Hilton Garden Inn Landlord's Consent & Estoppel CertficateLANDLORD'S CONSENT & ESTOPPEL CERTIFICATE
This Certificate is made and entered into this �y of November, 2006, by the CITY OF
KALISPELL ("Landlord") to INTERVEST-MORTGAGE 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 Hotels, 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 31, 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 1 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:
CERTIFICATE
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.
(c) The Lease term commenced November , 2006. The term of the Lease
terminates on November , 2105.
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(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 shall 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 indirectly from Landlord's environmental
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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
State of�r
ss.
County of .
I certifythat I know or have satisfactory evidence that`���--
rY
personally appeared before me, and on oath stated that he/she was authorized to execute the
instrument and acknowledged it, as CA' '— �0,v-kaL e of City of Kalispell, to be the free and
voluntary act of such entity, for the uses ana purposes mentioned in the instrument.
DATED:'-006.
F
Print Name. ��..
NOTARY PUBLIC in and fo the State
of. residing at
My appointment expires: t o� 'Dr-pn
GAWntmc-st 81312W alispell Hotel 9781E.st Cert.wpd
EXI3IBIT "A"
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 S5644'00"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 S 56 ° 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° 1 F38"E a distance of 65.00 feet to the
point of beginning.
Tract 2:
Beginning 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 5 07 , 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 N3 3 " 1613 "W a distance of 149.72 feet to a point
on the South boundary of Lot 1 A of the resubdivi lion 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 I 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 S 33 " 1613 "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 N3 3 ° 1613 "W a distance of 7 2.7 1 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 N3 3 ° 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 paint on the West boundary of said Tract 1; thence S33 ° 16'13"W a distance of 144.59
feet to the point of beginning.
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