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Lakeview Golf Course Lease Agreement 05-31-06ADA COUNTY RECORDER J. DAVID NAVARRO AMOUNT .00 24 - BOISE IDAHO 07/06/06 02:03 PM DEPUTY Pail! Thompson ' RECORDED—REQUEST OF li 1 1!111 !!1 III1I City of Meridian Public Warks 1061 08232 AGREEMENT THIS AGREEMENT is made as of the 3 / 'day of May, 2006, by and between the City of Meridian, Idaho, a municipal corporation (hereinafter referred to as "City"); R.R. Davis Properties, Inc., an Idaho corporation, and Lakeview Meridian Investors, LLC, an Idaho limited liability company (hereinafter collectively referred to as "Lessee"); and Idaho independent Bank, a banking corporation organized and existing under the laws of the State of Idaho (hereinafter referred to as "Bank"). RECITALS: A. City and Lessee previously entered into an AMENDED LEASE AGREEMENT FOR THE PROVISION OF GOLF COURSE OPERATIONS AT CITY OF MERIDIAN'S MUNICIPAL GOLF COURSE dated May 17, 2005 (hereinafter referred to as the "Lease"). B. Lessee has requested a loan and other financial accommodations from Bank to which the Bank is willing to provide to Lessee upon certain conditions, which conditions include the Lessee's grant of a security interest in Lessee's leasehold interest in .the Lease by the execution of a Leasehold Deed of Trust in the form as attached hereto as Exhibit "A" which is incorporated by this reference (hereinafter "Deed of Trust"). C. Lessee intends to use the funds received from Bank's loan to pay for improvements upon the real property which is subject to the Lease. D. Section 9, Paragraph F, of the Lease provides in part that "Lessee shall not, without the prior written consent of the City assign, hypothecate, or mortgage this Agreement, or sublease or sublicense any portion of the premises, which consent shall not be unreasonably withheld". E. City acknowledges that it will benefit from the improvements constructed or to be constructed upon the City's real property subject to the Lease as a result of Bank's loan to Lessee. NOW THEREFORE, In consideration of the covenants and conditions set forth herein, the parties agree as follows: 1. Incomoration of Recitals. The parties agree -that the foregoing Recitals are contractual and binding and are incorporated herein as if set forth in full. . AGREEMENT Page 1 of 8• 2. Consent to Lessee's Grant of Security. City hereby agrees and consents to Lessee's grant of a security interest in Lessee's leasehold interest in the Lease to Bank by way of Lessee's execution of the Deed of Trust as security for Bank's loan to Lessee. 3. City to Provide Notice of Modification. to Lease. During the entire term of the Deed of Trust, City agrees that no modification of the Lease shall occur without City first providing Bank, in Writing, at least ninety (90) days prior to the effective date of such modification, of City's intent to modify the Lease. 4. Cit -to Provide Notice of Lessee's Default. In the event of any default by Lessee under the terms of the Lease, City agrees to notify Bank of such default in writing at lease thirty (30) days prior to City taking any action to enforce any of City's rights under the Lease. During such above-described thirty -day notice period, Bank shall have the option to cure the default or to take such other action as may be necessary to protect the Bank's security interest in the Lease resulting from the Deed of Trust or any other agreement between Bank and Lessee. 5. Purchase Option to City in Event of Foreclosure. In the event Bank shall foreclose Lessee's interest in the Lease pursuant to the terms of the Deed of Trust, Bank agrees that City shall have the exclusive first right to purchase Bank's interest in the Lease (including all other collateral pledged by Lessee as security for Bank's loan) by tendering to Bank an amount equal to the total amount then owing to Bank by Lessee, together with all costs, expenses, attorney's fees, and other fees of the Bank. In the event City shall exercise its option as provided herein, the City shall deliver the option price in cash or certified funds to Bank no later than 3:00 p -m., Mountain Standard time, at least one (1) business day prior to the date of any scheduled foreclosure sale. In the event Bank shall commence foreclosure under the Deed of Trust, the Bank shall provide City with written notice the foreclosure and the date thereof. City may file a request for a copy of a notice of default or notice of sale, pursuant to Idaho Code § 45-1591, and the Bank shall provide City with the necessary information concerning the recording of the Deed of Trust to enable City to file such a request. In the event of a foreclosure by Bank, Bank shall also cause City to receive notice in the manner provided for in Idaho Code § 45-1505 at the address herein provided even in the event City shall fail to record a request for notice. 6. Lessee's Use of Funds Received from Bank. Lessee represents to City that funds received from any loan from Bank which is secured by the Deed of Trust will be used exclusively to pay for the construction, renovation, repair or replacement of improvements upon the real property which is subject to the Lease. 7. General Provisions. AGREEMENT Page 2 of 8 7.1 Litigation Between the Parties. In the event of any litigation between the parties concerning this Agreement, except for an agreed declaratory judgment action sought to clarify the responsibility and/or authority of the parties hereunder, the unsuccessful party in such litigation shall fully reimburse the prevailing party for all reasonable costs and expenses, including reasonable attorney's fees, incurred in such litigation. 7.2 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Idaho. 7.3 Titles and Headings. Titles and headings to articles, sections, or paragraphs of this Agreement are inserted for convenience of reference and are not. intended to affect the interpretation or construction of this Agreement. 7.4 Notices. Any notice under this Agreement shall be in writing and shall be treated as duly delivered if the same is personally delivered to the other party or deposited in the United States Mail, certified, return receipt requested, postage. prepaid, and properly addressed as follows: CITY: City of Meridian Attn: City Clerk 33 E. Idaho Meridian, Idaho 83642 LESSEE: Lakeview Meridian Investors, LLC R.R. Davis Properties, Inc. 4244 W. Talamore Meridian, Idaho 83642 BANK. Idaho Independent Bank 113 E. Idaho Meridian, Idaho 83642 7.5 Authority of the Parties. Each party- to this Agreement represents and warrants that the execution, delivery, and performance of this Agreement has been duly authorized by all necessary action of such party and is a valid and binding obligation upon the persons or entity signing this Agreement. 7.6 No Assignment. No party may assign this agreement or any interest therein. 7.7 Representation. This Agreement was drafted by the attorney for Bank as matter of convenience only and shall not be construed for or against any party on that account. 7.8 Entire Agreement. This Agreement constitutes the entire agreement among the parties to it and supersedes any prior understanding or agreement. AGREEMENT page 3 of 8 7.9 Execution in Counterparts. This Agreement may be executed in several counterparts, each of which shall be deemed an original and all of which shalt constitute the same instrument. 7.10 Successors and Assi ns. This Agreement shall inure to the benefit of and shall be binding upon the parties hereto and their respective successors and, if permitted, assigns. 7.11 Recordation of Agreement. City or Bank shall have the right to record this Agreement or a memorandum thereof, provided they provide a copy of such recording to the remaining parties. IN WITNESS WHEREOF, the parties have executed this Agreement on the dates set forth below. CITY: CITY OF MERIDIAN �ti,rsttt rr,irJf MAYqRr deWE,EI Attest: WILLIAM G. BERG, .1R., C y�Qlerk LESSEE: R.R. DAVIS PROPERTIES, INC. ichard R. Davis,A-oPresident Dated: 6 -2.Z -off AGREEMENT Page of 8 LAKEVIEW MERIDIAN INVESTORS, LLC By: OAAS LANEY, LLC, a Member 13 A. By: LANEYLAND, L.P., a Member Partner By: / ':"R. DAVIS PROPERTIES, I , a Member By:� Richard R. Davis, President Dated: -� BANK: IDAHO INDEPENDENT BANK GERALD MATTI - -. -. STATE OF IDAHO ) ) ss. County of Ada ) On the day of May, 2006, before me, the undersigned, a Notary Public in and for said State, personally appeared Tammy DeWeerd and William G. Berg, Jr., known or identified to me to be the Mayor and Clerk, respectively, of the City of Meridian, who executed the within and foregoing instrument on behalf of said City, and acknowledged to me that such City executed the same. AGREEMENT Page 5 of 8 IN WITNESS WHEREOF, I have hereunto affixed my official seal the day and year first above written. Notary Public for Idaho Residing at , Idaho My Commission Expires: STATE OF IDAHO ) )ss' County of Ada ) On the 3 1 slay of May, 2006, before me, the undersigned, a Notary Public in and for said State, personally appeared Richard R. Davis, known or identified to me to be the President of R.R. Davis Properties, Inc., the person who executed the within and foregoing instrument on behalf of said corporation, and acknowledged to me that such corporation -executed the same. IN WITNESS WHEREOF, I have hereunto ed my official seal the day and year first above written. STATE OF IDAHO County of Ada V )4'Po0 ) ss. } N aryr ublic for Idafrro Residing at ceZs0 -9rf ,Idaho f My Commission Expires: S t ?- lI On the day of May, 2006, before me, the undersigned, a Notary Public in and for said State, personally appeared T. ErW Oaas, known or identified to me to be the Manager of Oaas Laney, LLC, the person who executed the within and foregoing instrument on behalf of said limited liability company, and acknowledged to me that such limited liability company executed -the same as a Member of Lakeview Meridian Investors, LLC. 1N WITNESS WHEREOF, I have her to a i ed my official seal the day and year first above written. KIMBERLY CLARKE 3Notary Public r ate of Idaho Notary Public f Idaho Residing at , Idaho My Commission Expires: - AGREEMENT Page 6 of 8 STATE OF IDAHO ) ) ss. County of Ada ) On the'3/�ay of May, 2006, before me, the undersigned, a Notary Public in and for said State, personally appeared Steven Laney, known or identified to me to be the General Partner of Laneyland, L.P., the person who executed the within and foregoing instrument on behalf of said limited partnership, and acknowledged to me that such limited partnership executed the same as a Member of Lakeview Meridian Investors, LLC. IN WITNESS WHEREOF, I have hereunto aff ed my official seal the day and year first above written. T. No# ry ` ublic for Idaho OT. Residing at t ! , Idaho My Commission Expires: 5 -- STATE OF IDAHO •ff�' 1-E 0 r 1� County of Ada ) On the 3/ day of May, 2006, before me, the undersigned, a Notary Public in and for said State, personally appeared Richard R. Davis, known or identified to me to be the President of R.R. Davis Properties, Inc., the person who executed the within and foregoing instrument on behalf of said corporation, and acknowledged to me that such corporation executed the same as a Member of Lakeview Meridian Investors, LLC. IN WITNESS WHEREOF, I have hereunto affixed my official seal the day and year first above STATE OF IDAHO ) ss. County of Ada } No ry P lie- for Ida o Residing at —,Idaho My Commission Expires: S= It - 4 -Ir t s On the 3/ day of May, 2006, before me, the undersigned, a Notary Public in and for said State, personally appeared Gerry W. Mattison, known or identified to me to be the Vice President of Idaho Independent Bank, the person who executed the within AGREEMENT Page 7 of 8 and foregoing instrument on behalf of said corporation, and acknowledged to me that such corporation executed the same. IN WITNESS WHEREOF, I have hereunto affixed my official seal the day and year first above writtegp,.. o o, _ I�111111 d III Notary Public for Idaho Residing at A�La CD7&-rcUj , Idaho My Commission Expires: io -2-7 o AGREEMENT Page 8 of 8 RECORDATION REOUESTED BY: IDAHO INDEPENDENT BANK MERIDIAN OFFICE 113 EAST IDAHO AVENUE MERIDIAN, ID 63642 WHEN RECORDED MAIL TO: IDAHO INDEPENDENT BANK MERIDIAN OFFICE 113 EAST IDAHO AVENUE MERIDIAN, ID 83642 SEND TAX NOTICES TO: LAKEVIEW MERIDIAN INVESTORS, LLC R.R. DAVIS PROPERTIES, INC. 4200 W. TALAMORE BLVD. MERIDIAN ID 83642 SPACE ABOVE THIS LINE IS FOR RECORDER'S USE ONLY LEASEHOLD DEED OF TRUST MAXIMUM LIEN. The lien of this Deed of Trust shall not exceed at any one time $649,759.84. THIS DEED OF TRUST is dated May 17, 2006, among LAKEVIEW MERIDIAN INVESTORS, LLC AND R.R. DAVIS PROPERTIES, INC., whose address is 4200 W. TALAMORE BLVD., MERIDIAN, ID 83642 ("Grantor"); IDAHO INDEPENDENT BANK, whose address is MERIDIAN OFFICE, 113 EAST IDAHO AVENUE, MERIDIAN, ID 83642 (referred to below sometimes as "Lender" and sometimes as "Beneficiary"); and PIONEER TITLE COMPANY OF ADA COUNTY, whose address is 8151 W. RIFLEMAN AVENUE, BOISE, ID 83704 Ireferred to below as "Trustee"). CONVEYANCE AND GRANT. For valuable consideration, Grantor does hereby irrevocably grant, bargain, sell and convey in trust, with power of sato, to Trustee for the benefit of Lender as Beneficiary, all of Grantor's right, title, and interest in, to and under the Lease described below of the following described real property, together with all existing or subsequently erected or affixed buildings, improvements and fixtures; all easements, rights of way, and appurtenances; all water, water rights and ditch rights (including stock in utilities with ditch or irrigation rights); and all other rights, royalties, and profits relating to the real property, including without limitation any rights Grantor later acquires in the fee simple title to the land, subject to the Lease, and all minerals, oil, gas, geothermal and similar matters, (the "Real Property") located in ADA County, State of Idaho: See EXHIBIT "A", which is attached to the Deed of Trust and made a part of this Deed of Trust as If fully set forth herein. THIS DEED OF TRUST INCLUDES ALL OF THE LESSEE'S INTEREST IN THAT PROPERTY DESCRIBED ABOVE UNDER THE LEASE AGREEMENT ORIGINALLY DATED MAY 17, 2005 BETWEEN THE CITY OF MERIDIAN AS LESSOR AND LAKEVIEW MERIDIAN INVESTORS, LLC AND R.R. DAVIS PROPERTIES, INC. AS LESSEES. The Real Property or its address Is commonly known as 4200 W. TALAMORE BLVD., MERIDIAN, ID 83642. CROSS -COLLATERALIZATION. In addition to the Note, this Deed of Trust secures all obligations, debts and liabilities, plus interest thereon, of Grantor to Lender, or any one or more of them, as well as all claims by Lender against Grantor or any one or more of them, whether now existing or hereafter arising, whether related or unrelated to the purpose of the Note, whether voluntary or otherwise, whether due or not due, direct or indirect, determined or undetermined, absolute or contingent, liquidated or unliquidated, whether Grantor may be liable individually or jointly with others, whether obligated as guarantor, surety, accommodation party or otherwise, and whether recovery upon such amounts may be or hereafter may become barred by any statute of limitations, and whether the obligation to repay such amounts may be or hereafter may become otherwise unenforceable. Grantor presently assigns to Lender (also known as Beneficiary in this Deed of Trust) ail of Grantor's right, title, and interest in and to all present and future teases of the Property and all Rents from the Property. In addition, Grantor grants to Lender a Uniform Commercial Code security interest in the Personal Property and Rents. THiS DEED OF TRUST, INCLUDING THE ASSIGNMENT OF RENTS AND THE SECURITY INTEREST IN THE RENTS AND PERSONAL PROPERTY, IS GIVEN TO SECURE (A) PAYMENT OF THE INDEBTEDNESS AND (B) PERFORMANCE OF ANY AND ALL OBLIGATIONS UNDER THE NOTE, THE RELATED DOCUMENTS, AND THIS DEED OF TRUST. THIS DEED OF TRUST IS GIVEN AND ACCEPTED ON THE FOLLOWING TERMS: PAYMENT AND PERFORMANCE. Except as otherwise provided in this Deed of Trust, Grantor shall pay to Lender all amounts secured by this Deed of Trust as they become due, and shall strictly and In a timely manner perform all of Grantor's obligations under the Note, this Deed of Trust, and the Related Documents. POSSESSION AND MAINTENANCE OF THE PROPERTY. Grantor agrees that Grantor's possession and use of the Property shall be governed by the following provisions: Possession and Use. Until the occurrence of an Event of Default, Grantor may (1) remain in possession and control of the Property; (2) use, operate or manage the Property; and (3) collect the Rents from the Property. The following provisions relate to the use of the Property or to other limitations on the Property. THE REAL PROPERTY EITHER IS NOT MORE THAN FORTY (40) ACRES IN AREA OR IS LOCATED WITHIN AN INCORPORATED CITY OR VILLAGE. Duty to Maintain. Grantor shall maintain the Property in tenantable condition and promptly perform all repairs, replacements, and maintenance necessary to preserve its value. Compliance With Environmental Laws. Grantor represents and warrants to Lender that: (1) During the period of Grantor's leasehold interest in the Property, there has been no use, generation, manufacture, storage, treatment, disposal, release or threatened release of any Hazardous Substance by any person on, under, about or from the Property; (2) Grantor has no knowledge of, or reason to believe that there has been, except as previously disclosed to and acknowledged by Lender in writing, (a) any breach or violation of any Environmental Laws, (b) any use, generation, manufacture, storage, treatment, disposal, release or threatened release of any Hazardous Substance on, Under, about or from.the Property by any prior owners or occupants of the Property, or (c) any actual or threatened litigation or claims of any kind by any person relating to such matters; and (3) Except as previously disclosed to and acknowledged by Lender in writing, (a) neither Grantor nor any tenant, contractor, agent or other authorized user of the Property shall use, generate, manufacture, store, treat, dispose of or release any Hazardous Substance on, under, about or from the Property; and (b) any such activity shall be conducted in compliance with all applicable federal, state, and local laws, regulations and ordinances, including without limitation all Environmental Laws. Grantor authorizes Lender and its agents to enter upon the Property to make such inspections and tests, at Grantor's expense, as Lender may deem appropriate to determine compliance of the Property with this section of the Deed of Trust. Any inspections or tests made by Lender shall be for Lender`s purposes only and shall not be construed to create any responsibility or liability on the part of Lender to Grantor or to any other person. The representations and warranties contained herein are based on Grantor's due diligence in investigating the Property for Hazardous Substances. Grantor hereby (t) releases and waives any future claims against Lender for indemnity or contribution in the event Grantor becomes liable for cleanup or other costs under any such laws; and (2) agrees to indemnity and hold harmless Lender against any and all claims, losses, liabilities, damages, penalties, and expenses which Lender may directly or indirectly sustain or suffer resulting from a breach of this'seetion of the Deed of Trust or as a consequence of any use, generation, manufacture, storage, disposal, release or threatened release occurring prior to Grantor's ownership or interest in the Property, whether or not the same was or should have been known to Grantor. The provisions of this section of the Dead of Trust, including the obligation to indemnify, shall survive the payment of the Indebtedness and the satisfaction and reconveyance of the lien of this Deed of Trust and shall not be affected EXHIBIT "Ars DEED OF TRUST Loan No: 5590258 (Continued) Page 2 by Lender's acquisition of any interest in the Property, whether by foreclosure or otherwise. Nuisance, Waste. Grantor shalt not cause, conduct or permit any nuisance nor commit, permit, or suffer any stripping of or waste on or to the Property or any portion of the Property. Without limiting the generality of the foregoing, Grantor will not remove, or grant to any other party the right to remove, any timber, minerals {including oit and gas), coal, clay, scoria, soil, gravel or rock products without Lender's prior written consent. Removal of Improvements. Grantor shall not demolish or remove any Improvements from the Real Property without Lender's prior written consent. As a condition to the removal of any Improvements, Lender may require Grantor to make arrangements satisfactory to Lender to replace such Improvements with Improvements of at least squat value. Lender's Right to Enter. Lender and Lender's agents and representatives may enter upon the Real Property at all reasonable times to attend to Lender's interests and to inspect the Real Property for purposes of Grantor's compliance with the terms and conditions of this Dead of Trust. Compliance with Governmental Requirements. Grantor shall promptly comply with all laws, ordinances, and regulations, now or hereafter in effect, of all governmental authorities applicable to the use or occupancy of the Property, including without limitation, the Americans With Disabilities Act. Grantor may contest in good faith any such law, ordinance, or regulation and withhold compliance during any proceeding, including appropriate appeals, so long as Grantor has notified Lender in writing prior to doing so and so long as, in Lender's sole opinion, Lender's interests in the Property are not jeopardized. Lender may require Grantor to post adequate security or a surety bond, reasonably satisfactory to Lender, to protect Lender's interest. Duty to Protect. Grantor agrees neither to abandon or leave unattended the Property. Grantor shall do all other acts, in addition to those acts set forth above in this section, which from the character and use of the Property are reasonably necessary to protect and preserve the Property. Compliance with Lease. Grantor will pay all rents and will strictly observe and perform on a timely basis all other terms, covenants, and conditions of the Lease. Grantor will indemnity and hold Lender harmless against all losses, liabilities, actions, suits, proceedings, costs including reasonable attorneys' fees claims, demands, and damages whatsoever which may be incurred by reason of Grantor's failure to pay rents or strictly observe or perform under the Lease, Other Agreements Relating to the Lease. Grantor further agrees (1) not to surrender, terminate, or cancel the Lease, and (2) not to modify, change, supplement, alter, or amend the Lease, either orally or in writing, without Lender's prior written consent. Any attempt by Grantor to do any of the foregoing without Lender's prior written consent will be void and of no force and effect. At Lender's option, Grantor will deposit with Lender as further security all original documents relating to the Lease and the leasehold interest in the Property. Unless Grantor is in breach or default of any of the terms contained in this Deed of Trust, Lender will have no right to cancel, modify, change, supplement, alter or amend the leasehold interest. No estate in the Property, whether fee title to the leasehold premises, the leasehold estate, or any subleasehold estate, will merge without Lender express written consent; rather these estates will remain separate and distinct, even if there is a union of these estates in the landlord, Grantor, or a third party who purchases or otherwise acquires the estates. Grantor further agrees that if Grantor acquires all or a portion of the fee simple tide, or any other leasehold or subleasehold title to the Property, that title will, at Lender's option, immediately become subject to the terms of this Deed of Trust, and Grantor will execute, deliver and record all documents necessary or appropriate to assure that such title is secured by this Deed of Trust. Notices Relating to the Lease. Grantor will promptly notify Lender in writing: (1) if Grantor is in default in the performance or observance of any of the terms, covenants, or conditions which Grantor is to perform or observe under the Lease; (2) if any event occurs which would constitute a default under the Lease; (3) if any notice of default is given to Grantor by the landlord under the Lease; (4) if, pursuant to the Lease, any proceeds received for the Property are deposited with someone other than Lender, whether received from any insurance on the Property or from the taking of any or all of the Property by eminent domain; and (5) if any arbitration or appraisal proceedings are requested or instituted pursuant to the Lease. Grantor agrees to provide Lender promptly with a copy of all written materials relating to any of the above and to provide Lender with such other information as Lender may reasonably request. Grantor agrees that promptly after the execution and delivery of this Deed of Trust, Grantor will notify the landlord under the Lease in writing of the execution and delivery of this Deed of Trust and of the name and address of Lender and will deliver a copy of this Deed of Trust to the landlord. Option to Cure Lease Default. Upon Lender's receipt of any written notice of Grantor's default under the Lease, Lender may, at Lend4as option, cure such default, even though Grantor, or any party on behalf of Grantor, questions or denies the existence of such default or nature of the default. Grantor expressly grants to Lender the absolute and immediate right to enter upon the Property to such extent anoften as Lender in it sole discretion deems necessary or desirable in order to prevent or cure any such deflffa�aull�t��bbyygqGrantor.gg tDUE ON SALE - CONSENT BY LENDER. Lender may, at Lender's option, declare immediately due a pays Sall sumsseaureHd fl s DeeTrust upon the sale or transfer, without Lender's prior written consent, of all or any part of the Real Property, or any interest in the Property, A "sale or transfer" means the conveyance of Real Property or any right, title or interest in the Real Property; whether legal, benefor equitable; whether voluntary or involuntary; whether by outright sale, deed, installment sale contract, land contract, contract for d leasehold interest with a term greater than three (3) years, lease -option contract, or by sale, assignment, or transfer of any beneficial interest in or to any land trust holding title to the Real Property, or by any other method of conveyance of an interest in the Real Property. If any Grantor is a corporation, partnership or limited liability company, transfer also includes any change in ownership of more than twenty-five percent (25%) of the voting stock, partnership interests or limited liability company interests, as the case may be, of such Grantor. However, this option shall not be exercised by Lender if such exercise is prohibited by federal law or by Idaho law. TAXES AND LIENS. The following provisions relating to the taxes and liens on the Property are part of this Deed of Trust Payment. Grantor shall pay when due (and in all events prior to delinquency) all taxes, special taxes, assessments, charges iincluding water and sewer), fines and impositions levied against or on account of the Property, and shall pay when due all claims for work done on or for services rendered or material furnished to the Property. Grantor shall maintain the Property free of all liens having priority over or equal to the interest of Lender under this Deed of Trust, except for the lien of taxes and assessments not due and except as otherwise provided in this Deed of Trust. Right to Contest. Grantor may withhold payment of any tax, assessment, or claim in connection with a good faith dispute over the obligation to pay, so long as Lender's interest in the Property is not jeopardized. If a lien arises or is filed as a result of nonpayment, Grantor shall within fifteen (151 days after the lien arises or, if a lien is filed, within fifteen (15) days after Grantor has notice of the filing, secure the discharge of the lien, or if requested by Lender, deposit with Lender cash or a sufficient corporate surety bond or other security satisfactory to Lender in an amount sufficient to discharge the lien plus any costs and reasonable attorneys' fees, or other charges that could accrue as a result of a foreclosure or sale under the lien. In any contest, Grantor shall defend itself and Lender and shall satisfy any adverse judgment before enforcement against the Property. Grantor shall name Lender as an additional obligee under any surety bond furnished in the contest proceedings. Evidence of Payment. Grantor shalt upon demand furnish to Lender satisfactory evidence of payment of the taxes or assessments and shall authorize the appropriate governmental official to deliver to Lender at any time a written statement of the taxes and assessments against the Property. Notice of Construction. Grantor shall notify Lender at least fifteen 115) days before any work is commenced, any services are furnished, or any materials are supplied to the Property, if any mechanic's lien, materialmen's lien, or other lien could be asserted on account of the work, services, or materials. Grantor will upon request of Lender furnish to Lender advance assurances satisfactory to Lender that Grantor can and will pay the cost of such improvements. PROPERTY DAMAGE INSURANCE. The following provisions relating to insuring the Property are a part of this Deed of Trust Maintenance of insurance. Grantor shall procure and maintain policies of fire insurance with standard extended coverage endorsements on a replacement basis for the full insurable value covering all Improvements on the Real Property in an amouht sufficient to avoid application of any coinsurance clause, and with a standard mortgages clause in favor of Lender. Grantor shall also procure and maintain comprehensive general liability insurance in such coverage amounts as Lender may request with Trustee and Lender being named as additional insureds in such liability insurance policies. Additionally, Granter shall maintain such other insurance, including but not limited to DEED OF TRUST Loan No. 5590258 (Continued) Page 3 hazard, business interruption, and boiler insurance, as Lender may reasonably require. Policies shall be written in form, amounts, coverages and basis reasonably acceptable to Lender and issued by a company or companies reasonably acceptable to Lender. Grantor, upon request of Lender, will deliver to Lender from time to time the policies or certificates of insurance in form satisfactory to Lender, including stipulations that coverages will not be cancelled or diminished without at least ten (10) days prior written notice to Lender. Each insurance policy also shall include an endorsement providing that coverage In favor of Lender will not be impaired in any way by any act, omission or default of Grantor or any other person. Should the Real Property be located in an area designated by the Director of the Federal Emergency Management Agency as a special flood hazard area, Grantor agrees to obtain and maintain Federal Flood Insurance, if available, within 45 days after notice is given by Lender that the Property is located in a special flood hazard area, for the full unpaid principal balance of the loan and any prior liens on the property securing the loan, up to the maximum policy limits set under the National Flood Insurance Program, or as otherwise required by Lender, and to maintain such insurance for the term of the loan. Application of Proceeds. Grantor shall promptly notify Lender of any loss or damage to the Property. Lender may make proof of loss if Grantor fails to do so within fifteen (15) days of the casualty. Whether or not Lender's security is impaired, Lender may, at Lender's election, receive and retain the proceeds of any insurance and apply the proceeds to the reduction of the Indebtedness, payment of any lien affecting the Property, or the restoration and repair of the Property. If Lender elects to apply the proceeds to restoration and repair, Grantor shall repair or replace the damaged or destroyed Improvements in a manner satisfactory to Lender. Lender shall, upon satisfactory proof of such expenditure, pay or reimburse Grantor from the proceeds for the reasonable cost of repair or restoration if Grantor is not in default under this bead of Trust. Any proceeds which have notbeendisbursed within 180 days after their receipt and which Lender has not committed to the repair or restoration of the Property shall be used first to pay any amount owing to Lender under this Deed of Trust, then to pay accrued interest, and the remainder, if any, shall be applied to the principal balance of the Indebtedness. If Lender holds any proceeds after payment in full of the Indebtedness, such proceeds shall be paid to Grantor as Grantor's interests may appear. Grantor's Report an Insurance. Upon request of Lender, however not more than once a year, Grantor shall furnish to Lender a report on each existing policy of insurance showing: (1) the name of the insurer; (2) the risks insured; (3) the amount of the policy; (4) the property Insured, the then current replacement value of such property, and the manner of determining that value; and (5) the expiration date of the policy. Grantor shall, upon request of Lender, have an independent appraiser satisfactory to Lender determine the cash value replacement cost of the Property. LENDER'S EXPENDITURES. If any action or proceeding is commenced that would materially affect Lender's interest in the Property or if Grantor fails to comply with any provision of this Deed of Trust or any Related Documents, including but not limited to Grantor's failure to discharge or pay when due any amounts Grantor is required to discharge or pay under this Deed of Trust or any Related Documents, Lender on Grantor's behalf may (but shall not be obligated to) take any action that Lender deems appropriate, including but not limited to discharging or paying all taxes, liens, security interests, encumbrances and other claims, at any time levied or placed on the Property and paying all costs for insuring, maintaining and preserving the Property. All such expenditures incurred or paid by Lander for such purposes will then bear interest at the rate charged under the Note from the date incurred or paid by Lender to the date of repayment by Grantor. All such expenses will become a part of the Indebtedness and, at Lender's option, will (A) be payable on demand; (B) be added to the balance of the Note and be apportioned among and be payable with any installment payments to become due during either (1) the term of any applicable insurance policy; or (2) the remaining term of the Note; or (C) be treated as a balloon payment which will be due and payable at the Note's maturity. The Deed of Trust also will secure payment of these amounts. Such right shall be in addition to a€1 other rights and remedies to which Lender may be entitled upon Default. WARRANTY; DEFENSE OF TITLE. The following provisions relating to ownership of the Property are a part of this Deed of Trust: Title. Grantor warrants that: (a) Grantor holds good and marketable title of record to the leasehold interest in the Property pursuant to the Lease, free and clear of all liens and encumbrances other than those set forth in the Real Property description br in any title insurance policy, title report, or final title opinion issued in favor of, and accepted by, Lender in connection with this Deed of Trust, and (b) Grantor has the full right, power, and authority to execute and deliver this Deed of Trust to Lender. Defense of Title. Subject to the exception in the paragraph above, Grantor warrants and will forever defend the title to the Property against the lawful claims of all persons. In the event any action or proceeding is commenced that questions Grantor's title or the interest of Trustee or Lender under this Dead of Trust, Grantor shall defend the action at Grantor's expense. Grantor may be the nominal party in such proceeding, but Lender shall be entitled to participate in the proceeding and to be represented in the proceeding by counsel of Lender's own choice, and Grantor will deliver, or cause to be delivered, to Lender such instruments as Lender may request from time to time to permit such participation. Compliance With Laws. Grantor warrants that the Property and Grantor's use of the Property complies with all existing applicable laws, ordinances, and regulations of governmental authorities. Survival of Representations and Warranties. All representations, warranties, and agreements made by Grantor in this Dead of Trust shall survive the execution and delivery of this Deed of Trust, shall be continuing in nature, and shall remain in full force and effect until such time as Grantor's Indebtedness shall be paid in full. CONDEMNATION. The following provisions relating to condemnation proceedings are a part of this Deed of Trust: Proceedings, If any proceeding in condemnation Is filed, Grantor shall promptly notify Lender in writing, and Grantor shall promptly take such steps as may be necessary to defend the action and obtain the award. Grantor may be the nominal party in such proceeding, but Lender shall be entitled to participate in the proceeding and to be represented in the proceeding by counsel of its own choice, and Grantor will deliver or cause to be delivered to Lender such instruments and documentation as may be requested by Lender from time to time to permit such participation. Application of Net Proceeds. If all or any part of the Property is condemned by eminent domain proceedings or by any proceeding or purchase in lieu of condemnation, Lender may at its election require that all or any portion of the net proceeds of the award be applied to the Indebtedness or the repair or restoration of the Property. The not proceeds of the award shall mean the award after payment of all reasonable costs, expenses, and attorneys' fees incurred by Trustee or Lender in connection with the condemnation. IMPOSITION OF TAXES, FEES AND CHARGES BY GOVERNMENTAL AUTHORITIES. The following provisions relating to governmental taxes, fees and charges are a part of this Deed of Trust: Current Taxes, Fees and Charges. Upon request by Lender, Grantor shall execute such documents in addition to this Deed of Trust and take whatever other action is requested by Lender to perfect and continue Lender's lien on the Real Property. Grantor shall reimburse Lender for all taxes, as described below, together with a€1 expenses incurred in recording, perfecting or continuing this Dead of Trust, including without limitation all taxes, fees, documentary stamps, and other charges for recording or registering this Dead of Trust. Taxes. The following shall constitute taxes to which this section applies: (1) a specific tax upon this type of Deed of Trust or upon all or any part of the Indebtedness secured by this Deed of Trust; (2) a specific tax on Grantor which Grantor is authorized or required to deduct from payments on the Indebtedness secured by this type of Deed of Trust; (3) a tax on this type of Deed of Trust chargeable against the Lender or the holder of the Note; and (4) a specific tax on all or any portion of the Indebtedness or on payments of principal and interest made by Grantor. Subsequent Taxes. if any tax to which this section applies is enacted subsequent to the date of this Dead of Trust, this event shall have the same effect as an Event of Default, and Lender may exercise any or all of its available remedies for an Event of Default as provided below unless Grantor either (1) pays the tax before it becomes delinquent, or (2) contests the tax as provided above in the Taxes and Liens section and deposits with Lender cash or a sufficient corporate surety bond or other security satisfactory to Lender. SECURITY AGREEMENT; FINANCING STATEMENTS. The following provisions relating to this Deed of Trust as a security agreement are a part of this Deed of Trust: Security Agreement. This instrument shall constitute a Security Agreement to the extent any of the Property constitutes fixtures, and Lender shall have all of the rights of a secured party under the Uniform Commercial Code as amended from time to time. Security Interest. Upon request by Lender, Grantor shall take whatever action is requested by Lender to perfect and continue Lender's security interest in the Rents and Personal Property. In addition to recording this Deed of Trust in the real property records, Lender may, at any time and without further authorization from Grantor, fila executed counterparts, copies or reproductions of this Dead of Trust as a financing statemgnt. Grantor shall reimburse Lender for all expenses incurred in perfecting or continuing this security interest. Upon default, Grantor shall not remove, sever or detach the Personal Property from the Property. upon default, Grantor shall assemble any Personal Property not affixed to the Property in a manner and at a place reasonably convenient to Grantor and Lender and make it available to Lender within three (3) days after receipt of written demand from Lender to the extent permitted by applicable law. DEED OF TRUST Loan No: 5590258 (Continued) Page 4 Addresses. The mailing addresses of Grantor (debtor) and Lender (secured party) from which information concerning the security interest granted by this Deed of Trust may be obtained (each as required by the Uniform Commercial Code) are as stated on the first page of this Deed of Trust. FURTHER ASSURANCES; ATTORNEY-IN-FACT, The following provisions relating to further assurances and attorney-in-fact are a part of this Deed of Trust: Further Assurances. At any time, and from time to time, upon request of Lender, Grantor will make, execute and deliver, or will cause to be made, executed or delivered, to Lender or to Lender's designee, and when requested by Lender, cause to be filed, recorded, refiled, or rerecorded, as the case may be, at such times and in such offices and places as Lender may deem appropriate, any and all such mortgages, deeds of trust, security deeds, security agreements, financing statements, continuation statements, instruments of further assurance, certificates, and other documents as may, in the sale opinion of Lender, be necessary or desirable in order to effectuate, complete, perfect, continue, or preserve (1) Grantor's obligations under the Note, this Deed of Trust, and the Related Documents, and (2) the liens and security interests created by this Deed of Trust as first and prior liens on the Property, whether now owned or hereafter acquired_ by Grantor. Unless prohibited by law or Lender agrees to the contrary in writing, Grantor shall reimburse Lender for all costs and expenses incurred in connection with the matters referred to in this paragraph. Attorney.in-Fact. If Grantor fails to do any of the things referred to in the preceding paragraph, Lender may do so for and in the name of Grantor and at Grantor's expense. For such purposes, Grantor hereby irrevocably appoints Lender as Grantor's attorney-in-fact for the purpose of making, executing, delivering, filing, recording, and doing all other things as may be necessary or desirable, in Lender's sole opinion, to accomplish the matters referred to in the preceding paragraph. FULL PERFORMANCE. If Grantor pays all the Indebtedness when due, and otherwise performs all the obligations imposed upon Grantor under this Deed of Trust, Lender shall execute and deliver to Trustee a request for full reconveyance and shall execute and deliver to Grantor suitable statements of termination of any financing statement on file evidencing Lender's security interest in the Rents and the Personal Property. Any reconveyance foo required by law shall be paid by Grantor, if permitted by applicable law. EVENTS OF DEFAULT. Each of the fallowing, at Lender's option, shall constitute an Event of Default under this Deed of Trust: Payment Default. Grantor fails to make any payment when due under the Indebtedness. Other Defaults. Grantor fails to comply with or to perform any other term, obligation, covenant or condition contained in this Deed of Trust or in any of the Related Documents or to comply with or to perform any term, obligation, covenant or condition contained in any other agreement between Lender and Grantor. Compliance Default. Failure to comply with any other term, obligation, covenant or condition contained in this Deed of Trust, the Note or in any of the Related Documents, Default an Other Payments. Failure of Grantor within the time required by this Deed of Trust to make any payment for taxes or insurance, or any other payment necessary to prevent filing of or to effect discharge of any lien. Default in Favor of Third Parties. Should Grantor default under any loan, extension of credit, security agreement, purchase or sales agreement, or any other agreement, in favor of any other creditor or person that may materially affect any of Grantor's property or Grantor's ability to repay the Indebtedness or perform their respective obligations under this Deed of Trust or any of the Related Documents. False Statements. Any warranty, representation or statement made or furnished to Lender by Grantor or on Grantor's behalf under this Deed of Trust or the Related Documents is false or misleading in any material respect, either now or at the time made or furnished or becomes false or misleading at any time thereafter. Defective Collateralization. This Deed of Trust or any of the Related Documents ceases to be in full force and effect (including failure of any collateral document to create a valid and perfected security interest or lien) at any time and for any reason. insolvency. The dissolution or termination of Grantor's existence as a going business, the insolvency of Grantor, the appointment of a receiver for any part of Grantor's property, any assignment for the benefit of creditors, any type of creditor workout, or the commencement of any proceeding under any bankruptcy or insolvency laws by or against Grantor, Creditor or Forfeiture Proceedings, Commencement of foreclosure or forfeiture proceedings, whether by judicial proceeding, self-help, repossession or any other method, by any creditor of Grantor or by any governmental agency against any property securing the Indebtedness. This Includes a garnishment of any of Grantor's accounts, including deposit accounts, with Lender. However, this Event of Default shall not apply if there is a good faith dispute by Grantor as to the validity or reasonableness of the claim which is the basis of the creditor or forfeiture proceeding and if Grantor gives Lender written notice of the creditor or forfeiture proceeding and deposits with Lender monies or a surety bond for the creditor or forfeiture proceeding, in an amount determined by Lender, in its sole discretion, as being an adequate reserve or bond for the dispute, Lease Default. Grantor defaults under the terms of the Lease, or any other event (whether or not Grantor's fault) results in the termination or cancellation of Grantor's leasehold rights. Breach of Other Agreement, Any breach by Grantor under the terms of any other agreement between Grantor and Lender that is not remedied within any grace period provided therein, including without limitation any agreement concerning any indebtedness or other obligation of Grantor to Lender, whether existing now or later. Events Affecting Guarantor. Any of the preceding events occurs with respect to any Guarantor of any of the Indebtedness or any Guarantor dies or becomes incompetent, or revokes or disputes the validity of, or liability under, any Guaranty of the Indebtedness. In the event of a death, Lender, at its option, may, but shall not be required to, permit the Guarantor's estate to assume unconditionally the obligations arising under the guaranty In a manner satisfactory to Lender, and, in doing so, cure any Event of Default, Adverse Change. A material adverse change occurs in Grantor's financial condition, or Lender believes the prospect of payment or performance of the Indebtedness is impaired. Insecurity. Lender in good faith believes itself insecure. Right to Cure. If any default, other than a default in payment is curable and if Grantor has not been given a notice of a breach of the same provision of this Deed of Trust within the preceding twelve (12) months, it may be cured if Grantor, after receiving written notice from Lender demanding cure of such default: (1) cures the default within fifteen (15) days; or (2) if the cure requires more than fifteen (1 5) days, immediately initiates steps which Lender deems in Lender's sole discretion to be sufficient to cure the default and thereafter continues and completes all reasonable and necessary steps sufficient to produce compliance as soon as reasonably practical, RIGHTS AND REMEDIES ON DEFAULT. If an Event of Default occurs under this Dead of Trust, at any time thereafter, Trustee or Lender may exercise any one or more of the following rights and remedies: Notice of Default. In the Event of Default Lender shall execute or cause the Trustee to execute a written notice of such default and of Lender's election to cause the Property to be sold to satisfy the Indebtedness, and shall cause such notice to be recorded in the office of the recorder of each county wherein the Real Property, or any part thereof, is situated. Election of Remedies. Election by Lender to pursue any remedy shall not exclude pursuit of any other remedy, and an election to make expenditures or to take action to perform an obligation of Grantor under this Deed of Trust, after Grantor's failure to perform, shall not affect Lender's right to declare a default and exercise its remedies. Accelerate Indebtedness. Lender shall have the right at its option without notice to Grantor to declare the entire Indebtedness immediately due and payable, including any prepayment penalty which Grantor would be required to pay. Foreclosure. With respect to all or any part of the Real Property, the Trustee shall have the right to foreclose by notice and sale, and Lender shall have the right to foreclose by judicial foreclosure, in either case in accordance with and to the full extent provided by applicable law. UCC Remedies. With respect to all or any part of the Personal Property, Lender shall have all the rights and remedies of a secured party under the Uniform Commercial Code. , Collect Rents. Lender shall have the right, without notice to Grantor to take possession of and manage the Property and collect the Rents, including amounts past due and unpaid, and apply the net proceeds, over and above Lender's costs, against the indebtedness, In furtherance of this right, Lender may require any tenant or other user of the Property to make payments of rent or use fees directly to DEED OF TRUST Loan No: 5590258 (Continued) Page 5 Lender. If the Rents are collected by Lender, then Grantor irrevocably designates Lender as Grantor's attorney-in-fact to endorse instruments received in payment thereof in the name of Grantor and to negotiate the same and collect the proceeds. Payments by tenants or other users to Lender in response to Lender's demand shall satisfy the obligations for which the payments are made, whether or not any proper grounds for the demand existed. Lender may exercise its rights under this subparagraph either in person, by agent, or through a receiver. Appoint Receiver, Lender shall have the right to have a receiver appointed to take possession of all or any part of the Property, with the power to protect and preserve the Property, to operate the Property preceding foreclosure or sale, and to collect the Rents from the Property and apply the proceeds, over and above the cost of the receivership, against the Indebtedness. The receiver may serve without bond if permitted by law. Lender's right to the appointment of a receiver shall exist whether or not the apparent value of the Property exceeds the Indebtedness by a substantial amount. Employment by Lender shall not disqualify a person from serving as a receiver. Tenancy at Sufferance. If Grantor remains in possession of the Property after the Property is sold as provided above or Lender otherwise becomes entitled to possession of the Property upon default of Grantor, Grantor shall become a tenant at sufferance of Lender or the purchaser of the Property and shall, at Lender's option, either (1) pay a reasonable rental for the use of the Property, or (2) vacate the Property immediately upon the demand of Lender. Other Remedies. Trustee or Lender shall have any other right or remedy provided in this Deed of Trust or the Note or by law Notice of Sale. Lender shall give Grantor reasonable notice of the time and place of any public sale of the Personal Property or of the time after which any private sale or other intended disposition of the Personal Property is to be made. Reasonable notice shall mean notice given at least ten (10) days before the time of the sale or disposition. Any sale of the Personal Property may be made in conjunction with any sale of the Real Property, Sale of the Property. To the extent permitted by applicable law, Grantor hereby waives any and all rights to have the Property marshalled. In exercising its rights and remedies, the Trustee or Lender shall be free to sell all or any part of the Property together or separately, in one sale or by separate sales. Lender shall be entitled to bid at any public sale an all or any portion of the Property. Notice of sale having been given as then required by law, and not less than the time required by law having elapsed, Trustee, without demand on Grantor, shall sell the property at the time and place fixed by it in the notice of sale at public auction to the highest bidder for cash in lawful money of the United States, payable at time of sale. Trustee shall deliver to the purchaser his or her deed conveying the Property so sold, but without any covenant or warranty express or implied. The recitals in such dead of any matters or facts shall be conclusive proof of the truthfulness of such matters or facts. After deducting all costs, fees and expenses of Trustee and of this Trust, including cost of evidence of title and reasonable attorneys' fees, including those in connection with the sale, Trustee shall apply proceeds of sale to payment of Jai all sums expended under this Deed of Trust, not then repaid with interest thereon as provided in this Deed of Trust; (b) all Indebtedness secured hereby; and (c) the remainder, if any, to the person or persons legally entitled thereto. Attorneys' Fees; Expenses. if Lender institutes any suit or action to enforce any of the terms of this Deed of Trust, Lender shall be entitled to recover such sum as the court may adjudge reasonable as attorneys' fees at trial and upon any appeal. Whether or not any court action is involved, and to the extent not prohibited by law, all reasonable expenses Lender incurs that in Lender's opinion are necessary at any time for the protection of its interest or the enforcement of its rights shall become a part of the Indebtedness payable on demand and shall bear interest at the Note rate from the date of the expenditure until repaid. Expenses covered by this paragraph include, without limitation, however subject to any limits under applicable law, Lander's reasonable attorneys' fees and Lender's legal expenses whether or not there is a lawsuit, including reasonable attorneys' fees and expenses for bankruptcy proceedings (including efforts to modify or vacate any automatic stay or injunction), appeals, and any anticipated post -judgment collection services, the cost of searching records, obtaining title reports (including foreclosure reports), surveyors' reports, and appraisal fees, title insurance, and fees for the Trustee, to the extent permitted by applicable law. Grantor also will pay any court costs, in addition to all other sums provided by law. Rights of Trustee. Trustee shall have all of the rights and duties of Lender as set forth in this section. POWERS AND OBLIGATIONS OF TRUSTEE, The following provisions relating to the powers and obligations of Trustee are part of this Deed of Trust: Powers of Trustee. In addition to all powers of Trustee arising as a matter of law, Trustee shall have the power to take the following actions with respect to the Property upon the written request of Lender and Grantor: (a) join in preparing and filing a map or plat of the Real Property, including the dedication of streets or other rights to the public; (b) join in granting any easement or creating any restriction on the Real Property; and Jai join in any subordination or other agreement affecting this Deed of Trust or the interest of Lender under this Deed of Trust. Obligations to Notify. Trustee shall not be obligated to notify any other party of a pending sale under any other trust deed or lien, or of any action or proceeding in which Grantor, Lender, or Trustee shall be a party, unless the action or proceeding is brought by Trustee. Trustee. Trustee shall meet all qualifications required for Trustee under applicable law. In addition to the rights and remedies set forth above, with respect to all or any part of the Property, the Trustee shall have the right to foreclose by notice and sale, and Lender shall have the right to foreclose by judicial foreclosure, in either case in accordance with and to the full extent provided by applicable law. Successor Trustee. Lender, at Lender's option, may from time to time appoint a successor Trustee to any Trustee appointed under this Deed of Trust by an instrument executed and acknowledged by Lender and recorded in the office of the recorder of ADA County, State of Idaho. The instrument shall contain, in addition to all other matters required by state law, the names of the original Lender, Trustee, and Grantor, the book and page where this Deed of Trust is recorded, and the name and address of the successor trustee, and the instrument shall be executed and acknowledged by Lender or its successors in interest. The successor trustee, without conveyance of the Property, shall succeed to all the title, power, and duties conferred upon the Trustee in this Deed of Trust and by applicable law. This procedure for substitution of Trustee shall govern to the exclusion of all other provisions for substitution. NOTICES. Any notice required to be given under this Deed of Trust, including without limitation any notice of default and any notice of sale shall be given in writing, and shall be effective when actually delivered, when actually received by telefacsimile (unless otherwise required by law), when deposited with a nationally recognized overnight courier, or, if mailed, when deposited in the United States mail, as first class, certified or registered mail postage prepaid, directed to the addresses shown near the beginning of this Deed of Trust. All copies of notices of foreclosure from the holder of any lien which has priority over this Dead of Trust shall be sent to Lender's address, as shown near the beginning of this Deed of Trust. Any party may change its address for notices under this Deed of Trust by giving formal written notice to the other parties, specifying that the purpose of the notice is to change the party's address, For notice purposes, Grantor agrees to keep Lender informed at all times of Grantor's current address. Unless otherwise provided or required by law, if there is more than one Grantor, any notice given by Lender to any Grantor is deemed to be notice given to all Grantors. EXHIBIT "A". An exhibit, titled "EXHIBIT "A"," is attached to this Deed of Trust and by this reference is made a part of this Deed of Trust just as if all the provisions, terms and conditions of the Exhibit had been fully set forth in this Deed of Trust. MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part of this Deed of Trust: Amendments. This Deed of Trust, together with any Related Documents, constitutes the entire understanding and agreement of the parties as to the matters set forth in this Deed of Trust. No alteration of or amendment to this Deed of Trust shall be effective unless given in writing and signed by the party or parties sought to be charged or bound by the alteration or amendment. Annual Reports, if the Property is used for purposes other than Grantor's residence, Grantor shall furnish to Lender, upon request, a certified statement of net operating income received from the Property during Grantor's previous fiscal year in such form and detail as Lender shall require, "Net operating income" shall mean all cash receipts from the Property less all cash expenditures made in connection with the operation of the Property. Caption Headings. Caption headings in this Deed of Trust are for convenience purposes only and are not to be used to interpret or define the provisions of this Deed of Trust, Merger. There shall be no merger of the interest or estate created by this Deed of Trust with any other interest or estate in the Property at any time held by or for the benefit of Lender in any capacity, without the written consent of Lender. Governing Law. This Deed of Trust will be governed by federal law applicable to Lender and, to the extent not preempted by federal law. the laws of the State of Idaho without regard to its conflicts of law provisions. This Deed of Trust has been accepted by Lander in the State of Idaho. Choice of Venue. If there is a lawsuit, Grantor agrees upon Lender's request to submit to the jurisdiction of the courts of ADA County, State of Idaho. DEED OF TRUST Loan No: 5590258 (Continued) mage 6 Joint and Several Liability. All obligations of Grantor under this Deed of Trust shall be joint and several, and all references to Grantor shall mean each and every Grantor. This means that each Grantor signing below is responsible for all obligations in this Deed of Trust. Where any one or more of the parties is a corporation, partnership, limited liability company or similar entity, it is not necessary for Lender to inquire into the powers of any of the officers, directors, partners, members, or other agents acting or purporting to act on the entity's behalf, and any obligations made or created in reliance upon the professed exercise of such powers shall be guaranteed under this Deed of Trust. No Waiver by Lander. Lender shall not be deemed to have waived any rights under this Deed of Trust unless such waiver is given in writing and signed by Lender. No delay or omission on the part of Lender in exercising any right shall operate as a waiver of such right or any other right. A waiver by Lender of a provision of this Deed of Trust shall not prejudice or constitute a waiver of Lender's right otherwise, to demand strict compliance with that provision or any other provision of this Deed of Trust. No prior waiver by Lender, nor any course of dealing between Lender and Grantor, shall constitute a waiver of any of Lender's rights or of any of Grantor's obligations as to any future transactions. Whenever the consent of Lender is required under this Deed of Trust, the granting of such consent by Lender in any instance shall not constitute continuing consent to subsequent instances where such consent is required and in all cases such consent may be granted or withheld in the sole discretion of Lender. Severability. If a court of competent jurisdiction finds any provision of this Deed of Trust to be illegal, invalid, or unenforceable as to any person or circumstance, that finding shall not make the offending provision illegal, invalid, or unenforceable as to any other person or circumstance. If feasible, the offending provision shall be considered modified so that it becomes legal, valid and enforceable. If the offending provision cannot be so modified, it shall be considered deleted from this Deed of Trust. Unless otherwise required by law, the illegality, invalidity, or unenforceabifity of any provision of this Deed of Trust shall not affect the legality, validity or enforceability of any other provision of this Deed of Trust. Successors and Assigns, Subject to any limitations stated in this Deed of Trust on transfer of Grantor's interest, this Deed of Trust shall be binding upon and inure to the benefit of the parties, their successors and assigns. If ownership of the Property becomes vested in a person other than Grantor, Lender, without notice to Grantor, may deal with Grantor's successors with reference to this Deed of Trust and the Indebtedness by way of forbearance or extension without releasing Grantor from the obligations of this Deed of Trust or liability under the Indebtedness. Time is of the Essence. Time is of the essence in the performance of this Deed of Trust. Waive Jury. All parties to this Deed of Trust hereby waive the right to any jury trial in any action, proceeding, or counterclaim brought by any party against any other party. Waiver of Homestead Exemption. Grantor hereby releases and waives all rights and benefits of the homestead exemption laws of the State of Idaho as to all Indebtedness secured by this Deed of Trust. DEFINITIONS, The following capitalized words and terms shall have the following meanings when used in this Deed of Trust. Unless specifically stated to the contrary, all references to dollar amounts shall mean amounts in lawful money of the United States of America. Words and terms used in the singular shall include the plural, and the plural shall include the singular, as the context may require. Words and terms not otherwise defined in this Deed of Trust shall have the meanings attributed to such terms in the Uniform Commercial Code; Beneficiary. The word "Beneficiary" means IDAHO INDEPENDENT BANK, and its successors and assigns. Borrower. The word "Borrower" means LAKEV€EW MERIDIAN INVESTORS, LLC; and R.A. DAVIS PROPERTIES, INC. and includes all co-signers and co -makers signing the Note and all their successors and assigns. Deed of Trust. The words "Deed of Trust" mean this Deed of Trust among Grantor, Lender, and Trustee, and includes without limitation all assignment and security interest provisions relating to the Personal Property and Rents. Default. The word "Default" means the Default set forth in this Deed of Trust in the section titled "Default". Environmental Laws. The words "Environmental Laws" mean any and all state, federal and local statutes, regulations and ordinances relating to the protection of human health or the environment, including without limitation the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended, 42 U.S.C. Section 9601, at seq. ("CERCLA"), the Superfund Amendments and Reauthorization Act of 1986, Pub. L. No. 99-499 {"SARA"), the Hazardous Materials Transportation Act, 49 U.S.C. Section 1801, at seq., the Resource Conservation 'ond.Recovery Act,. 42 U.S.C. Section 6901, at seq„ or other applicable state or federal laws, rules, or regulations adopted pursuant thtireto,' Event of Default. The words "Event of Default" mean any of the events of default set forth in this Dead of Trust in the events of default section of this Deed of Trust. Grantor. The word "Grantor" means LAKEVIEW MERIDIAN INVESTORS, LLC; and R.R. DAVIS PROPERTIES, INC.. Guarantor. The word "Guarantor" means any guarantor, surety, or accommodation party of any or all of the Indebtedness. Guaranty. The word "Guaranty" means the guaranty from Guarantor to Lender, including without limitation a guaranty of all or part of the Note. Hazardous Substances. The words "Hazardous Substances" mean materials that, because of their quantity, concentration or physical, chemical or infectious characteristics, may cause or pose a present or potential hazard to human health or the environment when improperly used, treated, stored, disposed of, generated, manufactured, transported or otherwise handfed. The words "Hazardous Substances" are used in their very broadest sense and include without limitation any and all hazardous or toxic substances, materials or waste as defined by or listed under the Environmental Laws. The term "Hazardous Substances" also includes, without limitation, petroleum and petroleum by-products or any fraction thereof and asbestos. Improvements. The word "Improvements" means all existing and future improvements, buildings, structures, mobile homes affixed on the Real Property, facilities, additions, replacements and other construction on the Real Property. Indebtedness. The word "Indebtedness" means all principal, interest, and other amounts, costs and expenses payable under the Note or Related Documents, together with all renewals of, extensions of, modifications of, consolidations of and substitutions for the Note or Related Documents and any amounts expended or advanced by Lender to discharge Grantor's obligations or expenses incurred by Trustee or Lender to enforce Grantor's obligations under this Deed of Trust, together with interest on such amounts as provided in this Deed of Trust. Specifically, without limitation, Indebtedness includes all amounts that may be indirectly secured by the Cross -Collateralization provision of this Deed of Trust. Lease. The ward "Lease" means the lease of the Property dated May 17, 2005, between CITY OF MERIDIAN, Landlord and Grantor. Lender. The word "Lender" means IDAHO INDEPENDENT BANK, its successors and assigns. Note. The word "Note" means the promissory note dated May 17, 2006, in the original principal amount of $649,759.84 from Grantor to Lender, together with all renewals of, extensions of, modifications of, refinancings of, consolidations of, and substitutions for the promissory note or agreement. NOTICE TO GRANTOR. THE NOTE CONTAINS A VARIABLE INTEREST RATE. Personal Property. The words "Personal Property" mean all equipment, fixtures, and other articles of personal property now or hereafter owned by Grantor, and now or hereafter attached or affixed to the Real Property; together with all accessions, parts, and additions to, all replacements of, and all substitutions for, any of such property; and together with all proceeds (including without limitation all insurance proceeds and refunds of premiums) from any sale or other disposition of the Property. Property, The word "Property" means collectively the Real Property and the Personal Property. Real Property. The words "Real Property" mean the real property, interests and rights, as further described in this Deed of Trust. Related Documents, The words "Related Documents" mean all promissory notes, credit agreements, loan agreements, environmental agreements, guaranties, security agreements, mortgages, deeds of trust, security deeds, collateral mortgages, and all other instruments, agreements and documents, whether now or hereafter existing, executed in connection with the Indebtedness. Rents. The word "Rents" means all present and future rents, revenues, income, issues, royalties, profits, and other benefits derived from the Property. Trustee. The word "Trustee" means PIONEER TITLE COMPANY OF ADA COUNTY, whose address is 8151 W. RIFLEMAN AVENUE, BOISE, ID 83704 and any substitute or successor trustees. DEED OF TRUST Loan No: 5590258 (Continued) Page 7 EACH GRANTOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS DEED OF TRUST, AND EACH GRANTOR AGREES TO ITS TERMS. GRANTOR: LAKEVIEW MERIDIAN INVESTORS, LLC OAAS LANEY, LLC, Member of LAKEVIEW MERIDIAN INVESTORS, LLC WNITEROCK4INVST NT . LC, Member of OAAS LANEY, LLC By: T. S, Man er of ROCK IN S E S, LL LANEYLAND ., Member of OAAS LANEY, LLC By: L Y, ral artner of LANEYLAND R.R. DAVIS PERTIES, INC., Mem f LAKEVIEW MERIDIAN INVESTORS, LLC By: RI R.--DAVIS, resrdent of R.R. DAVIS PROPERTIES, INC. R.R. DAVIS BROPERTIES, I v By: . t--> AI HARD R. DAVIS, President of R.R. DAVIS PROPERTIES, INC. LIMITED LIABILITY COMPANY ACKN KIMBERLY CMKE STATE OF I Notary Public I SS State of Idaho COUNTY OF I On this �y day of , in the year 20 before me �m E3j } a notarypu jis in and for the State of Idaho, personally appeared T. ERIK OAAS, Manager of WHITEROCK INVESTMENTS, LLC and STEVEN LANEAaneral Partner of LANEYLAND L.P. and RICHARD R. DAVIS, President of R.R. DAVIS PROPERTIES, INC k or identified to me (or proved to me on the oath of i, to be members or designated a nts 1 li ' ed liability company of LAKEVIEW MERIDIAN INVESTORS, LLC, and the members or designated agents who subscrib id Ii . ed f 'lit company name to the foregoing instrument, and acknowledged to me that they executed the same in said limited liability m ny a t�/� Residing at L><�r LfJ1A� Notary Public My commission expires CORPORATE ACKNOWLEDGMENT STATE OF (7 00 ISS COUNTY OF Ig" 04 On this 3 / r -r- day of M 7 , in the year 20 �, before me C7 a0f4t-D t"�- _--4rr'/sOrr rT, a notary public in and for the State of Idaho, personally appeared RICHARD R. DAVIS, President of A.R. DAVIS PROPERTIES, INC., known or identified to me (or proved to me on the oath of S, to be an authorized signer of R.FlDAVIS PROPERTIES, INC., a corporation that executed the instrument or the person who executed the instrument on beha f s ' or , a a k e t such corporation executed the sam�,e,�.,�// / Residing at j44 6�oe f o C flW-C -ZD jj yj' Notary Fiblic f r Idaho r p ��7ltLltyNrlffrray�i My commission expires 3 ~ 1 / ` �'t'�4:�%7� DEED OF TRUST Loan No: 5590258 (Continued) Page 8 REQUEST FOR FULL RECONVEYANCE (To be used only when obligations have been paid in full) To: , Trustee The undersigned is the lega€ owner and holder of all Indebtedness secured by this Deed of Trust. All sums secured by this Dead of Trust have been fully paid and satisfied. You are hereby directed, upon payment to you of any sums owing to you under the terms of this Deed of Trust or pursuant to any applicable statute, to cancel the Note secured by this Deed of Trust (which is delivered to you together with this Deed of Trust), and to reconvey, without warranty, to the parties designated by the terms of this Deed of Trust, the estate now held by you under this Deed of Trust. Please mail the reconveyance and Related Documents to: Date: Beneficiary: By: Its: �w moe.,sr�s.v. ealmmo cns..Hn...a rs..�wzdw.n. .... les>. alts. ra wcnn n.,.w. .o rwnwxxasmn li`ffn,AYal k anyal6 PA-1� A EXHIBIT r'Ar' This EXHIBIT "A" is attached to and by this reference is made a part of the Deed of Trust, dated May 77, 2006, and executed in connection with a loan or other financial accommodations between IDAHO INDEPENDENT BANK and LAKEVIEW MERIDIAN INVESTORS, LLC; and R.R. DAVIS PROPERTIES, INC. PARCELT Aparcel of land being a portion of the Wcst-half, Section 3, Townsbip 3 North, Range I West, Boise Meridian Meridian, Ada County, Idaho and more particularly described as follows: Beginning at a brass cap marking the Southeast comer of the Northeast quarter of Section 3, Township 3 North, Range I West, Boise Meridian, Meridian, Ada County, Idaho; Thence along the Southerly boundary of said Northeast quarter of Section 3, North 88 degrees 55'29" West 2643.29 feet to a brass cap marking the Southwest corner of the Northeast quarter. Thence leaving said Southerly boundary North 75 degrees 30'00" West 190.00 feet to a 2" iron pipe, Thence North 40 degrees 00'00" West 40.00 feet to an iron pin; Titmce South 75 degrees 5931" West 70.00 feet to an iranpin; Thence South 25 degrees 00'00" West 64.19 feet to an iron pin; Thence North 89 degrees 25'06" West 254.51 fat to a point, said point also being the teat point of beginning; Thence continuing North 89 degrees 25'06" Past 100.01 feet to a point; Thence South 00 degrees 30'11" West 407.92 feet to a point; Thence South 68 degrees 54'11 Past 276.46 feet to a point marking a point of curve; Thence along a curve to the right 59.46 fed, said curve having a central angle of 34 degrees 0410", a radius of 100.00 feet, tangents of30.64 feet and a long chord of 58.59 fed bearing South 51 degrees 5T06" East to a point marking a point of tangents; Thence South 34 degrees 50'01" East 292.99 fed to a point; Thence South 89 degrees 4841" East 147.34 feet to a point; Thence North 35 degrees 0000" West 109.03 feet to a point; Thence North 51 degrees 45'00" West 580.00 fat to a point; Thence North 00 degree 2944" East 335.18 fat to the point of beginning. PARCELTI A parcel of land lying in portions of the South half of the North half and the North half of the South half of Section 3, Township 3 North, Range 1 West, Boise Meridian, Meridian, Ada County, Idaho and more particularly described as follows: Beginning at a point marking the Northwest corner of the said North ball of the South half of Section 3; Thence South 89 degrees 25'06" East 2,077.73 feet along the Northerly boundary of the said North half of the South half of Section 3 to a point, also saidpoint being the real point of beginning; Thence South 0 degree 2944" West 335.18 feet to a point; Thence South 51 degrees 45100" East 580.00 fed to a point; Thence South 35 degrees 00'00" East 285.33 feet to apoint;, Thence South 22 degrees 15'00" West 60.05 fed to a point; Thence South 43 degrees 5810" Fast 238.75 feet to a point; Thence South 29 degrees 00'00" East 110.00 feet to a point; Thence North 61 degrees 00'00" East 81.19 fed to a point of curve; Thence Northeasterly along a curve to the left 147.14 feet, said curve having a central angle of 48 degrees 1028", a radius of 175.00 fat, tangents 0£78.23 feet and a long chord of 142.84 fed bearing North 36 degrees 5446" East to apoint of ending of curve; ThenceNorth 56 degrees 30'00" West 151.38 feet to a point; Thence North 41 degrees 30'00" West 203.92 feet to a point; Thence North 17 degrees 15100" West 94,14 fed to a point; Thence North 22 degrees 1500" East 147.00 feet to a point; Thence North 65 degrees 50'00" East 45.00 feet to a point; Thence South 87 degrees 20'00" East 78.40 fed to a point; Thence South 68 degrees 00'00" East 61.48 feet to apoint; Thence South 71 degrees 33'25" East 88.05 fed to a point; Thence South 60 degrees 00'00" East 108.33 tat to a point of beginning of curve, Thence Northeasterly along a curve to the right 139.32 fed, said curve having a central angle of 25 degrees 35'19", a radius of 31 I.95 feet, tangents of 70.84 fed and along chord of 138.16 fat bearing North 56 degrees 12'20" East to a point of tangent; Thence North 69 degrees 00'00" East 115.08 fat to a point of curve; Thence Northeasterly along a curve to the left 125.75 fed, said curve having a central angle of 24 degrees 25'22", a radius of295.00 feet, tangents of 63.84 feet and a long chord of 124.80 feet bearing North 56 degrees 4719" East to a point of ending of curve, Thence North 44 degrees 00'00" West 79.63 fat to a point; Thence North 67 degrees 45'00" West 160.00 feet to a point; Thence South 65 degrees 50'00" West 244.67 fat to a point; Thence North 50 degrees 30'00" West 114.35 fed to a point; Thence North 44 degrees 00'00" East 90.00 feet to a point; Thenoeb(orth 17 degrees 00'00" West 175.00 feet to a point; Thence North 12 degrees 00'00" East 280.00 feet to a point; Thence North 77 degrees 30'00" West 1.70.00 fat to a point; Thence South 68 degrees 00'00" West 265.00 fed to apoint marling the Northeast corner of the Southwest quarter of the said Section 3; Thence North 75 degrees 30'00" West 190.00 fed to a point; Thence North 40 degrees 00'00" West 40.00 fat to a point; Thence South 75 degas 5951" West 70.00 fed to a point; Thence South 25 degrees 00'00" West 64.19 fed to a point on the said Northerly boundary oftheNorth hatf of the South balf of Section 3; ThenocNorth 89 deg= 25'06" West 254.51 feet along the said Northerly boundary of theNorth half of the South half of Section 3 to the point ofbegirmiug, EXCEPT that portion Eying within the following subdivisions: Cherry ]ane Village No. 1 Subdivision, according to the plat thereof Sled in Book 44 ofPlats at Pages 3537 and 3536, . records of A11a County, Idaho; EXHIBIT "A" Loan No: 5590258 (Continued) Cherry Lane Village No. 2 Subdivision, according to the plat thereof, filed in Book 46 of Plats at Pages 3791 and 3792, records of Ada County, Idaho; The Lake at Cherry Lane, according to theplat thereoffiled in Book 52 of Plats at Pages 4569 and 4570, records ofAda County, Idaho; The Lake at Cherry Lane No. 2, according to the plat thereof filed in Book 54 of Plats at Pages 4882 and 4883, records of Ada County, Idaho; r The Lake at Cherry LaneNo. 4 Subdivision, according to theplat thereof, filed in Book 74 ofPlats at Pages 7674 and 7675, records of Ada County, Idaho. PARCEL Ln -A A portion of Ute West half of Section 3, Township 3 North, Range I West, Boise Meridian, Meridian, Ada County, Idaho, more particularly described as follows: Commencing at the corner common to Sections 4, 9, 10 and the said Section 3; Thence North 0 degree 38'11" East 2651,19 feet to the quarter corner common to said Sections 3 and 4 as Sano way reestablished by LS 972 (CP & F INSTRUMENT NO. 7852146, records of Ada County, Idaho); from which the Northwest comer of said Section 3 bears North 0 degree 38'27" East 2697.49 feet; Thence North 0 degree 38'27" East 22.64 feet to a 518" iron pin; Thence South 99 degrees 55'31" East 379.53 feet to the real paint of beginning; Thence continuing South 88 degrees 551 V East 182.65 feet to a point; Thence South 8 degrees 18'10" East 440.66 feet to a point; Thence South 16 degrees 18'25" West 218.04 feet to a point; Thence North 89 degrees 13'51" East 540.22 feet to a point; Thence North 71 degrees 4334" Fast 442,46 feet to a point; Thence North 10 degrees 33'50" East 487.84 fed to a point; Thence South 88 degrees 55'31" East 124.84 feet to a point; ThenceSouth 50 degrees 38'25" East 89.99 feet to a point; Thence 165.33 fed along the are ofa. curve to the right, having a radius of 250.25 fat, a central angle of 37 degrees 51'08", and a long chord bearing South 31 degrees 42'52" East 162,34 fed to a point; Thence North 89 degrees 2944" West 120.24 fat to a paint; Thence South 4 degree 27'17" East 80.30 fed to a point; Thence South 0 degree 30'16" West 230.52 feet to a point; Thence South 10 degrees 31'20" West 123,51 feet to a point; Thence South 30 degrees 14'07" West 119.57 feet to a point; Thence South 50 degrees 50'29" West 134.39 feet to apoint; Thence South 71 degrees 28'48" West 120.64 feet to a point; Thence South 82 degrees 45'52" West 225.84 fed to apoint; Thence South 89 degrees 02'57" West 67.30 feet to apoint•, Thence South 89 degrees 02'57" West 67.30 feet to a point; ThenceNorth 89 degrees 1041" West 825.06 fed to a point; Thence North 77 degrees 29'20" West 148.07 feet to a point, TheneeNorth 89 degrees 10'41" West 160.40 fed to a point lying 65.00 fest East of the West boundary of said Section 3; Thence along a line 65.00 fat East ofand parallel to the West boundary ofsaid Section 3 North 0 degrees 38'11" East 247.64 fed to a point; Therce South 89 degrees 21'49" EAST 156,03 FEET TO A POINT; TheoceNorth 45 degrees 03'16" East 163.61 fed to apoint; Thence North 5 degrees 3931" East 502.42 fed to the point of beginning. PARCEL III -B A portion of the West half of Section 3, Township 3 North, Range 1 West, Boise Meridian, Meridian; Ada County, Idaho, moreparticularly described as follows: Commencing at the comer common to Sections 4, 9, 10 and the said Section 3; Thence North 0 degree 38'1 V East 265 L 19 fed to the quarter corner common to said Sections 3 and 4 as same was reestablished by LS 972 (CP & F lnstmmme No. 7852146, records of Ada County, Idaho); from which the Northwest comer ofsaid Section 3 bears North 0 degree 38'27" Fast 2697.49 feet; Thence North 0 degree 38'27" East 22.64 feet to a 518" iron pin; Thence South 88 degrees 56S 1" East 1977.72 feet to a 518" iron pin and the real point of beginning; Thence South 0 degree 30115" West 413.59 fed to a point; Thence North 68 degrees 54'11" West 26.71 feet to a point; Thence North 68 degrees 54'11" !Vest 26.71 fat to a point; Thence North 0 degree 30'15° East 217.93 feet to a point; Thence 211.88 fed along the arc of a curve to the left, having a radius of 249.75 fed, a central angle of 48 degrees 36'25" and a long chord bearing North 23 degrees 47'57" west 205.58 feet to a point; Thence South 88 degrees 5531" East 109.62 feet to the point of beginning. PARCEL, IV -A A portion of the Southwest quarter of theNorthwest quarter of Section 3, Township 3 North, Range 1 West, Boise Meridian, Meridian, Ada County, Idaho, more particularly described as follovs: Commencing at the comer common to Sections 4, 9, 10 and the said Section 3; Thence North 0 degree 38'11" East, 2651.1.9 feet to the quarter comer common to said Section 3 and 4 as same was reestablished by LS 972 (CP & F Instrument No. 7852146, records of Ada County, Idaho); from which the Northwest comer ofsaid Section 3 bears North 0 degree 38'27" East, 2697.49 fed; Thance North 0 degree 3827" East 22.64 fed to a 518" iron pin; Thence South 88 degrees 55'31" East, 379.53 feet to the real point of beginning; Thence North 5 degree 39'31" East, 290.28 feet to a point; Thence 46.45 feet along the arc of a non -tangent curve to the right, having a radius of 250.00 fed, a central angle of 10 degrees 38'46", and a long chord bearing South 49 degrees 22143" East, 46.39 feet to a point; Thence South 44 degrees 03'20" East, 136.41 feet to a point; Thence South 8 degrees 18'10" Fast, t65.80 fed to a point; Thence North 88 degrees 55`31" West, 182.65 feet to thepoint of beginning. Page EXHIBIT „A" Loan No: 5590258 (Continued) PARCEL [V -B Aportion of Government Lot 4 and the Southwest quarter of ibeNorthwest quarter of Section 3, Township 3 North, Range 1 West, Bo-tse Meridian, Meridian, Ada County, Idaho moreparticularly descrtiW as follows: Commencing at the corner common to Sections 4, 9, 10 and the said Section 3; Thence North 0 degree 38'11" East, 2651.19 feet to the quarter comer common to said Section 3 and as same was reestablished by IS 972 (CP & F InstmmentNo. 7852146, records of Ada County, Idaho); from which the Northwest comer of said Section 3 bears North 0 degree 38'27" Fast, 2697.49 feet; Thence North 0 degree 38'27" Fast 22.64 feet to a 516" iron pin; Thence South 88 degrees 55'31" East, 834.71 feet to a point; Thence North I deuce 0429" East, 77.45 fed to the real point of beginning; Thence 199.31 feet along the arc of curve to the right having a radius of270.00 feet, a central angle of42 degrees 17'41" and a long chord bearing North 65 degrees 1211" West, 194.81 feet to a point; Thence North 44 degrees 03"20" West, 198.06 feet to a point; ThenceNorth 37 degree 38"05" East, 125,90 fed to a point; Thence North 4 degrees 2620" West, 178.94 fed to a point; Thence North 49 degrees 13'43" West, 619.18 feet to a point; Thence North 89 degrees 21'33" West, 39.72 fat to apoint; Thence North 0 degree 3877" East, 178.61 fed to apoint; Thence South 89 degas 2 BY East, 104,94 feet to apoint; Thence North 26 degrees 46'55" East, 463.73 fed to a point; Thence North 13 degrees D5'08" East, 186.18 feet to a point; Thence South 89 degas 23'04" East, 221.37 fed to a point; Thence South 0 degree 3656" West, 30.00 feet to a point; Thence North 89 degrees 23'04" West, 114.43 feet to a point; Thence South 10 degrees 38'1 V West, 162.48 feet to a point; Thence South 5 degrees 36'09" East, 160.95 fat to a point; Thence South 48 degrees 58'55" West, 66.41 fed to a point; Thence South 10 degrees 49'04" West, 123.62 feet to a point; Thence South 12 degrees 00'00" East, 85.00 feet to a point, Thence South 53 degrees 2621" East, 142,60 feet to a point; Thence South 6 degrees 5P5V West, 151.05 feet to apoint; Thence South 41 deges 14'14" East, 171.06 feet to apoint; Thence South 89 degree 1276" East, 122.33 fed to a point; Thence South 43 degrees 03'05" East, 60.00 feet to apoint; Thence South 0 degree 36'15" West, 671.50 feet to the point of beginning. PARCEL IVC A portion of theNorthwest quarter of Section 3, Township 3 North, Range I West, BoiseMeridian, Meridian, Ada County, Idaho, more particularly dscribod as follows: Commencing at the comer common to Sxtions 4, 9, 10 and the said Section 3; Thence North 0 degree 38'11" East, 2651.19 fed to the quarter comer common to said Sections 3 and 4 as same was reestablished by LS 972 (CP & F Instrument No. 7852146, records of Ada County, Idaho); from which the Northwest cornu of said Section 3 bears North 0 degree 3827" East, 2697.49 fat; ThenceNorth 0 deuce 38'27" East 22.64 feet to a 519" iron pin; ThenceSouth 88 degas 5551" East, 1784.61 fed to apoint; Thence North 1 degree 04'29" East, 303,15 feet to the real point of beginning; Thence North 66 degrees 28'40" West, 157.70 fed to a point; Thence North 56 degrees 5639" West, 717.37 feet to a point, Thence North 89 degrees 2344" West, 36.12 feet to apoint; Thence North 0 degree 36'28" East, 5.00 fat to a point; Thence 154,59 fed along the arc of a non -tangent curve to the le8, having a radius of 225.00 fed, a central angle of 39 degrees 22'00', and a long chord bearing North 19 degrees 04'45" west, 151.57 feet to a point; Thence North 38 degrees 4545' West, 39.00 fed to a point; Thence North 51 degrees 14'15" East, 110,00 fat to a point; Thence North 26 degrees 11'31" West, 134.78 feet to a point; Thence North 4 degrees 04'20" West, 277.45 feet to a point; Thence North 31 degrees 4635" West, 241.56 feet to a point; Thence North 0 degree 36'56" East, 132.59 fed to apoint; Thence North 89 degrees 23'04" West, 110.00 fat to a point; Thence North 0 degree 36'56" East, 30.00 fed to a point; Thence South 89 degrees 23'04" East, 175.94 feet to a point; Thence South 78 degrees 05'29" But, 71.13 fed to a point; Thence South 63 degrees 13'16" East, 65.34 feet to a point; Thence South 56 degrees 28'32" East, 79.07 fed to a point; Thence South 53 degrees 15'09" East, 86.07 fed to a point; Thence South 42 degrees 31'18" East, 70.53 feet to a point; Thence South 35 degrees 28'22" East, 77.08 feet to a point; Thence South 5 degrees 49'06" East, 249.89 feet to a point; Thence South 8 degrees 16'07" Fast, 125.42 fed to a point; Thence South 13 degrees 56'20" East, 266.06 fed to a point; Thence South 42 degrees 4329" Fast, 283.07 feet to a point; ThenceNorth 61 degas 49'13" East, 165.37 feet to a point; ThenceNorth 11 degrees 01742" West, 399.24 fed to a point; Thence South 89 degrees 18'49' Bast, 398.40 fed to apoint; Thence South 79 degrees 02' 15" East, 61.16 fed to a point; Thence South 60 degrees 4015' East, 164.39 fat to apoint; Thence South 85 degrees 1018" Fast, 136.30 fed to a point; Thence South 0 degree 30'15" West, 235.93 feet to a point; Thence North 89 degrees 29'45" West, 80.00 fed to a point; Thence South 78 deuces 3349" West, 182.71 feet to a point; Thence South i I degrees 45'15" West, 185.77 fed to a point; Thence South 0 deuce 3095" West, 154.10 fat to a point; Thence 288.86 fed along the are of a non -tangent curve to the tett, having a radius of 425.00 fat, a central angle of 38 degrees 5631", and a long chord bearing South 63 degrees 04'11" west, 283.33 fed to the point of beginning. Page 3 EXHIBIT "A" Loan No: 5590258 (Continued) PARCEL IV -D A portion of the Southeast quarter of theNorthwest quarter of Section 3, Township 3 Nortb, Range I West, Boise Meridian, Meridian, Ada County, Idaho, more particularly described as follows: Commencing at the corner common to Sections 4, 9, 10 and the said Section 3; Thence North 0 degree 3811" Bast, 2651.19 feet to the quarter corner common to said Sections 3 and 4 as same was reestablished by LS 972 (CP & F Instrument No. 7852146, records of Ada County, Idaho); from which the Northwest comer of said Section 3 bears North 0 degree 38'27" East, 2697.49 feet; Thence North 0 degree 38'27" Fast 22.64 feet to a 518" iron pin; Thence South 88 degrees 5531" East, 1614.53 feet to the real point of beginning; Thence North 10 degrees 33'50" East, 72.37 fed to a point; PARCEL IV -E A portion of the Southeast quarter of the Northwest quarter of Section 3, Township 3 North, Range t West, Boise Meridian, Meridian, Ada County, Idaho, more particularly described as follows: Commencing at the corner common to Sections 4, 9, 10 and thesaid Section 3; ThtnceNorth 0 degree 3811" Fast, 2651.19 feet to the quarter corner common to said Sections 3 and 4 as same was rcatablisbcd by LS 972 (CP do F Instrument No. 7852146, records of Ada County, Idaho); from which the Northwest comer of said Section 3 beats North 0 degree38'27" Fast, 2697.49 feet; Thence North 0 degree 3827" Bast 22.64 feet to a 518" iron pin; Thence South 88 degrees 5531" East 1977.72 feet to a SB' iron pia and the teal point of beginning; Thence North 86 degrees 5531" West, 109.62 feet to a point; Thence 11.06 feet along the are of a naa-tangarnt curve to the left, having a radius of 249.75 feet, a central angle of 2 degrees 32'16", and a long chord bearing North 49 degrees 22'17" West, 11.06 feet to a point; Thence North 50 degrees 3825" West, 94.32 fed to a point; Thence 60.45 fat along the arc of a curve to the left, having a radius 017680,00 fed, a central angle of 5 degrees 05136", and a long chord bearing North 53 degrees 11'13' West, 60.43 fed to a point; Thence 30.13 fat along the arc of a curve to the right, having a radius of 20.00 feet, a central angle of 86 degrees 100", and a long chord bearing North 12 degrees 34'36" West, 27.36 fat to a point, Thence North 30 degrees 34'50" East, 84.13 fat to a point; Thence 269.77 fed along the arc of a curve to the right, having a radius of 375.00 fed, a antral angle of 41 deg =13'04", and a long chord bearing North 51 degrees 1121" East, 263.99 fat to a point; Thence South 0 degree 3015" West, 369.89 fat to the point of beginning. PARCEL V Loris I and 52 in Block 5, and Lot I I in Block 9 of Cherry Lane VillageNo. I Subdivision, according to theplat thereof filed in Book 44 a€Plats at Pages 3537 thru 3538, records o€Ada County, Idaho. PARCEL VI Leets 12 and 21 in Block 9 and Lot 4 in Block 11 and Lot 53 in Block 5 of Cherry Lane VillageNo. 2 Subdivision, according to theplat thereof filed in Book46 ofPlats at Pages 3791 and 3792, records of Ada County, Idaho. PARCEL VII Lot 83 in Block 5 and Lot 14, in Block 13 Cherry Lane Village No. 3 Subdivision according to the official plat thereof filed in Book 58 of Plats at Pages 5473 thru 5475, records of Ada County, Idaho. PARCEL VIII Loot 28 in Block I I and foot 39 in Block 13 Cherry Lane Village No. 4 Subdivision according to the official plat thereof Sled in Book 63 of Plats at Pages 6376 and 6377, records of Ada County, Idaho. PARCEL IX Lot 9 in Block 1 of Record Of Survey No. 802 ofadjusted lot lints for Lots 8,9 and.10, in Block I ofThe Lake at Cherry Lane, according to the plat thereof, filed in Book 52 of Plats at Pages 4569 and 4570, records ofAda County, Idaho. EXCEPT that portion lying within the original Lot 8, PARCEL X Lot 5 in Block I and Lot I3 in Block 2, The Lake at Cherry Lane No. 2, according to the plat thereof, filed in Book 54 of Plats at Pages 4882 and 4893, records of Ada County, Idaho. PARCEL XI Lot 24 in Block 2 of The Take at Cherry Lane No. 3 Subdivision according to the official plat thereof filed in Book 70 of Plats at Paget 7167 and 7169, records of Ada County, Idaho. PARCEL XII Lot 19 in Block 1 and Lot 46 in Block 2 of The lake at Cherry Lane No. 4 Subdivision, according to the offtcW plat thereof, filed in Book 74 of Plats at Page 7674 and 7675, records of Ada County, Idaho. Page 4 EXHIBIT "A" Loan No: 5590258 (Continued) Page 5 THIS EXHIBIT "A" IS EXECUTED ON MAY 17, 2006. GRANTOR: LAKEVIEW MERIDIAN INVESTORS, LLC OAAS LANEY, LLC, Member of LAKEVIEW MERIDIAN INVESTORS, LLC WH]TEROCK INVESTME C, Momber of OAAS LANEY, LLC By: T. ER a r o WHITERocK INVEST E LANEYLAND em6erofOAAS AN£Y,LLC By:__, EN LAN EY, eral artner of LANEYLAND R.R. DAVIS P,p5pERTIES, INC.yNtemb o AKEVIEW MERIDIAN INVESTORS, LLC By: r—fJ RI RD R. DAVIS, Prresiclent of R.R. DAVIS PROPERTIES, INC, R.R. DAVIS P RTI£TINW r By: RI XAD R. DAVIS rei ent of R.R. DAVIS PROPERTIES, INC. LAORA RRC Ltib"—i.a1.90.0M Cwr, NrW-0F ��pau k.sa�, 1001, uMpn.,RnMa, .CP.WMNGPRDOVIrtM1GNn�I.£C Maft�1A•1, r l May 12, 2006 MERIDIAN CITY COUNCIL MEETING May 16, 2006 APPLICANT ITEM NO. 10 REQUEST Request for a Waiver of the First Year Lease Payment Obligation Pursuant to the Lease Agreement for Lakeview Meridian Golf Club: AGENCY COMMENTS CITY CLERK: See attached CITY ENGINEER: CITY PLANNING DIRECTOR: CITY ATTORNEY CITY POLICE DEPT: CITY FIRE DEPT: CITY BUILDING DEPT: CITY WATER DEPT: CITY SEWER DEPT: CITY PARKS DEPT: 0 MERIDIAN SCHOOL DISTRICT: 3J ADA COUNTY HIGHWAY DISTRICT: SANITARY SERVICE COMPANY CENTRAL DISTRICT HEALTH: NAMPA MERIDIAN IRRIGATION: SETTLERS IRRIGATION: IDAHO POWER: US WEST: INTERMOUNTAIN GAS: MERIDIAN POST OFFICE: OTHER: Contacted: Emailed: Date: Phone: Staff Initials: Materials presented at public meetings shall become property of the City of Meridian. OARS LAN EYC May 1, 2006 Mayor Tammy de Weerd Council President Shaun Wardle Meridian City Council City of Meridian Meridian, Idaho 83642 Dear Mayor de Weerd and Council President Wardle, MAY -- 8 2006 City of Meridian City Clerk Office Thank you for allowing us to present a progress update on the Lakeview Meridian Golf Club. As you certainly gathered from the information, we are very excited about the progress we have made in our first year of operation. We appreciate your confidence and look forward to a mutually beneficial long term relationship with the City of Meridian. Needless to say, we have made substantial capital improvements this year and although the pace of future upgrades is likely to be a bit less aggressive, much more is coming. Accordingly, we are formally requesting a waiver of the first year lease payment obligation pursuant to the lease agreement. Again, thank you for your support and we hope that you areas pleased as we are with our progress on this crown jewel of Meridian. We look forward ,to having you visit the course facility for a walk through and will look to schedule this in the next several weeks. Very truly yours, Dick Davis Lakeview Meridian o ub P.O. Box 2020 • Boise, Idaho 83701 Ph. (208) 429-9596 • Facsimile (208) 429-9597 0 April 21, 2006 MERIDIAN CITY COUNCIL MEETING April 25, 2006 APPLICANT ITEM NO. 3 REQUEST Lakeview Golf Course Lease Agreement Extension AGENCY COMMENTS CITY CLERK: CITY ENGINEER: CITY PLANNING DIRECTOR: CITY ATTORNEY CITY POLICE DEPT: CITY FIRE DEPT: CITY BUILDING DEPT: CITY WATER DEPT: CITY SEWER DEPT: CITY PARKS DEPT: MERIDIAN SCHOOL DISTRICT: ADA COUNTY HIGHWAY DISTRICT: SANITARY SERVICE COMPANY CENTRAL DISTRICT HEALTH: NAMPA MERIDIAN IRRIGATION: SETTLERS IRRIGATION: IDAHO POWER: US WEST: INTERMOUNTAIN GAS: MERIDIAN POST OFFICE: OTHER: Contacted: See attached Date: Phone: Emailed:. Staff Initials: Materials presented at public meetings shall become property of the City of Meridian. _z'_. - r Tara Green From: Ted Baird Sent: Tuesday, April 18, 2006 3:45 PM To: Bill Nary Cc: Will Berg; Tara Green Subject: FW: Current financial model for LakeView Meridian Follow Up Flag: Follow up Flag Status: Green Attachments: Lease Extension Model 10.5.05.xis This is on the Precouncil agenda for next week. It pertains to an upcoming amendment to the Golf Course Lease to firm -up the terms of the second 30 -year lease period. From: Kelly Fuller [mailto:kelly@oaaslaney.com] Sent: Friday, December 23, 2005 9:42 AM To: Ted Baird; Kim Clarke Cc: T. Erik Oaas Subject: Current financial model for LakeView Meridian Ted, Here is the most recent financial model. You will probably want to print the tabs `Assumptions' and 'Summary' only. (The tab 'Model' shows all years and the `Summary' tab rolls the years into 5 year increments to make it more readable.) Kim, Please print the first two tabs for Erik. Thanks, Kelly Fuller 4/21/2006 OAAk^S IIIII NEYLLC February 15, 2006 Councilman Shaun Wardle President, Meridian City Council City Hall Meridian, Idaho 83651 Dear Councilman Wardle, X.,,, � �A_ of ivlei°i is l ',lark 0f c We are pleased to be invited to the City Council to provide you a status update and present our plans for the LakeView Meridian Golf Club. Additionally, as promised we have prepared a proposal for the 30 year extension to the lease executed last fall. First, the lease extension proposal incorporates the concept that the City of Meridian ought to be compensated for its ownership of the course based on the revenues earned at Lakeview Meridian Golf Club. There is a simple formula for calculating the amount earned by using a fixed percentage of each revenue component, (i.e. green fees, cart rental, food and beverage and pro shop), summing all four component amounts and comparing that total to a guaranteed minimum payment. The City will realize the larger of the two amounts from its investment subject only to a deduction for capital improvements (i.e. allocation of 25% of total eligible expenditures). The plan summary is attached. Second, we are pleased to tell you about all the exciting and positive changes we have made to the Clubhouse, and the status of the Maintenance Building as well as the planned site improvements. A site drawing is attached. Finally, we have exciting plans for the first three hole improvements to be undertaken this year. We will begin reconstructing the greens on holes 1, 6 and 7 and installing other necessary changes as soon as the weather allows. The drawings showing the proposed changes to each hole are attached. Thank you again for your support, we hope the City of Meridian is pleased with our progress to date and we look forward to the exciting things to come at Lakeview Meridian Golf Club. V truly ours, Q.UCj� 'char avis *Lakeeridian Golf Club C P.O. Box 2020 • Boise, Idaho 83701 Ph. (208) 429-9596 • Facsimile (208) 429-9597 Oaas Laney LakeView Meridian Golf Course Lease Analysis — Assumptions February 15, 2006 Minimum Payment to City (Years 2035 — 2065) Minimum lease rate beginning in 2035 is $100,000 per year Minimum lease rate beginning in 2045 is $150,000 per year Minimum lease rate beginning in 2055 is $200,000 per year Alternative Minimum Payment Calculation Revenue Source (A) * Revenue Multiplier (B) = Gross Lease Amount Greens Fees 5.0% Golf Carts 4.5% Food & Beverage 2.5% Pro Shop 1.0% The City of Meridian will contribute 25% of Capital Improvement expenditures beginning in 2035. Capital expenditures that are eligible for the City's contribution allocation will include; course repair, hole redesign, irrigation, golf carts and other maintenance equipment, pressure washer, drill seeder, maintenance facility and other similar items. 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