenant easements of record. TRACT 4 BEGINNING at the southwest corner of Tract 1 as shown and described on Certificate of Survey No. 17045, records of Flathead County, Montana, which is a found iron pin.; Thence S560521031W 13.33 feet to a set iron pin; Thence N33°16113"W 144.56 feet to a set iron pin; Thence N56043' 47"E 13.33 feet to a set iron pin on the west boundary of said Tract 1; Thence S33016113"W 144.59 feet to the point of beginning and containing 0.044 acre (1927 square feet) more or less, subject to and together with all appurtenant easements of record. TO KALISPELL HOTELS, LLC THISAMENDMENTto that lease dated the day of July, 2006 between the City of Kalispell, a body politic and corporate created by Montana State Statutes, Lessor and Kalispell Hotels, LLC, a Montana Limited Liability Company, of P.O. Box 1068, 741 Lakeside Blvd., Lakeside, MT 59922 is made this day of November, 2006. The property that is the subject to this lease is described as set forth in Exhibit "A" attached hereto and incorporated fully herein by this reference. The parties of this lease agreement hereby agree to amend the above -described lease at ARTICLE I — TERM to state as follows: The term of this Agreement shall be for a period of NINETY-NINE (99) years, commencing immediately, with the first payment beginning on the date that Lessee receives its certificate of occupancy from the City of Kalispell, and continuing for ninety-nine years, unless earlier terminated under the provisions of this Agreement. All other terms of the lease agreement remain unchanged by this amendment. TN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first above written. LESSOR: CITY OF KALISPELL Ja es H. Patrick, City Manager r.FC4FF- LEASE OF KALISPELL CITY PROPERTY - Page 1 of 2 SECOND AMENDMENT TO THE LEASE OF KALISPELL CITY PROPERTY TO KALISPELL HOTELS, LLC THIS AMENDMENT to that lease dated the l ,o day of July, 2006 between the City of Kalispell, a body politic and corporate created by Montana State Statutes, Lessor `\g'�and Kalispell Hotel/, LLC, a Montana Limited Liability Company, of P.O. Box 1068, 741 Lakeside Blvd., Lakeside, MT 59922 is made this _PJ day of November, 2006. The property that is the subject to this lease is described as set forth in Exhibit "A" attached hereto and incorporated fully herein by this reference. The parties of this lease agreement hereby agree to amend the above -described lease at ARTICLE III — RIGHTS AND OBLIGATIONS OF LESSEE, Paragraph E to state as follows: E. Parking and Access for Red Emile Aviation. Until such time as the airport expansion is completed and the business known as Red Eagle Aviation is moved from its present location next to the subject premises, ten parking spaces within Tract 4 of the leased premises shall be designated as daytime (6:00am to 6:00pm) reserved parking for employee and guest parking of Red Eagle Aviation. All other terms of the lease agreement remain unchanged by this amendment. IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first above written. LESSOR: CITY OF KALISPELL B J H. Patrick, City Manager LESSEE: KALISPELL HOTEL` , LLC By: Robert Voelker, Managing Member LEASE OF KALISPELL CITY PROPERTY - Page I of 2 STATE OF MONTANA ) ) ss. County of ) On this o 9 a y of November, 2006, before me, a Notary Public for the State of Montana, personally appeared James H. Patrick, City Manager of the City of Kalispell and proved to me to be the person whose name is subscribed to the within instrument, and acknowledged to me that he executed the same. IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official sea] the day and year herein4p�e`1" '"j en. NOTARIAL . SEAL ,,,�S, OF STATE OF ) ss. County of ) NOTARY PUBF.,Iof Montana Residing at: My Commission expires: l U On this day of November, 2006, before me, a Notary Public for the State of personally appeared Robert Voelker, as managing member of Kalispell HoteV LLC, a Montana limited liability company, proved to me to be the person whose name is subscribed to the within instrument, and acknowledged to me that he executed the same. IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the day and year hereinabove first written. NOTARY PUBLIC State of Residing at: My Commission expires: LEASE OF KALISPELL CITY PROPERTY - Page 2 of 2 SECOND AMENDMENT TO THE LEASE OF KALISPELL CITY PROPERTY TO KALISPELL HOTEL, LLC THIS "ENDMENT to that lease dated the 12 day of July, 2006 between the City of Kalispell, a body politic and corporate created by Montana State Statutes, Lessor and Kalispell Hotel, LLC, a Montana Limited Liability Company, of P.O. Box 1068, 741 Lakeside Blvd., Lakeside, MT 59922 is made this Q'- day of November, 2006. The property that is the subject to this lease is described as set forth in Exhibit "A" attached hereto and incorporated fully herein by this reference. The parties of this lease agreement hereby agree to amend the above -described lease at ARTICLE III — RIGHTS AND OBLIGATIONS OF LESSEE, Paragraph E to state as follows: E. Parking and Access for Red Eagle Aviation. Until such time as the airport expansion is completed and the business known as Red Eagle Aviation is moved from its present location next to the subject premises, ten parking spaces within Tract 4 of the leased premises shall be designated as daytime (6:00am to 6:00pm) reserved parking for employee and guest parking of Red Eagle Aviation. All other terms of the lease agreement remain unchanged by this amendment. IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first above written. LESSOR: CITY OF KALISPELL By: James H. Patrick, City Manager LESSEE: KALISPELL TEL, LLC Aob261VoJlker. Mana2in2 Member LEASE OF KALISPELL CITY PROPERTY - Page 1 of 2 STATE OF MONTANA ) ) ss. County of Flathead ) On this day of November, 2006, before me, a Notary Public for the State of Montana, personally appeared James H. Patrick, City Manager of the City of Kalispell and proved to me to be the person whose name is subscribed to the within instrument, and acknowledged to me that he executed the same. IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the day and year hereinabove first written. NOTARY PUBLIC State of Montana Residing at: My Commission expires: STATE OF ) ss. County of �U ►M ."� } On this 21 day of November, 2006, before me, a Notary Public for the State of nal �n C) , persoly appeared Robert Voelker, as managing member of Kalispell Hotels, LLC, a Montana limited liability company, proved to me to be the person whose name is subscribed to the within instrument, and acknowledged to me that he executed the same. IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the day and year hereinabove first written. () (),A ' 9 0.111\-'L'/Vl� O Y PUBLIC State of _ A RILARE D Residing at:�C o f t RCi N;Mbu c Notary PubNc, SIMS d Otgo My Commission expires: �'V z My ton 23.2009C1ii_.J5 LEASE OF KALISPELL CITY PROPERTY - Page 2 of 2