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Irrevocable Letter of Credit for Construction of Cherry Lane Golf Course Club HouseSeptember 10, 1999 Mayor Bob Come City of Meridian 33 E. Idaho Meridian, Idaho 83642 Dear Mayor Corrie: 93 1 D" I I N' 101 \@� AINIW�Iff 979))&V j M�j 6� PcElvED SEP 1 3 1999 CITY OF MERIDUN Attached to this letter is our Irrevocable Letter of Credit No. 50004, for Cherry Lane Recreation, Inc. in favor of the City of Meridian. This Letter of Credit is for the construction of the new clubhouse at Cherry Lane Golf Course. This Letter of Credit will become effective upon the City signing the Acceptance of Lessor section of the attached Leasehold Deed of Trust. Once you sign the attached Leasehold Deed of Trust, and have it attested by the City Clerk, please give me a call and I will be happy to come over and pick it up. Thanks for Your Cooperation, / J Gerry Mattison V. P. & Manager 113 East Idaho Avenue, Post Office Box 1178, Meridian, Idaho 83680-1178 (208) 288-0810 is Fax (208) 288-0805 BENEFICIARY 1000 ]EP ENDlE1edT IBS 317 North 9th Street Boise, Idaho 83702 CITY OF MERIDIAN (208) 343-5565 "LENDER" AbbsEss 33 EAST IDAHO AVENUE MERIDIAN, IDAHO 83642 TELEPHONE NO. IDENTIFICATION No.:. 208-888-4433 CUSTOMER TEXpIgA CHERRY LANE RECREATION, INC. ADDRESS ' 4200 W. TALAMORE MERIDIAN, ID 83642 TELEPHONE NO. IDENTIFICATION No - 208 -888-4080 82-0344330 IRREVOCABLE LETTER OF CREDIT NO.: 50004 This Letter of Credit shall expire upon the earlier of: 1. the close of business on JANUARY 22, 2000 and all drafts and accompanying statements or documents must be presented to Lender on or before that time; or 2. the day that Lender honors a draw under which the full amount of this Letter of Credit is drawn. Lender indicated above ("Lender") hereby establishes at the request and for the account of Customer an Irrevocable Letterof Credit in favor of Beneficiary for a sum or sums not exceeding the aggregate amount ofFIVE HUNDRED THOUSAND AND NO/100 Dollars ($ 500, 000.00 ), These funds shall be made available to Beneficiary against Lender's receipt from Beneficiary of drafts drawn at sight on Lender at its address indicated above (or such other address that Lender may provide Beneficiary with written notice of in the future) during regular business hours and accompanied by the signed written statements or documents indicated below. WARNINGTO BENEFICIARY: PLEASE EXAMINE THIS LETTER OF CREDITAT ONCE. IF YOU FEEL UNABLE TO MEET ANY OF ITS REQUIREMENTS, EITHER SINGLY OR TOGETHER, YOU SHOULD CONTACT YOUR CUSTOMER IMMEDIATELY TO SEE IF THE LETTER OF CREDIT CAN BE AMENDED. OTHERWISE,YOU WILL RISK LOSING PAYMENT UNDER THIS LETTER OF CREDIT FOR FAILURE TO COMPLY STRICTLY WITH ITS TERMS AS WRITTEN. 1. DRAFT TERMS AND CONDITIONS Lender shall honor the drafts submitted by Beneficiary under the following terms and conditions: SEE ATTACHMENT "A" Upon Lender's honor of such drafts and payment to the Beneficiary, Lender, once the full amount of credit available under this Letterof Credit has been drawn, shall be fully discharged of its obligations under this Letterof Credit and shall not thereafterbe obligated to make any further payments under this Letterof Credit in respect of such demand for payments to Beneficiaryor any other person. If a non -conforming demand is made, Lender shall notify Beneficiary of its dishonor on or before the time mentioned in Section 5 below. Beneficiary shall have no recourse against Lender for any amount paid under this Letterof Credit after Lender honors any draft or other document which complies strictly with this Letterof Credit, and which on its face appears otherwise in order but which is signed, issued, or presented by any party or under the name of any party purporting to act for Beneficiary, purporting to claim through Beneficiary, or posing as Beneficiary. By paying to Beneficiary an amount demanded in accordance with this Letterof Credit, Lender makes no representation as to the correctness of the amount demanded and Lender shall not be liable to Beneficiaryor any other person for or in respect to any amount so paid or disbursed for any reason whatsoever, including, without limitation, any nonapplication or misapplication by Beneficiary of the proceeds of such payment. By presenting upon Lender or a confirming bank, Beneficiary certifies that Beneficiary has not and will not present upon the other, unless and until Beneficiary meets with dishonor. Beneficiary promises to return to Lender and confirm any funds received by Beneficiary in excess of the Letter of Credit's maximum drawing amount. 2. USE RESTRICTIONS All drafts must be marked "DRAWN UNDER IDAHO INDEPENDENT BANK IRREVOCABLE LETTER OF CREDITS SEPTEMBER 9, 1999 ", and the amount of each draft shall be marked on the draft. Only Beneficiaryor Beneficiary's Transferee (only if transferable) may complete a draft and accompanying statements or documents required by this Letterof Credit and make a draw under this Letter of Credit. This original Letter of Credit must accompany any draft drawn hereunder. Partial draws ❑% are permitted ❑ are not permitted under this Letter of Credit. Lender's honor of a partial draw shall correspondingly reduce the amount of credit available under this Letterof Credit. Following a partial draw, Lender shall return this original Letterof Credit to Beneficiarywith the partial draw noted thereon; in the alternative, and in its sole discretion, Lender may issue a substitute Letter of Credit to Beneficiary in the amount shown above less any partial draw(s). PERMITTED TRANSFEREES ❑ This Letter of Credit may be transferred by Beneficiary upon providing Lender with prior written notice of the transfer. The Transferee shall be deemed the new Beneficiary of this Letter of Credit and the documents of the Transferee, including drafts required under this Letter of Credit, are to be processed by Lender (or any intermediary) without the original Beneficiary's intervention and without any further responsibility on Lender's part to the original Beneficiary. © The right to draw under this Letter of Credit shall be nontransferable, except for: A. A transfer (in its entirety, but not in part) by direct operation of law to the original Beneficiary's administrator, executor, bankruptcy trustee, receiver, liquidator, successor, or other representatives at law; and B. The first immediate transfer (in its entirety, but not in part) by such legal representative to a third party after express approval of a governmental body (judicial, administrative, or executive). LP-ID602 O FormAtion Technologies, Inc. (12/17/93) (800)937-3799 4. TRANSFEREE'S REQUIRED DOCUMENTS When the presenter is a permitted Transferee under paragraph 3 above, the documents required for a draw shall include: A. All documents required elsewhere in this Letter of Credit, except that such documents may be in the name of either the original Beneficiary or the presenter permitted by paragraph 3; and B. When the presenter is a permitted Transferee under paragraph 3.A or a third party under 3.13, a certified copy of the one or more documents which show the presenter's authority to claim through or to act with authority for the original Beneficiary. 5. TIMING OF DISHONOR Under no circumstances shall Lender be precluded from relying upon any reason for dishonor given in a communication which Beneficiary or the presenter receives within three (3) Banking Days after Lender has received the last document forming part of Beneficiary's presentment (the "Three-DayPeriod"). Lender shall be entitled to rely upon any such reason without regard to either (i) the timing of any presentment made before the Expiry Date, or (ii) the timing inside the Three -Day Period of any preliminary communication(s) from Lender concerning the dishonor decision itself or any reason for dishonor. For any such reason so given during the Three -Day Period, Lender shall be conclusively deemed to have met the "reasonable time", "without delay", and other timing requirements as the UCP (as hereafter define) may impose. The Expiry Date shall not be extended to accommodate a presentment made with less than three (3) Banking Days to go before the Expiry Date, and Beneficiary shall not be entitled to submit a draw request or provide Lender with any documents in support of a draw after the expiration date hereof. Nor shall Lender ever be required to communicate a dishonor decision or its reasons within a time less than the Three -Day Period. "Banking Day" shall mean any day on which commercial banks located in the state of Lender's address are either not authorized or are not required to close. 6. COMPLIANCE BURDEN Under no circumstances shall Lender be held responsible for any impossibility or other difficulty in achieving strict compliance with the requirements of this Letterof Credit precisely as written. Beneficiary understands and acknowledges: (i) that unless and until the present wording of this Letter of Credit is amended with Lender's prior written consent, the burden of complying strictly with such wording remains solely upon Beneficiary; and (ii) that Lender is relying upon the lack of such amendment as constituting Beneficiary's initial and continued approval of such wording. 7. NON -SEVERABILITY If any aspect of this Letterof Credit is ever declared unenforceable for any reason by any court or governmental body having jurisdiction, Lender's entire engagement under this Letter of Credit shall be deemed null and void ab initio, and both Lender and Beneficiary shall be restored to the position each would have occupied with all rights available as though this Letter of Credit had never occurred. This non -severability provision shall override all other provisions in this Letter of Credit, no matter where such provision appears within the Letter's body. 8. CHOICE OF LAW/JURISDICTION The Uniform Customs and Practice for Documentary Credits, 1993 Revision, ICC Publication No. 500, (hereaftercalled the "UCP") shall in all respects be deemed a part hereof as fully as if incorporated herein and shall apply to this Letterof Credit. This Agreement shall be governed by and construed in accordance with the laws of the State of IDAHO United States of America, except to the extent such laws are inconsistent with the UCP. Lender and Beneficiary consent to the jurisdiction and venue of any court located in the State of IDAHO in the event of any legal proceeding under this Letter of Credit. *7JMMA Lender hereby agrees with Beneficiary that drafts drawn under and in compliance with the terms of this Letter of Credit will be duly honored if presented to the Lender on or before the Expiration Date. Dated: SEPTEMBER 9, 1999 LENDER: IDAHO INDE TITLE: VICE PRESI ENDORSEMENT OF DRAFTS DRAWN: Amount Amount Date Negotiated By In Words In Fiaure LP-ID602 © FormAtion Technologies, Inc. (12/17/93) (800) 937-3799 Idaho Independent Bank Irrevocable Letter of Credit No. 50004 Attachment "A" Beneficiary's statement purportedly signed by an authorized individual certifying the following: A) Cherry Lane Recreation, Inc. has failed to substantially complete construction of the permanent clubhouse and parking lot as per plans and specifications submitted to the City of Meridian under the building permit application dated August J � f 1999. B) Statement to identify the exact items not satisfactorily completed and an estimate of the related expense to complete. C) Completion of these items has previously been demanded of Cherry Lane Recreation, Inc. Drafts will not exceed the remaining cost to complete the clubhouse and parking lot per the plans and specifications referenced above. Furthermore, and as an additional limitation to that set forth in the preceding sentence, the maximum aggregate amount of this letter of credit, which is in the initial maximum amount of $500,000.00 shall be reduced by all sums advanced by Lender to Customer under that certain Variable Rate Commercial Revolving or Draw Note made of even date herewith in the original principal sum of $400,000.00.