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S27 Declaration of Executive Condominium/T&L PropertiesAfter Recording Return To: Gary B. Chumrau Garlington, Lohn & Robinson, PLLP 199 West Pine • P.O. Box 7909 Missoula, MT 59807-7909 DECLARATION OF CONDOMINIUM FOR THE S27 EXECUTIVE CONDOMINIUM THIS DECLARATION is hereby made and entered into effective as of the day of January, 2007, by T & L PROPERTIES, LLP, a Montana limited liability partnership (hereinafter referred to as the "Declarant'), whereby lands and property hereinafter described are submitted and subject to the Montana Unit Ownership Act pursuant to Montana Code Annotated Chapter 23, Title 70, as amended. The property subject to this Declaration shall be known as the S27 EXECUTIVE CONDOMINIUM (hereinafter referred to as the "Condominium"). The address of the Condominium is the S27 EXECUTIVE CONDOMINIUM, Kalispell City Airport, 4170 US Highway 2E, Kalispell, Montana 59901. I. DEFINITIONS Unless the context expressly provides otherwise, the following definitions shall pertain throughout this Declaration and in the interpretation thereof: 1. Aggregate Voting: shall mean the entire number of votes or persons present or available to vote in person or by proxy in a particular circumstance. Association or Association of Unit Owners: means all of the Unit Owners acting as a group as the S27 EXECUTIVE Condominium Owners Association, Inc. and in accordance with duly adopted Bylaws and this Declaration. Declaration of S27 EXECUTIVE Condominium Page 1 of 23 3. Board or Board of Directors: shall mean the Board of Directors of the Association as more particularly defined in the Bylaws. 4. Building: means the light aircraft storage building(s) containing the condominium units. Bylaws: means the Bylaws promulgated by the Association under this Declaration and the Unit Ownership Act. 6. Common Elements: means both general common elements and limited common elements. a. General Common Elements: includes all those elements which are for the use and benefit of all owners and guests of owners of Units in the S27 EXECUTIVE CONDOMINIUM. Specifically included are: footings, foundations, concrete slab, framework, columns, walls (excluding the sliding doors on the entrance to each Unit), trusses, supports, the tracks for the sliding doors, insulation, ceilings, roof and other structural components of the Building, cables, conduit, water, sewer, electricity, gas, cable and other utility lines to the extent they service all the Units, and other elements necessary for the safety, maintenance, and existence of the Condominium in which each Unit Owner shall have such Owner's designated percentage of interest, as set forth in paragraph IV below. b. Limited Common Elements: as used in this Declaration shall mean those common elements which are reserved for the use of one (1) or fewer than all of the Owners of Units in the S27 EXECUTIVE CONDOMINIUM. Specifically, as to any given Unit Owner or Owners, limited common elements shall mean the following common elements located within or affixed to the Building containing the Unit in which the elements are located or situated on the real property known as the S27 EXECUTIVE / CONDOMINIUM: Cables, conduits, public utility lines, water, sewer, electrical, gas, cable television lines and hot and cold water pipes to the extent they service one (1) Unit (or fewer than all the Units) exclusively (all such utility pipes and lines that service all Units shall be general common elements), furnaces, boilers, hot water tanks, heating ducts, cold air returns, bathroom fixtures JVr and fixtures or other portions of the Building servicing only a single Unit A or less than all of the Units. The percentage of a separate Unit's interest in t the limited common elements shall be computed by determining the number of Units that have use of the limited common elements and taking the value of each Unit and dividing it by the value of the Unit or all such Declaration of S27 EXECUTIVE Condominium Page 2 of 23 Units making use of the particular limited common element. Such values shall be the same as the values used to compute the percentage interest of the Unit Owner in the general common elements and shall be the value of the general common elements and shall be the value of the Units at the date of filing this Declaration and which are set forth in this Declaration. If, for example, a limited common element is reserved exclusively for the use of one (1) Unit, such Unit's percentage of interest shall be 100%. If a limited common element is reserved for the exclusive use of two (2) Units, each Unit's percentage of interest would be 50%, and so on. 7. Common Expenses: means expenses of administration, maintenance, repair or replacement of general common elements, expenses agreed upon by the Association of all Unit Owners, and expenses declared common by the Unit Ownership Act. Common Expenses also include the rental and other amounts due under the Ground Lease to the Landowner. In this regard, the Declarant may, at its option, assign Declarant's interest as Lessee under the Ground Lease to the Association after this Declaration has been recorded, but such assignment would not include an assignment, sale or transfer of the Building (or the Units) which would remain the property of Declarant, except to the extent Declarant has sold and transferred Condominium Units in the Building to individual Unit Owners subject to the terms and conditions of this Declaration. Common Expenses can include "Limited Expenses" to the extent the Association at its option chooses to levy assessments for limited common elements, or to the extent a Unit Owner fails to provide for the maintenance, repair or replacement of such Units' limited common elements as provided for in this Declaration. Common expenses may include the expenses to maintain the small areas of N landscaping (e.g. grass, shrubs and plants) outside the footprint of the Building-& 62.:' � t ibie-for. sueh-m Declaration: means this Declaration of Condominium and all exhibits and: . . documents attached thereto or incorporated by reference. 9. Ground Lease: the Hanger Site Lease by and between the CITY OF KALISPELL, a municipal corporation, as Lessor and DECLARANT as Lessee, dated December 30, 2004, but as amended and assigned to the Association by the terms of that certain Amendment and Assignment of Hangar Site Lease No. 2 with an Effective Date of , 2007, covering the land on which the Condominium Building is situated (i.e. Parcel A-3 as described in the Ground Lease and described as the "Condo Parcel"). THIS CONDOMINIUM IS SUBJECT TO THE TERMS AND CONDITIONS OF THE GROUND LEASE. The Ground Lease is a lease of the land only. The Building is personal property owned by the Lessee/Declarant, who has the option to remove the Building upon Declaration of S27 EXECUTIVE Condominium Page 3 of 23 the expiration or earlier termination of the Lease. The Ground Lease may be assigned to the Association as set forth in Paragraph I7, above, but Declarant shall be permitted to allow the Building to remain on the property. 10. Landowner: the fee simple owner of the land upon which the Building compromising the leasehold Condominium is situated. At the time of the filing of the Declaration of record, the City of Kalispell is the Landowner. 11. Limited Expenses: means the expenses attributable to the maintenance, repair and replacement of limited common elements. 12. Manager: means the manager, the Board of Directors, management company or any other person or group of persons retained or appointed by the Board, or by the Association of Unit Owners for the purpose of conducting the day-to-day operations of the S27 EXECUTIVE CONDOMINIUM. 13. Property: means the Building, including all improvements and structural elements thereof and all easements, rights and appurtenances belonging thereto, which are herewith submitted to the Unit Ownership Act, which Building is located on the leased land under the terms of the Ground Lease. 14. Record Officer: means the county officer charged with the duty of filing and recording deeds, mortgages and all other instruments and documents relating to this Declaration and the Property which is the subject of this Declaration. 15. Unit: shall be each separate Condominium Unit of the S27 EXECUTIVE CONDOMINIUM, together with each such Unit's appurtenant undivided interest in the general common elements and any interest reserved to such Unit for the use of any limited common element, as said each Unit is described in this Declaration. Each Unit shall have the boundaries described in Section II and as shown in Exhibit A, and shall each be a separate and distinct parcel of property. Units shall also include any additional Units that may subsequently be added by expansion as set forth in Section XIV, below. 16. Unit Designation: is the combination of letters, numbers and words which identify the designated Units. 17. Unit Owner or Owner: means the person or persons owning a Condominium leasehold interest, or one who is a co-owner in any property relationship that is recognized under the laws of the State of Montana, in one or more Units of the S27 EXECUTIVE CONDOMINIUM. Declaration of S27 EXECUTIVE Condominium Page 4 of 23 18. Unit Ownership Act: means and refers to the Unit Ownership Act of the State of Montana, Montana Code Annotated § 70-23-101, et seq. II. REAL ESTATE 1. Description. The property which is by this Declaration submitted and subject to the Montana Unit Ownership Act is described as follows: The airplane hanger Building located on the City of Kalispell airport property, as shown and surveyed on Exhibit A attached hereto, which is Certificate of Survey No. 17527, Flathead County, Montana. 2. Condominium Units. The initial Condominium Units consist of three (3) separate Units with Unit Designations A3-1, A3-2, and A3-3, as shown and labeled on Exhibit A. All Units are equal in size and for purposes of ownership percentages, voting and Common Expenses, all Units shall be considered equal. Each Unit shall together compromise one condominium leasehold unit, shall be inseparable, and may be conveyed, leased, rented, devised or encumbered as a leasehold condominium. 3. Encroachments. If any portion of the general common elements or limited common elements encroaches upon a Unit or Units, a valid easement for the encroachment and for the maintenance of the same, so long as it stands, shall and does exist. If any portion of a Unit encroaches upon the general common elements, or limited common elements, or upon an adjoining Unit or Units, a valid easement for the encroachment and for the maintenance of the same, so long as it stands, shall and does exist. Such encroachments and easements shall not be considered or determined to be encumbrances either on the general common elements, the limited common elements, or on the Units for the purpose of marketability or title. In the event the Building or any portion thereof is destroyed and then rebuilt, the Owners of the Unit or Units agree that minor encroachments of parts of the general common or limited common elements because of such construction shall be permitted and that an easement for such encroachment and the maintenance and repair of the same shall exist. 4. Building. The Units compromising the initial Condominium are contained in a single one (1) story building as shown on Exhibit A, which is subject to expansion as provided in Paragraph XIV, below. 5. Unit Boundaries. Each Unit shall include the part of the Building containing the Unit that lies within the boundaries of the Unit, which boundaries are as follows: 5.1 Upper and Lower Boundaries. The upper and lower boundaries of the Unit shall be the following boundaries extended to an intersection with the perimetrical boundaries. Declaration of S27 EXECUTIVE Condominium Page 5 of 23 5.1.1 Upper Boundary. The plane of the underside of the insulation attached to the ceiling members or rafters of each Unit. The insulation and ceiling and any structural members above the insulation are general common elements. 5.1.2 Lower Boundary. The plane of the surface of the concrete floor of each Unit. 5.2 Perimetrical Boundaries. The perimetrical boundaries of the Unit shall be the following boundaries extended to an intersection with the upper and lower boundaries. 5.2.1 Exterior Building Walls. The intersecting vertical planes adjacent to and including the interior sheathing or wall covering the outside walls bounding a Unit (i.e. the interior surface of the outside walls). 5.2.2 Interior Building Walls. The vertical planes of the centerline of the walls between the Units extended to an intersection with other perimetrical boundaries. 6. Construction Materials. The principal construction materials for the Building are concrete for the slab for the floor, and Type II steel construction for the building structure. III. EASEMENT, COMMON ELEMENT — INTERIOR REMODELING 1. Common Element Easements. A non-exclusive right of ingress and egress and support through the general common elements is appurtenant to each Unit and all the general common elements are subject to such rights. Such easements include an easement for ingress and egress from and to each Unit to the taxiways for access to the runways. 2. Easement for Utilities. Each Unit may have its air space penetrated by electrical wires and lines, gas lines, mechanical equipment including air handling ducts, hot and cold water lines, waste water lines and vents and other utility and mechanical lines, pipes, ducts, conduits, or equipment. These lines, where they serve only one Unit shall be a limited common element appurtenant to such Unit, but where they serve more than one Unit shall be part of the common elements — either limited or general depending on how many Units are being served thereby as defined in Section I, 6, b. Such items shall be so installed and maintained that they shall not unreasonably interfere with the use of the Unit air space by the Owners of the same and shall wherever possible be located in any space available between the actual ceiling (or rafters) and the top of the insulation. A non-exclusive easement shall exist through, over and across each Unit for inspection, installation, maintenance, replacement, expansion and repair of such utility lines and mechanical equipment for the use of all of the Unit Owners or the Unit Owners being serviced by the air space that is being penetrated by such lines and/or equipment. In order to Declaration of S27 EXECUTIVE Condominium Page 6 of 23 keep interference to a minimum, ingress and egress for the purpose of such inspection, installation, maintenance, replacement, expansion or repair shall only be done under the direction and approval and with the authority of the Owners Association and/or the Manager unless an emergency exists in which event any action may reasonably be taken which is justified under the circumstances to minimize damage which would otherwise occur as a consequence of such emergency. IV. OWNERSHIP AND VOTING — EXHIBITS — USE 1. Percentage of Interest. Each Unit Owner shall be entitled to the exclusive ownership, use and possession of such Owner's Unit and the percentage of the interest of each Unit Owner in the common elements set forth below. Each Unit Owner shall have an equal percentage of undivided interest in the general common elements of the S27 EXECUTIVE CONDOMINIUM, Such percentages represent the Owner's ownership interest in the general common elements, liability for Common Expenses, and the voting interest of the Unit Owner or Owners in all matters concerning the Association of Unit Owners. Such percentages of interest shall be according to the percentages set forth below: UNIT NO. PERCENTAGE OF INTEREST IN GENERAL COMMON ELEMENTS A3-1 One -Third (1/3) A3-2 One -Third (1/3) A3-3 One -Third (1/3) 100% TOTAL 2. Floor Plans and Exhibits. The S27 EXECUTIVE CONDOMINIUM consists of the Property as described above, and a total of three (3) separate Condominium Units as shown on the survey plans attached hereto as Exhibit A. For identification and descriptive purposes, the following Exhibits are attached and by reference hereto incorporated into and made a part of this Declaration: 2.1 Exhibit A. Showing the floor plans for each of the Units of the S27 EXECUTIVE CONDOMINIUM, the area of each, the dimensions, and the Unit Designation for each Unit. 2.2 Exhibit C-2. Showing the site plan of the Kalispell City Airport and the location of the Building containing the Condominium Units o the airport property, with the Building shown and labeled as "Building" and marked with a 1 3. Use. The Owner of each Unit shall occupy and use such Unit only as a storage facility for light aircraft and personal property/equipment directly related thereto. Declaration of S27 EXECUTIVE Condominium Page 7 of 23 3.1 There shall be no obstruction of the Common Elements nor shall anything be stored in or on the common elements without the prior consent of the Association. Each Owner shall be obligated to maintain and keep in good order and repair such Owner's own Unit, and the limited common elements appurtenant thereto. If a limited common element is appurtenant to two (2) or more Units, the common Owners shall have the obligation to maintain and repair in proportion to their respective percentage of ownership. 3.2 Nothing shall be done or kept in any Unit or in the common elements which will increase the rate of insurance on the Building or contents thereof applicable for aircraft storage use. No Owner shall permit anything to be done or kept in such Owner's Unit or in the common elements which will result in the cancellation of insurance on the Building, or contents thereof, or which would be in violation of any law, rule, regulation or ordinance, including any FAA rules or regulations. No waste will be permitted in the common elements. 3.3 Owners shall not cause or permit anything to be hung or displayed on the outside of windows or placed on the outside walls of the Building and no sign, awning, canopy, radio or television antenna shall be affixed to or placed upon the exterior walls or roof or any part thereof, without the prior written consent of the Association. 3.4 No nuisance shall be allowed upon the Property nor shall any use or practice be allowed which is a source of annoyance to Owners of the Condominium or which interferes with the peaceful possession and proper use of the Property by its Owners. No immoral, improper, offensive or unlawful use shall be made of the property nor any part thereof and all valid laws, zoning ordinances and regulations of all governmental bodies having jurisdiction thereof shall be observed. 3.5 Nothing shall be done in any Unit or in, on or to the common elements which will impair the structural integrity of the Building or which would structurally change the Building, except as otherwise provided herein. 3.6 Nothing shall be altered or constructed in or removed from the common elements, except upon the written notice of the Association. 3.7 No airplane shall be started or operated in any Unit space or close enough to any Unit space to create damage or dust problems. Aircraft engines shall not be run while the aircraft is in the Unit. 3.8 No electrical engine starter or space heater shall be utilized in any Unit unless the Unit Owner, at the Owner's sole expense, has installed separate adequate electrical metering for that Unit, in conformity with all applicable building codes. 3.9 Any devise to be utilized for engine starting or space heating must be approved prior to use by the Association. Declaration of S27 EXECUTIVE Condominium Page 8 of 23 3.10 The Unit Owners shall observe and comply with any other reasonable rules and regulations enacted from time to time by the Association to govern the use of the Condominium Units, including by way of example rules for parking, garbage storage and removal, pets, etc. 3.11 The Unit Owners shall comply with, and will not do anything, or allow anything to be done in their respective Units or the common elements that will in any way violate or be contrary to the terms, conditions and restrictions in the Ground Lease, a copy of which will be provided to each Unit Owner. 4. Exclusive Ownership. Each Owner or Owners shall be entitled to exclusive ownership and possession of their Unit. Such Owners may use the general and limited common elements in accordance with and subject to the conditions and restrictions contained herein. V. THE ASSOCIATION 1. Membership. An Owner of a Unit in the S27 EXECUTIVE CONDOMINIUM shall automatically, upon becoming the Owner of said Unit, be a member of the Association, and shall remain a member of said Association until such time as the Owner's ownership ceases for any reason, or until such time as the Property is removed from the condominium form of ownership, at which time such membership in said Association shall automatically cease. The membership shall be limited to Unit Owners as defined in this Declaration. 2. Function. It shall be the function of the Association to: 2.1 Adopt Bylaws for the governance of the Association. 2.2 Make provisions for the general management and/or repairs and maintenance of the Condominium. 2.3 Levy assessments as provided for in the Declaration, Bylaws and Unit Ownership Act. 2.4 Adopt and implement a policy for (and reasonable rules and regulations to govern) the affairs of the Condominium. 2.5 Enter into contracts as deemed appropriate to hire personnel for the management of the affairs of the Association and the maintenance and repair of the common areas. 2.6 Perform such other related functions and duties as are expressly set forth elsewhere in this Declaration, the Bylaws or the Unit Ownership Act, or as may be reasonable Declaration of S27 EXECUTIVE Condominium Page 9 of 23 and necessary for the proper and efficient operation of the Association and the condominium project. 3. Vote. On all matters, unless excluded by this Declaration, to be decided by the Association, each Unit Owner shall have a vote equal to such Owner's percentage of interest in the general common elements (i.e. an equal one-third (1/3) vote). Except as otherwise provided in the Unit Ownership Act, this Declaration or the Bylaws, a majority of the Aggregate Voting interest present at any meeting in person or by proxy at which there is a quorum shall be sufficient to act on matters brought before the Association. Meetings of the Association shall only be conducted when a quorum is present, as defined in the Association Bylaws. 4. Failure to Comply. Each Owner shall comply strictly with the provisions of this Declaration, the Bylaws of the Association and the rules, regulations, decisions and resolutions of the Association adopted from time to time. Failure to comply with any of the same shall be grounds for an action to recover sums due, for damages or injunctive relief or both, and for reimbursement of all costs, including attorney fees incurred in connection therewith, which action shall be maintainable by the Association in its name, the Manager in the name of the Association, on behalf of the Owner or by an aggrieved owner where there has been a failure of the Association to bring such action within a reasonable time. 5. Payment of Assessments. All assessments levied by the Association (approved at a meeting for such purpose), shall be due twenty (20) days from the date of mailing such assessments, and may be payable in monthly, quarterly or annual installments, at the option of the Board. The amount of the Common Expenses assessed against each Condominium Unit and the amount of Limited Expenses (if any) assessed against such Condominium Unit shall be the personal and individual debt of the Owner or Owners thereof, as well as a lien against the Unit as provided below. No Owner may exempt such Owner from liability for this contribution toward the Common Expenses and the Limited Expenses by waiver of the use or enjoyment of any of the general common elements or limited common elements or by abandonment of such Owner's Unit. All assessments which are not paid within thirty (30) days from the date they are due and payable become delinquent and are subject to interest and penalty charges. The Association or Manager shall have the responsibility of taking prompt action to collect any unpaid assessment which becomes delinquent. In the event of delinquency in the payment of the assessments, the Unit Owner shall be obligated to pay interest at the rate often percent (10%) per annum on the amount of the assessment from the due date thereof, until paid in full, together with a late charge equal to five percent (5%) of the amount of the delinquent amount. Suit to recover a money judgment for unpaid Common Expenses and Limited Expenses may be maintainable without foreclosing or waiving the lien securing the same. 5.1 Common Expenses and common profits, if any, and Limited Common Expenses shall be distributed among, and charged to the Unit Owners according to the percentage of interest of each in the common elements. Declaration of S27 EXECUTIVE Condominium Page 10 of 23 5.2 Except as otherwise limited in this Declaration, each Unit Owner shall have the right to use the common elements for all purposes incident to the use of an occupancy of the Unit, and such other incidental uses permitted by this Declaration, which rights shall be appurtenant to and run with the whole Unit, subject at all times to the terms, conditions, rules, regulations and restrictions governing the use of such common elements. 6. Levying Assessments — When Made — Purposes. The Association of Unit Owners shall levy assessments upon the Unit Owners in the following manner and for the following reasons: 6.1 Assessments shall be made a part of the regular, annual business meeting of the Association as provided in the Bylaws of the Association or assessments can be made for special purposes at any other regular or special meeting thereof. All assessments shall be fixed by resolution of the Board of Directors. Notice of the assessment, whether regular or special, the amount thereof, and the purpose for which it is made, including an annual budget for expenditures and operation, for regular annual assessments, shall be served on all Unit Owners affected, by delivering a copy of the same to the Owner personally or by mailing a copy of the notice to the Owners at their addresses of record at least ten (10) days prior to the date for such meeting. 6.2 Assessment shall be made for the repair, replacement, insurance, general maintenance, management and administration of general common elements, fees, costs and expenses of the Manager (if any), taxes for the common areas if any, and assessments for the Unit Owner's percentage share of any Special Improvement District Assessments, and as more particularly provided in Montana Code Annotated § 70-23-101. Assessments shall be based upon and computed using the percentage of interest that each Unit Owner has in relation to the common elements. 6.3 Assessments may also be made at the Association's option for the payment of limited common element expenses such that the Unit Owner are chargeable only for the expenses relating to their respective Units. Unit Owners shall share in the payment for limited expenses for the repair, maintenance, and replacement of limited common elements of their respective Units in accordance with the percentage the Condominium Unit or Units have in the limited common elements for which the assessment is being made. If only one Unit is associated with the limited common elements involved, then the entire cost of such repair, maintenance or replacement shall be borne by that Unit. The Association may, however, at its option choose to levy assessments for limited common elements only if it becomes necessary because Unit Owners are not making necessary and reasonably arrangements on their own to provide for regular maintenance, repair and replacement as required by this Declaration. 6.4 Assessments may also be made for any purpose contemplated by this Declaration and for any purpose set out in the Unit Ownership Act. Declaration of S27 EXECUTIVE Condominium Page 11 of 23 6.5 Common expense and profits, if any, of the S27 EXECUTIVE CONDOMINIUM shall be distributed among and charged to, the Unit Owners according to the percentage of undivided interest of each in the common elements. 6.6 In a voluntary conveyance of a Unit, the Grantee (i.e. buyer, assignee, etc.) of the Unit shall be jointly and severally liable with the Grantor (i.e. seller, assignor, etc.) for all unpaid assessments by the Association against the Grantor for such Grantor's share of the common expenses up to the time of the grant or conveyance, without prejudice to the Grantee's right to recover from the Grantor the amounts paid by the Grantee therefore. However, any such Grantee shall be entitled to a statement from the Manager or Board of Directors of the Association, as the case may be, setting forth the amount of said unpaid assessments against the Grantor due the Association and such Grantee shall not be liable for, nor shall the Unit conveyed be subject to a lien for, any unpaid assessments made by the Association against the Grantor in excess of the amount therein set forth. 6.7 At the time the Association holds its first meeting, a reserve account shall be set up in to which initial assessments shall then be deposited. 7. Board. The governance of the Association shall be by a Board of Directors elected (or appointed) among the Unit Owners as set forth in the Articles and Bylaws. VI. DECLARANT'S RIGHT TO CHANGE The Declarant reserves the right to change the interior design and arrangement of all Units, so long as the Declarant owns the Units so altered. No such change shall increase the number of Units or alter the boundary of the general common elements without an amendment of this Declaration. The Declarant further reserves the right at any time for so long as the Declarant is a Unit Owner, on behalf of themselves and on behalf of the Association, to amend the Declaration (and any necessary related documents) without approval of any Unit Owner or mortgagee for the purpose of correcting architectural, survey or other technical or compliance errors unless the amendment would materially alter or change the rights of a Unit Owner or mortgagee, in which event such affected Unit Owner's and mortgagee's consent shall be required. Provided, the value of the vote of any Unit Owner and the corresponding proportion of common expenses assessed against such Unit Owner shall not be modified without the written consent of such Unit Owner and such Owner's mortgagee, nor shall the percentage of value assigned to any Unit be modified without like consent, except as provided in this Declaration or in the Bylaws or pursuant to the Unit Ownership Act. Notwithstanding the procedures set forth above, the undersigned Declarant may amend the Declaration, or any other project document, prior to any sale or lease of a Unit or interest thereof. Declaration of S27 EXECUTIVE Condominium Page 12 of 23 Each Unit Owner hereby appoints the undersigned Declarant and the Board as his, her or its attorney -in -fact, and grants the Declarant and the Board all necessary authority so that the Declarant or the Board may file any amendment approved by the process described herein, or by the process under Paragraph VII. VII. AMENDMENT Amendment of this Declaration shall be made in the following manner: At any regular or special meeting of the Association of Unit Owners such amendment may be proposed as a resolution by any Unit Owner, or the Board or Manager. Upon adoption of the resolution by a majority vote of those present at a meeting where there is a quorum, the amendment shall be made a subject for consideration at the next succeeding meeting of the Association with notice thereof, together with a copy of the amendment to be furnished to each Owner no later than thirty (30) days in advance of such meeting. At such meeting, the amendment shall be approved upon receiving the favorable vote of two-thirds (2/3) of all Unit Owners (not just of the Unit Owners in attendance at the meeting). If so approved, it shall be the responsibility of the Association to file the amendment with the Clerk and Recorder's Office of Flathead County, Montana. VIII. CHANGES, REPAIRS AND LIENS 1. Alterations by Unit Owner's Association. The interior plan of a Unit may be changed by the Owner with the exception of the bearing walls, or any other structural element, which may not be moved or altered. No Units may be subdivided. No change in the boundaries of Units shall encroach upon the boundaries of the common elements except by amendment to this Declaration. New or altered boundary walls must be equal in quality of design and construction to the existing boundary walls. A change in the boundaries between Units shall be set forth in an amendment to this Declaration, pursuant to the amendment procedures set forth above. In addition to compliance with the provisions of Section VII above, such an amendment must further set forth and contain plans to the Units concerned showing the Units after the change in boundaries, and attached to the amendment as exhibits. Such an amendment shall be signed and acknowledged by the Owners of the Units concerned; as well as those Owners with an interest in any common elements affected, together with words of conveyance in the amendment conveying interests acquired in the Units or common elements by such change. The amendment shall also be approved by the Board of Directors of the Association and signed and Declaration of S27 EXECUTIVE Condominium Page 13 of 23 acknowledged by all lienholders and mortgagees of the Units concerned as well as the Landowner. 2. Maintenance by Owners Association. The Association shall maintain and keep in good repair the exterior of the Units and the general common (and at the Association's option the limited common) areas and the fixtures thereof. All fixtures, utility lines and equipment installed in a Unit commencing at a point where the utilities enter the Unit shall be maintained and kept in repair by the Association. The Association shall do no act nor any work that will impair the structural soundness or integrity of the Building or impair any easement. The Association shall also keep all areas and limited common elements appurtenant to the Units in a clean and sanitary condition. The right of the Association to repair, alter, and remodel is coupled with the obligation to replace any finishing or other materials removed with similar type or kinds of materials. No acts or alteration, repairing or remodeling by the Association shall impair in any way the structural integrity of the Units or the structural integrity of limited common elements or general common elements. Notwithstanding the foregoing, the Association may at its option, defer the primary responsibility of the maintenance, repair and upkeep of the limited common elements to those Unit Owners to whose interest the limited common elements are appurtenant. In such event, the Association reserves the right to arrange for any necessary repair, maintenance, upkeep or replacement (and levy assessments therefore), if the Association determines that the Unit Owners are not complying with their responsibility. 3. Exterior Alterations. No Owner may change, alter or remodel the exterior of a Unit or the Building without the prior written approval of the Board of Directors of the Association. 4. Exterior Maintenance. The Association shall take all necessary steps, including, but not limited to, painting, care of shrubs, plants and grass (to the extent landscaping outside the Building footprint is the Association's responsibility), exterior maintenance and repair, roof repair, concrete repair, snow removal and replacement or repair of all broken or worn parts, to ensure that the Building does not unnecessarily deteriorate. Provided, however, the sliding doors on the front of each Unit are limited common elements and are the responsibility of each respective Unit Owner, unless the Association exercises its option hereunder to provide for the maintenance, repair and replacement of the doors. The tracks for the sliding doors shall be considered general common elements. The Board of Directors of the Association shall annually inspect the Building and proceed with any necessary maintenance or repairs. Failure by the Board of Directors of the Association to make annual inspection and/or proceed with any necessary maintenance shall give the Landowner or any mortgagee or beneficiary of any trust indenture the right to order such work done and bill the Association therefor after notice to the Association of such intent by the Declaration of S27 EXECUTIVE Condominium Page 14 of 23 said lienholder and giving the Association a reasonable time to perform such work. Any Owner, lienholder or representative of the same and the Landowner, upon written request, shall have the right to join in the annual inspection made by the Board of Directors and suggest needed repairs and maintenance necessary to preserve the value of the condominium project. 5. Liens for Alterations. Labor performed and materials furnished and incorporated into a Unit with the consent of or at the request of the Unit Owner, or such Owner's agent, contractor or subcontractor shall be the basis for the filing of a lien against the Unit or the Unit Owner consenting to or requesting the same. Each Unit Owner shall pay for all labor and materials to prevent the filing of such a lien. Each Unit Owner shall indemnify and hold harmless each of the other Owners and the Association from and against all liability arising from the claim of any lien against the Unit or against the general common elements or limited common elements for construction performed or for labor, materials, services or other products incorporated in the Owner's Unit at such Owner's request. 6. Liens and Foreclosures. All sums assessed but unpaid for the share of general common expenses and limited common expenses chargeable to any Condominium Unit shall constitute a lien on such Unit superior to all other liens and encumbrances, except only for tax and special assessment liens on the Unit in favor of any assessing authority, and all sums unpaid on a first or second mortgage or a first or second trust indenture of record or contract for deed, including all unpaid obligatory sums as may be provided by such encumbrance. To evidence such lien, the Manager or the Board shall prepare a written notice of lien assessment setting forth the amount of such unpaid indebtedness, the amount of accrued interest and late charges thereon, the name of the Owner of the Condominium Unit and a description of the Condominium Unit. Such notice shall be signed and verified by one of the officers of the Association or by the Manager, or his authorized agent, shall be recorded in the Office of the Clerk and Recorder of Flathead County, Montana. Such lien shall attach from the date of recording such notice. Such lien may be enforced by the foreclosure of the lien against the defaulting Owner's Condominium Unit by the Association in the manner provided in the Unit Ownership Act and as provided by the foreclosure of a mortgage on real property upon the recording of a notice of a claim thereof. In any such foreclosure, the Unit Owner shall be required to pay a reasonable rental for the Unit and the Plaintiff in such foreclosure action shall be entitled to the appointment of a receiver to collect the same. Suit to recover a money judgment against an Owner for unpaid common expenses may be maintained without foreclosure or waiving the lien securing the same. In any such proceedings the Owner shall be required to pay the costs, expenses and attorney's fees incurred in filing a lien, and in the event of foreclosure proceedings or a collection action, additional costs, expenses and attorney's fees incurred. 7. Bidding at Foreclosure. The Board of Directors of the Association on behalf of the other Unit Owners, the Landowner and other Unit Owners shall have the power to bid on the Condominium Unit at a foreclosure or other legal sale and to acquire and hold, lease, mortgage and vote the votes appurtenant to, convey or otherwise deal with the same as did the former Owner. Any lienholder holding a lien on a Condominium Unit may pay, but shall not be Declaration of S27 EXECUTIVE Condominium Page 15 of 23 required to pay, any unpaid general common expenses, or limited common expenses payable with respect to any such Unit, and upon such payment such lienholder shall have a lien on said Unit for the amounts paid of the same rank as the lien of lienholder's encumbrance without the necessity of having to file a notice or claim of such lien. 8. Unpaid Assessments — Mortgagees. Where a lienholder or other purchaser of the Unit obtains title to the Unit as a result of foreclosure of the first mortgage or trust indenture, such acquirer of title, his/her/its successors, heirs and assigns, shall not be liable for the share of common expenses or assessments by the Association chargeable to such Unit which became due prior to the acquisition of title to such Unit by such acquirer. Such unpaid share of common expenses or assessments shall be deemed to be common expenses collectible from all of the Units including such acquirer, his/her/its successors, heirs and assigns. IX. INSURANCE 1. Except as provided below, all insurance policies upon the Condominium property shall be purchased by the Association and shall be issued by an insurance company authorized to do business in Montana. 1.1 Names Insured. The named insured shall be the Association individually as agent for the Unit Owners without naming them. Except as provided below, such policies shall provide that payments for losses thereunder by the insurer shall be paid to the insurance trustee hereinafter designated, and all policies and endorsements thereon shall be deposited with the insurance trustee. 1.2 Copies to Mortgagees and Landowners: One copy of each insurance policy and of all endorsements thereon shall be furnished by the Association to each mortgagee of a Unit Owner on request. 1.3 Each Owner shall be responsible at its own cost and expense to insure all aircraft, furniture, office equipment and other related personal property located within such Owner's Unit or appurtenant limited common element against all risk of loss or damage. 2. Coverage. 2.1 Casually. All Buildings and improvements upon the land shall be insured to any amount equal to the full insurable replacement value and all personal property (except Owner's personal property to be insured under Subsection 1.3, above) included in the common elements shall be fully insured, with all such insurance to be based on current replacement value, all as determined annually by the Board, the Landowner, the insurer and any first Lienholders or their representatives, but subject to such deductible clauses as are required in order to obtain coverage at reasonable costs, and which coverage shall be increased by the Board as may be Declaration ofS27 EXECUTIVE Condominium Page 16 of 23 necessary to provide that the insurance proceeds will be sufficient to cover replacement, repairs or reconstruction. Such coverage shall afford protection against: 2.1.1 Loss or damage by fire and other hazards covered by a standard extended coverage endorsement; 2.1.2 Specifically such other risks including flood and earthquake loss as from time to time shall customarily be covered with respect to buildings similar in construction, location and use as the building on the land; and 2.1.3 Errors and Omissions Insurance for the Directors, Officers and Managers if the Association so desires, in amounts to be determined by the Board. The policies shall state whether the following items are included within the coverage in order that the Unit Owners may insure themselves if the items are not insured by the Association: airhandling equipment for space cooling and heating, service equipment, whether or not such items are built-in equipment, interior fixtures such as electrical and plumbing fixtures, inside paint and other inside wall furnishings. 2.2 Public Liability. In such amounts and with such coverage as shall be deemed adequate by the Board of Directors of the Association, in consultation with the insurer or its agents, including, but not limited to hired automobile and non -owned automobile coverage, if applicable, and with cross -liability endorsement to cover liabilities of the Unit Owners as a group to a Unit Owner. 2.3 Other Insurance. Such other insurance as the Board of Directors of the Association shall determine from time to time to be desirable and as may be required by any Federal and State laws. 3. Premiums. Premiums upon insurance policies purchased by the Association shall be paid by the Association as a Common Expense, except that the amount of increase in the premium occasioned by use for other than aircraft storage, misuse, occupancy or abandonment of a Unit or its appurtenances or of the common elements by a Unit Owner shall be assessed against such Owner. No less than ten (10) days prior to the date when a premium is due, evidence of such payment shall be furnished by the Association to each lienholder listed in the roster of Lienholders. 4. Insurance Trustee. All insurance policies purchased by the Association shall be for the benefit of the Association and the Unit Owners and their mortgagees as their interest may appear, and shall provide that all proceeds covering property losses shall be paid to such bank in Montana with trust powers as may be designated as insurance trustee by the Board of Directors Declaration of S27 EXECUTIVE Condominium Page 17 of 23 of the Association., which trustee is herein referred to as the insurance trustee. The insurance trustee shall not be liable for payment of premiums nor for the renewal or the sufficiency of policies nor for the failure to collect any insurance proceeds. The duty of the insurance trustee shall be to receive such proceeds as are paid and hold the same in trust for the purposes elsewhere stated in this instrument and for the benefit of the Unit Owners, their mortgagees, and the Landowner. Provided, however, the Board may upon a loss or casualty that is minor in nature or amount choose not to use an insurance trustee. As used herein "minor" shall mean loss or destruction of less than ten percent (10%) of the total value of the Condominium project at the time of the occurrence. 5. Distribution of Proceeds. Proceeds of insurance policies received by the insurance trustee (or the Board in the case of a "minor" loss) shall be distributed to or for the benefit of the beneficial owners in the following manner: 5.1 Miscellaneous. Expenses of administration, insurance trustee and the construction or remodeling supervisor shall be considered as part of the cost of construction, replacement or repair. 5.2 Reconstruction or Repair. Any balance remaining shall be used for reconstruction and repair as hereafter provided. 5.3 Balance. Any balance remaining after any reconstruction or repair is complete, shall be distributed to the Association for the benefit of Unit Owners under Subparagraph 9.6, below. 6. Association as Agent. The Association is irrevocably appointed agent for each Unit Owner and for each holder of a mortgage or other lien upon a Unit and for each Owner of any other interest in the Condominium property to adjust all claims arising under insurance policies purchased by the Association and to execute and delivery of releases upon the payment of claims. 7. Benefit to Mortgagees. Certain provisions in Section IX entitled INSURANCE are for the benefit of mortgagees or trust indenture beneficiaries of leasehold condominium parcels, and all such provisions are covenants for the benefit of any mortgagees of a Unit and may be enforced by such mortgagee or beneficiary. S. Notice to Lienholders. The Association shall notify the holder of any first lien on any of the Units of the occurrence of any loss in excess of $10,000 within thirty (30) days of such loss, if such lienholder has requested such a notice in writing. 9. Reconstruction. 9.1 Any damage to the Building or a Unit shall be repaired if the Board determines the property to be tenantable after the casualty. If a Unit or Units are found by the Declaration of S27 EXECUTIVE Condominium Page 18 of 23 Board of Directors not to be tenantable after the casualty, the damaged property may at the Board's option be reconstructed or rebuilt, or if not, then the property shall be subject to the applicable provisions of the Unit Ownership Act. 9.2 Plans and Specifications. Any reconstruction or repair must be substantially in accordance with the plans and specifications for the original improvements, or if not, then according to the plans and specifications approved by not less than two-thirds (2/3) of the Unit Owners, including the Owners of all Units the plans for which are to be altered. Any such reconstruction not in accordance with the original plans and specifications must be set forth in an amendment to the Declaration, which amendment shall be prepared and filed of record in accordance with the provisions of such amended filing, more particularly set forth in Section VII and Section VIII, Subparagraph 1, hereinabove. 9.3 Responsibility. The responsibility for reconstruction or repair after casualty shall be the Association who shall work with the insurance trustee (except in the case of a "minor" repair) to carry out the provisions of this Article. 9.4 Assessments. If the proceeds of insurance are not sufficient to defray the estimated costs of reconstruction or repair for which the Association is responsible, or if at any time during such reconstruction or repair, or upon completion of such reconstruction or repair, the funds for the payment of the costs thereof are insufficient, assessments shall be made against all Unit Owners in sufficient amounts to provide funds to the payment of such costs. Such assessments shall be in proportion to each Owner's percentage of interest in the general common elements. 9.5 Construction Funds. The funds for payment of costs of reconstruction or repair after casualty, which shall consist of proceeds of insurance held by the insurance trustee (or the Board in the event of a "minor" loss) and funds collected by the Association from assessments against Unit Owners, shall be disbursed in the sound discretion of the trustee and according to the contract of reconstruction or repair, which contract must have the approval of the Board and the Landowner. 9.6 Surplus. It shall be presumed that the first monies disbursed in payment of costs of reconstruction and repair shall be from the insurance proceeds. If there is a balance in a construction fund after payment of all costs of the reconstruction and repair for which the fund was established, such balance shall be paid to the Association for the use and benefit of the Unit Owners. X. REMOVAL OR PARTITION — SUBDIVISION 1. The S27 EXECUTIVE CONDOMINIUM shall be removed from condominium ownership upon the expiration or earlier termination of the Ground Lease as provided in Section XIII, below. Declaration of S27 EXECUTIVE Condominium Page 19 of 23 The S27 EXECUTIVE CONDOMINIUM may otherwise only be removed from condominium ownership, and may only be partitioned or sold, upon compliance with each of the following conditions: 1.1 The Board of Directors of the Association must approve the plans of removal, partition or sale, including the details of how any partition or sale and the distribution of property and funds shall be accomplished. 1.2 The plan or removal, partition, subdivision, abandonment, termination or sale must be approved as provided in the Unit Ownership Act. If approval for any of the foregoing is not required by the Unit Ownership Act, then approval shall be required from at least two-thirds (2/3) of the Owners and the Landowner. Upon obtaining such approval, the Board shall be empowered to implement and carry out the plan of removal, partition, subdivision, abandonment, termination or sale. 1.3 No Unit may be divided or subdivided into a smaller Unit, nor any portion thereof sold or otherwise transferred, except as provided above. 1.4 This section shall not apply to the sale of individual condominium Units and shall not be considered as a right of first refusal. 1.5 The common elements of the S27 EXECUTIVE CONDOMINIUM shall not be abandoned, partitioned, subdivided, encumbered, sold or transferred without compliance with all of the above requirements. 1.6 Any such removal, partition, division, subdivision or other plan must be done in compliance with the Unit Ownership Act and any other applicable laws, rules and regulations. XI. REMEDIES All remedies provided for in this Declaration and Bylaws shall not be exclusive of any other remedies which may now be, or are hereafter, available to the parties hereto as provided for by law. XII. SEVERABILITY The provisions hereof shall be deemed independent and severable and the invalidity or partial invalidity or unenforceability of any one or more provisions shall not effect the validity or enforceability of any other provision hereof. Declaration of S27 EXECUTIVE Condominium Page 20 of 23 XIII. GROUND LEASE ALL OF THE RIGHTS, PRIVILEGES, OBLIGATIONS, COVENANTS AND PROMISES CONTAINED IN THIS DECLARATION AND THE BYLAWS ARE SUBJECT TO THE GROUND LEASE FROM THE LANDOWNER. TERMINATION OF THE GROUND LEASE SHALL AUTOMATICALLY, IF NOT SOONER TERMINATED, TERMINATE THE CONDOMINIUM REGIME, AT WHICH TIME ALL PROPERTY RIGHTS OF THE UNIT OWNERS IN AND TO THE CONDOMINIUM UNITS AND THE COMMON ELEMENTS SHALL TERMINATE AND REVERT BACK TO THE LANDOWNER. ANY UNPAID ASSESSMENTS OR CHARGES OWED TO THE OWNERS ASSOCIATION AND/OR THE UNIT OWNERS TO THE LANDOWNER SHALL NOT, HOWEVER, BE TERMINATED AND SHALL REMAIN AS THE OBLIGATION OF SUCH UNIT OWNERS OR THE OWNERS ASSOCIATION. FROM AND AFTER THE DATE OF TERMINATION OF THE GROUND LEASE THIS CONDOMINIUM DECLARATION AND THE BYLAWS FOR THE SAME SHALL CEASE TO BE OF ANY FURTHER FORCE AND EFFECT, AND THE ASSOCIATION WILL TAKE ANY STEPS AND RECORD ANY DOCUMENTS REASONABLY DEEMED REQUIRED BY THE UNIT OWNERSHIP ACT TO REMOVE THE BUILDING AND UNITS FROM THE CONDOMINIUM FORM OF OWNERSHIP. PAYMENTS ON THE GROUND LEASE SHALL BE CONSIDERED COMMON AREA EXPENSES. XIV. EXPANSION The Declarant is currently leasing from Landowner two (2) additional hangar buildings that are adjacent to the Building. Declarant has already converted one of the adjacent buildings into the S27 T-Hanger Condominium project which is managed and governed by the S27 T- Hanger Condominium Association. Declarant may in the future decide to convert the remaining building into a condominium form of ownership for light aircraft storage similar to the process used to develop the first two (2) condominium projects. If Declarant decides to convert such additional building into a condominium form of ownership, the Unit Owners will, at Declarant's request, waive any objection to including the additional building within the coverage of this Declaration and within the purview and governance of the Association and Bylaws. If Declarant records a separate declaration covering the expansion parcel, the Unit Owners will similarly at Declarant's request, waive any objections to coordinating the governance, management and maintenance of one or both of the additional buildings with this Property. The Declarant or the Board of Directors are authorized for and on behalf of all Unit Owners to prepare, sign and record a new declaration or an amended declaration for the purpose of accomplishing the expansion(s) and the joint management of the three projects. XV. MISCELLANEOUS 1. Utility and Structural Easements. In addition to the easement provided for in Section III, Section 2, above, easements are reserved through the Condominium Property as may Declaration of S27 EXECUTIVE Condominium Page 21 of 23 be required for utility service ducts — including water, sewer, power, telephone, natural gas and cable television, in order to serve the condominium adequately. Each Unit Owner is entitled to the benefit of the easements in this section and Section III, Section 2, in order to allow a Unit Owner to expand or enhance utility service to the Unit upon approval of the Association. 2. Right of Access. The Association shall have the irrevocable right, to be exercised by the Manager or Board designee, to have access to each Unit from time to time during reasonable hours as may be necessary for the maintenance, repair or replacement of any of the common elements therein or accessible therefrom or for making emergency repairs therein necessary for the maintenance, repair or replacement of any of the common elements therein necessary to prevent damage to the general or limited common elements or to any Unit. Damage to the interior or any part of the Unit resulting from maintenance, repair, emergency repair or replacement of any of the general or limited common elements or as a result of an emergency repair within another Unit at the instance of the Association shall be designated either limited or general common expense by the Association and assessed in accordance with such designation. 3. Expenditures. Except as approved in the annual budget, no single expenditure or debt in excess of $5,000 may be made or incurred by the Association or Manager without the prior approval of a majority of the Unit Owners. 4. Benefit. Except as otherwise provided herein, this Declaration shall be binding upon and shall insure to the benefit of the Declarant, the Association and each Unit Owner, and the heirs, personal representatives, successors and assigns of each. 5. Service of Process. The name and address of the person to receive service of process for the S27 EXECUTIVE CONDOMINIUM until another designation filed of record shall be: Todd Berg 2216 Missoula Avenue Missoula, MT 59802 6. A first lienholder, upon request, will be entitled to written notification from the Association of any default in the performance by an individual Unit Owner subject to such lien of any obligation under the condominium documents which is not cured within sixty (60) days. 7. First lienholders shall have the right to examine the books and records of the Association and any Manager for the Condominium Project at reasonable times and upon reasonable advance notice. 8. The Declarant expressly makes no warranties or representations concerning the property, the Units, the Declaration, the Bylaws or deeds of conveyance except as specifically set forth therein and no one may rely upon such warranty or representation not so specifically Declaration of S27 EXECUTIVE Condominium Page 22 of 23 expressed therein. Estimates of common expenses are deemed to have been made in good faith, but no warranty or guaranty is made or is intended, nor may one be relied upon. IN WITNESS WHEREOF, the Declarant has caused this Declaration to be made and executed according to the provisions of the Montana Unit Ownership Act, Montana Code Annotated § 70-23-101 et seq. STATE OF MONTANA M1 County of Missoula DECLARANT: T & L PROPERTIES, LLP a Montana limited liability partnership an Todd Berg, Auted Partner The foregoing instrument was acknowledged before me on January Via? , 2007, by TODD BERG, Authorized Partner of T & L Properties, LLP. F ?Ydi3T4ItI1sL`: NOTARY PUBUG-MONTANA SEAL. € Rngat Ia,PAontana r,,,pFgPh ` MY C-- &*,s Mar. 6, 2010 WITNESS my hand and official seal. Printed Name U NOTARY PUBLIC FOR THE STATE OF MT Residing at Commission Expires Declaration of S27 EXECUTIVE Condominium Page 23 of 23 Ay cc Z x xr. Ct� s1 oot oot CA m I�-��il III I . I I/ II lio m 0 � � eQze 2sn kg gn���xx"�sn a p`p ��z cgo-, Bryn = I bdmH"eR�z ��q�s'��tE cn¢q�et e A ll g cia�iL;'Ss�o^ �a- �C;c9a� mbm�sgx�• oz�r� : ill g ,.� �s;s a�• �r�,��sts ti aka-��V�ao� � �> a;sR'wxz;;Gs2oa'i€46� n i t27 �y' � �z nG �T•7"sa .b �z M"s_cp`,s G4 bn :���s¢ �Ro "_min �4ow _ao�€n•zpo� �$�, .°zs 'ax�non sy� 9;d :� ��-ca�s•c�e SRN > m z§ {