20250714Ex C Operation Agreement.pdf

ar k-law Water System, LLCM
Operation Agreement
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Dated of , 2010.
Bear Claw Water System Operation Agreement Page 1

TABLE OF CONTENTS
ARTICLE 1 INTERPRETATION............
1.1 Liberal Construction..........
1.2 Consistent with Idaho Law..........
1.3 Covenant Running With Land..........
1.4 Percentage of Owners or Mortgagees
1.5 Declarant is Original Owner..........
1.6 Captions and Exhibits..........
1.7 Inflationary Increase in Dollar Limits..........
1.8 Definitions..........
1.8.1 "The Act"..........
1.8.2 "Allocated Interests"..........
1.8.3 "Assessment............
1.8.4 "Bear Claw Water System, LLC.............
1.8.5 "Board............
1.8.6 "Building............
1.8.7 "Bylaws"..........
1.8.8 "Common Elements............
1.8.9 "Common Expenses............
1.8.10 "Common Expense Liability............
1.8.11 "Property, Real Property or Parcel............
1.8.12 "Conveyance............
1.8.13 "Declarant............
1.8.14 "Declarant Control............
1.8.15 "Operation Agreement............
1.8.16 "Development Rights"..........
1.8.17 "Dispose" or"Disposition............
1.8.18 "Eligible Mortgagee"..........
1.8.19 "Foreclosure............
1.8.20 "Identifying Number"..........
1.8.21 "Manager ..........
1.8.22 "Mortgage............
1.8.23 "Mortgagee"..........
1.8.24 "Mortgagee of a Parcel............
1.8.25 "Person"..........
1.8.26 "Purchaser............
1.8.27 "Renting or Leasing............
1.8.28 "Residential Purposes............
1.8.29 "Special Declarant Rights............
1.8.30 "Survey Map, Plat Map and Plans............
1.9 Construction and Validity..........
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ARTICLE 2 DESCRIPTION OF REAL PROPERTY.................. Exhibit A
ARTICLE 3 DESCRIPTION OF PARCELS.................... Exhibit B
ARTICLE 4 DESCRIPTION OF THE LOCATION OF THE SYSTEM EQUIPMENT.......
Exhibit C
ARTICLE 5 DESCRIPTION OF THE WATER SYSTEM................... Exhibit D
ARTICLE 6 DESCRIPTION OF COMMON ELEMENTS.....................Exhibit E
ARTICLE 7 DESCRIPTION OF LIMITED COMMON ELEMENTS...................
7.1 Limited Common Elements....................
ARTICLE 8 ALLOCATED INTERESTS......................
ARTICLE 9 BEAR CLAW WATER SYSTEM......................
9.1 Form of Bear Claw Water System, LLC ..........
9.2 Membership..........
9.2.1 Qualification..........
9.2.2 Transfer of Membership..........
9.3 Voting..........
9.3.1 Number of Votes..........
9.3.2 Multiple Owners..........
9.3.3 Proxies..........
9.3.4 Bear Claw Water System, LLC Owned Parcels..........
9.3.5 Pledged Votes..........
9.4 Meetings, Notices and Quorums..........
9.4.1 Meetings..........
9.4.2 Quorums..........
9.5 Bylaws..........
9.5.1 Adoption of Bylaws..........
9.5.2 Bylaws Provisions...........
MANAGEMENT OF THE WATER SYSTEM........................
10.1 Administration of the Water System..........
10.2.1 Owner Election..........
10.2.3 Removal..........
10.3 Management by Board..........
10.3.1 On Behalf of Bear Claw Water System, LLC..........
10.3.2 Not on Behalf of Bear Claw Water System, LLC..........
10.3.3 Budget Approval..........
10.4 Authority of Bear Claw Water System, LLC..........
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10.5 Borrowing by Bear Claw Water System, LLC..........
10.6 Bear Claw Water System, LLC Records and Funds..........
10.6.1 Records and Audits..........
10.6.2 Fund Commingling
10.7 Common Elements Encumbrance..........
10.7.1 In General..........
10.7.2 Agreement..........
10.7.3 Void Transactions..........
10.7.4 Support Right..........
10.7.5 Prior Encumbrances..........
ARTICLE 11 USE, REGULATION OF USES...........................
11.1 Residential Parcels..........
11.2 Limited Common Elements.......... .
11.3 Common Element..........
11.4 Adjoining Parcel..........
11.5 Limited Common Element Maintenance..........
11.5.1 Decisions by Board..........
11.5.2 Performance of Work..........
11.5.3 Board Approval..........
11.5.4 Owner Pays Cost..........
11.5.5 Effect on Insurance..........
ARTICLE 12 COMMON EXPENSES AND ASSESSMENTS..................
12.1 Estimated Expenses elements..........
12.2 Payment by Owners..........
12.3 Commencement of Assessments..........
12.4 Allocated Liability..........
12.5 Limited Common Element..........
12.6 Only Some Parcels Benefited..........
12.7 Insurance Costs..........
12.8 Utility and Water Fees..........
12.9 Assessments for Judgment.......... .
12.10 Owner Misconduct..........
12.11 Reallocation..........
12.12 Lien for Assessments..........
12.12.1 Lien..........
12.12.2 Priority..........
12.12.3 Recording as Notice..........
12.12.4 Limitation on Action
12.12.5 Foreclosure..........
12.12.6 Lien Survives Sale..........
12.12.7 Owner Liability..........
12.12.8 Late Charges.......... .
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12.12.9 Attorney's Fees..........
12,12.10 Assessment Certificate..........
12.13 Acceleration of assessments..........
12.14 Delinquent Assessment Deposit, Working Capital..........
12.14.1 Delinquent Assessment Deposit..........
12.14.2 Working Capital Contribution..........
12.15 Notification on Sale of Parcel..........
ARTICLE 13 INSURANCE....................................
13A In General..........
13.2 Coverage Not Available..........
13.3 Required Provisions..........
13.4 Claims Adjustment..........
13.5 Owner's Additional Insurance..........
13.6 Certificate..........
ARTICLE 14 DAMAGE OR DESTRUCTION, REPAIRS.............................
14.1 Definitions, Significant Damage, Repair, Emergency Work..........
14.2 Initial Board Determinations..........
14.3 Notice of Damage or Destruction..........
14.4 General Provisions..........
14.4.1 Duty to Restore..........
14.4.2 Damage not Restored..........
14.5 Restoration by Board..........
14.5.1 Contract and Contractors..........
14.5.2 Insurance Trustee...........
14.6 Decision to Terminate................
ARTICLE 15 CONDEMNATION..........................
15.1 Condemnation of the Entire Water System..........
15.2 Common Element Condemnation..........
15.3 Parcel Owner's..........
ARTICLE 16 COMPLIANCE WITH OPERATION AGREEMENT.....................
16.1 Enforcement
16.2 No Waiver of Strict Performance..........
ARTICLE 17 LIMITATION OF LIABILITY.........................
17.1 Liability for Utility Failure, Etc...........
17.2 No Personal Liability..........
17.3 Indemnification of Board Members..........
ARTICLE 18 PARCEL OWNER RIGHTS..............
18.1 Change in Manager..........
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18.2 Abandonment of Water System..........
18.3 Sale of the Water System..........
18.4 Change in Percentages..........
18.5 Copies of Notices..........
18.6 Effect of Operation Agreement Amendments..........
18.8 Inspection of Books..........
ARTICLE 19 EASEMENTS..........................
19.1 General.......... .
19.2 Utility, Etc., Easements..........
19.3 Bear Claw Water System, LLC Functions..........
ARTICLE 20 AMENDMENT OF OPERATION AGREEMENT, SURVEY MAP AND PLANS
20.1 In General..........
20.2 Challenge to Validity
20.3 Recording..........
20.4 Execution..........
20.5 Material Amendments..........
20.6 Map and Plans Amendment..........
ARTICLE 21 DECLARANT RIGHTS.........................
21.1 Special Declarant Rights..........
21.1.1 Sale or Dedication of the Water System..........
22.1.2 Operation of the Water System..........
21.1.3 Exercise of Development Rights..........
21.1.4 Declarant Control..........
21.1.5 Declarant Reservations..........
21.1.6 Declarant's Easements..........
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ARTICLE 22 MISCELLANEOUS.........................
22.1 Notices for All Purposes..........
22.1.1 Delivery of Notice..........
22.2 Severability..........
22.3 Transfer of Declarant's Powers..........
22.4 Effective Date..........
22.5 Reference to Survey Map and Plans..........
22.6 Headings..........
22.7 Time..........
22.8 Exhibits..........
Memorandum of Recording
22.9 Enforcement..........
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-DeRrClaw, Water System, LLC
Operation. AW, cement
For the purpose of formalizing the Bear Claw Water System, setting up an operation
agreement to conform with state law, and for the possible dedication of the Bear Claw
Water System LLC to the Bear Claw Home Owner's Association and the Owners thereof,
the undersigned, owners and lessees of said Water System, make the following Operation
Agreement:
By acceptance of a conveyance, contract for sale, lease, rental agreement, or any form of
security agreement or instrument, or any privileges of use or enjoyment, respecting the
property or any property pursuant to this Operation Agreement, it is agreed that this
Operation Agreement, together with the survey map and plans referred to herein, states
covenants, conditions, restrictions and reservations affecting a common plan for the
operation, maintenance of the Bear Claw Water System.
Water system, maintenance, operation and development mutually beneficial to all of the
described properties,and property owners,and that the covenants,conditions,restrictions,
reservations and plans are binding upon the entire Bear Claw Subdivision and upon each
such property, and upon its owners or possessors and their heirs, personal
representatives, successors and assigns, through all successive transfers of all or part of
any property within the Bear Claw subdivision or any security interests therein, without
requirement of further specific reference or inclusion in deeds, contracts or security
instruments and regardless of any subsequent forfeitures, foreclosures or sales of units
under security instruments.
ARTICLE 1
INTERPRETATION
1.1 Liberal Construction: The provisions of this Operation Agreement shall be liberally
construed to effectuate its purpose of creating a uniform plan for the development
and operation of the Bear Claw Water System under the provisions of Idaho law.
It is intended and covenanted also that, insofar as it affects this Operation
Agreement and this Operation Agreement shall be liberally construed to effectuate
the intent of this Operation Agreement insofar as reasonably possible.
1.2 Consistent with Idaho Law: The terms used herein are intended to have the same
meaning given in the Idaho Statutes unless the context clearly requires otherwise
or to so define the terms would produce an illegal or improper result.
1.3 Covenant Running With Land: It is intended that this Operation Agreement shall be
operative as a set of covenants running with the land,or equitable servitude,binding
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on the successors and assigns, all subsequent Owners of property within the Bear
Claw Subdivision, together with their grantees, successors, heirs, executors,
administrators, devises or assigns.
1.4 Percentage of Owners or Mortgagees: For purposes of determining the percentage
of owners or mortgagees, or percentage of voting power for, approving a proposed
decision or course of action in cases where an owner owns, or a mortgagee holds
mortgages on, more than one property within the Bear Claw Subdivision, such
owner shall be deemed a separate owner for each such property so owned and
such mortgagee shall be deemed a separate mortgagee for each such first
mortgage so held.
1.5 Declarant is Original Owner: Declarant is the original owner of all property and the
water system and will continue to be deemed the owner thereof except as
conveyances or documents changing such ownership.
1.6 Captions and Exhibits: Captions given to the various Articles and Sections herein
are for convenience only and are not intended to modify or affect the meaning of
any of the substantive provisions hereof. The various exhibits referred to herein and
attached hereto shall be deemed incorporated herein by reference as though fully
set forth where such reference is made.
1.7 Inflationary Increase in Dollar Limits: Any dollar amounts specified in this Operation
Agreement in connection with any proposed action or decision of the board or Bear
Claw Water System, LLC may, in the discretion of the board, be increased
proportionately by the increase in the consumer price index to adjust for any
deflation in the value of the dollar.
1.8 Definitions:
1.8.1 "The Act" shall mean the Idaho Statutes, Title 61, or as amended.
1.8.2 "Allocated Interests" means the undivided interest in the common
elements, the common expense liability, and votes in Bear Claw
Water System, LLC allocated to each Property more particularly
provided for in Article 8.
1.8.3 "Assessment" means all sums chargeable by Bear Claw Water
System, LLC against a property including, without limitation: (a)
regular and special Assessments for Common Expenses, charges,
fines imposed by the Bear Claw Water System, LLC; (b)interest and
late charges on any delinquent account; and (c) costs of collection,
including reasonable attorney's fees,incurred by the Bear Claw Water
System, LLC in connection with the collection of a delinquent owner's
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account.
1.8.4 "Bear Claw Water System, LLC" means all of the owners acting as a
group in accordance with the Bylaws and with this Operation
Agreement as it is duly recorded and as they may be lawfully
amended, which Bear Claw Water System, LLC is more particularly
provided for in Article 9.
1.8.5 "Board"means the board of directors of the Bear Claw Water System,
LLC provided for in Section 10.3.
1.8.6 "Building" means the building or buildings containing any part of the
water system, pumps, and tanks and comprising a part of the
property.
1.8.7 "Bylaws"shall mean the Bylaws of the Bear Claw Water System, LLC
provided for in Article 9.
1.8.8 "Common Elements" means all portions of the Water System other
than the owner properties.
1.8.9 "Common Expenses" means expenditures made by or financial
liabilities of the Bear Claw Water System, LLC, together- with any
allocations to reserves for the maintenance, operation or further
development of the water system..
1.8.10 "Common Expense Liability"means the liabilityfor common expenses
allocated to each unit pursuant to Article 8.
1.8.11 "Property,Real Property or Parcel"means any fee, leasehold or other
estate or interest in, over or under the land described in Exhibit A,
including buildings, structures, fixtures and other improvements
j thereon and easements, rights and interests appurtenant thereto
which by customer, usage or law pass with a conveyance of land
although not described in the contract of sale or instrument of
conveyance. "Property" included parcels, with or without upper or
lower boundaries, and spaces that may be filled with air or water and
all personalty intended for use in connection therewith.
1.8.12 "Conveyance" means any transfer of the ownership of an Owner's
Property, including a transfer by deed or by real estate contract and
with respect to Real Property by deed, lease or assignment thereof,
but shall not include a transfer solely for security.
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1.8.13 "Declarant" means any person or group of persons acting in concert
who (a) executed as Declarant this Operation Agreement, or (b)
reserves or succeeds to any special declarant right under the
Aeration Agreement.
1.8.14 "Declarant Control" means the right, if expressly reserved by this
Operation Agreement, of the declarant or persons designated by the
declarant.
1.8.15 "Operation Agreement" means this Operation Agreement and any
amendments thereto.
1.8.16 "Development Rights" means any right in this Operation Agreement
to: (a) add real properties or improvements to the Water System; (b)
create Common Elements or Limited Common Elements for the
operation, maintenance or development of the Water System.
1.8.17 "Dispose" or"Disposition" means a voluntary transfer or conveyance
to a purchaser or lessee of any legal or equitable interest in a
Property, but does not include the transfer or release of a security
interest.
1.8.18 "Eligible Mortgagee" means the holder of a mortgage on a Property
that has filed with the secretary of the Bear Claw Water System, LLC
a written request that it be given copies of notices of any action by the
Bear Claw Water System, LLC that requires the consent of
mortgagees.
1.8.19 "Foreclosure" means a forfeiture or judicial or nonjudicial foreclosure
of a mortgage or a deed in lieu thereof.
1.8.20 "Identifying Number" means a symbol or address that identifies only
' one Parcel.
1.8.21 "Manager" means the person retained or appointed by the board to
perform such management and administrative functions and duties
with respect to the Water System as are delegated to such person
and as are provided in a written agreement between such person and
the Bear Claw Water System, LLC.
i 1.8.22 "Mortgage" means a mortgage or deed of trust that creates a lien
against a Property and also means a real estate contract for the sale
of a Parcel.
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1.8.23 "Mortgagee" means the beneficial owner or the designee of the
beneficial owner, of an encumbrance on a Parcel created by a
mortgage or deed of trust and shall also mean the vendor, or the
designee of a vendor,of a real estate contract for the sale of a Parcel.
1.8.24 "Mortgagee of a Parcel" means the holder of a mortgage on a Parcel
which mortgage was recorded simultaneous with or after the
recordation of this Operation Agreement. .
1.8.25 "Person" means a natural person, corporation, partnership, limited
partnership, trust, governmental subdivision or agency or other legal
entities.
1.8.26 "Purchaser" means any person, other than declarant, who by means
of a disposition acquires a legal or equitable interest in a Parcel other
than (a) a leasehold interest, including renewal options of less than
twenty years at the time of creation of the Parcel, or(b)as security for
an obligation.
1.8.27 "Renting or Leasing" a Parcel means the granting of a right to use or
occupy a Parcel, for a specified term or indefinite term (with rent
reserved on a periodic basis), in exchange for the payment of rent
(that is, money, property or other goods or services of value), but shall
not mean and include joint ownership of a Parcel by means of joint
tenancy, tenancy-in-common or other forms of co-ownership.
1.8.28 "Residential Purposes" means use for dwelling or recreational
purposes or both.
1.8.29 "Special Declarant Rights"means any rights expressly reserved in this
Operation Agreement for the benefit of declarant.
1.8.30 "Survey Map, Plat Map and Plans" means the survey map, plat map
and the plans recorded forthe Beal-Claw Subdivision and as attached
hereto.
1.9 Construction and Validity:
1.9.1 All provisions of the Operation Agreement are severable.
1.9.2 The rule against perpetuities may not be applied to defeat any
provision of the Operation Agreement.
1.9.3 In the event of a conflict between the provisions of the Operation
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Agreement and the Covenants of the Bear Claw Covenants, this
Agreement shall prevail.
1.9.4 The creation of this Operation Agreement shall not be impaired and
title to the Parcel and common elements shall not be rendered
unmarketable or otherwise affected by reason of an insignificant
failure of the Operation Agreement or survey map, plat map or plans
or any amendment thereto to comply with Idaho Law.
ARTICLE 2
DESCRIPTION OF REAL PROPERTY
The real property included in the Bear Claw Water System, shall include conveyance of
Lot 22A, Block 2, Parcel#PR019010020220A,Bonner County, Idaho,to the limited liability
company known as the Bear Claw Water System, LLC.
ARTICLE 3
DESCRIPTION OF PARCELS
Exhibit B, attached hereto and incorporated herein as if set out in full, is a map showing
all the Real Property which is served by the Bear Claw Water System and subject to this
Operation Agreement.
ARTICLE 4
DESCRIPTION OF THE LOCATION OF THE SYSTEM EQUIPMENT
Exhibit C attached hereto and incorporated herein as if set out in full, is the map of the
Real Property upon which the pumps, tanks and other elements of the Bear Claw Water
System is located and which shall be dedicated to the Bear Claw Property Owners.
ARTICLE 5
DESCRIPTION OF THE WATER SYSTEM
i
Exhibit D, attached hereto and incorporated herein as if set out in full, is a description of
all the equipment of the Bear Claw Water System.
i
ARTICLE 6
DESCRIPTION OF COMMON ELEMENTS
Except as otherwise specifically allocated by the provisions of Section 4.1, Article 7, or
other provisions of this Operation Agreement or amendments hereto, the common
elements consist of all portions of the Water System as follows:
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6.1 The real property described on Exhibit A.
6.2 The equipment described on Exhibit D.
6.3 The easements described on Exhibit E,attached hereto and incorporated herein as
if set out in full.
6.4 All other parts of the property necessary or convenient to its existence, maintenance
and safety, or normally in common use for the Bear Claw Water System.
ARTICLE 7
DESCRIPTION OF LIMITED COMMON ELEMENTS
7.1 Limited Common Elements: The limited common elements are allocated for the
exclusive use of the owner or owners of the Parcel or Parcels to which they are
allocated and, in addition,to any limited common elements provided by law or other
provisions of the Operation Agreement or amendments thereto, consist of:
7.1.1 Water lines or equipment which serve only one parcel owner, including but
not limited to water lines under or across a particular parcel.
7.1.2 Maintenance, development or operation of Limited Common Elements are
the sole responsibility of the owner of the parcel the Limited Common
Element serves.
7.1.3 A limited common element may only be reallocated between Parcels with the
approval of the board and by an amendment to the Operation Agreement
executed by the owners of, and approved in writing by the mortgagees
holding mortgages against the Parcels to which the limited common element
I was and will be allocated. The board shall approve the request of the owner
or owners under this Section within thirty days unless the proposed
reallocation does not comply with the Act or the Operation Agreement. The
failure of the board to act upon a request within such period shall be deemed
approval thereof.
7.1.4 Sixty-seven percent (67%) of the Parcel Owners within the Bear Claw
Subdivision, including the owner of the Parcel to which the limited common
element will be assigned or incorporated,must agree to reallocate a common
element as a limited common element, or a limited common element as a
l common element. Such reallocation or incorporation shall be reflected in an
amendment to the Operation Agreement, survey map or plans. Provided,
however,this Section shall not apply with respect to any such reallocation or
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incorporation made as a result of the exercise of any development right by
the Bear Claw Water System, LLC.
ARTICLE 8
ALLOCATED INTERESTS
The allocated interests of each Parcel (that is, the undivided interest in the common
elements,the common expense liability and the votes in the Bear Claw Water System, LLC
allocated to each Parcel) are set out herein. The common elements are not subject to
partition, and any purported conveyance, encumbrance,judicial sale or other voluntary or
involuntary transfer of any part of the Water System is void.
ARTICLE 9
BEAR CLAW WATER SYSTEM, LLC
9.1 Form of Bear Claw Water System, LLC: The Bear Claw Water System, LLC shall
be organized as a for profit limited liability company under the laws of the State of
Idaho and shall be known as the Bear Claw Water System, LLC. The owners shall
file a certificate of formation with the State of Idaho.
9.2 Membership:
9.2.1 Qualification: Each owner of a Parcel shall be a member of the Bear
Claw Water System, LLC and shall be entitled to one membership for
each Parcel so owned; provided, that if a Parcel has been sold on
contract, the contract purchaser shall exercise the rights of the Parcel
owner for purposes of the Bear Claw Water System, LLC. Ownership
of a Parcel shall be the sole qualification for membership in the Bear
Claw Water System, LLC.
9.2.2 Transfer of Membership: The Bear Claw Water System, LLC
membership of each Parcel owner shall be appurtenant to the Parcel
giving rise to such membership and shall not be assigned,
transferred,pledged,hypothecated,conveyed or alienated in anyway
except upon the transfer of title to said Parcel and then only to the
transferee of title to such Parcel. Any attempt to make a prohibited
transfer shall be void. Any transfer of title to a Parcel shall operate
automatically to transfer the membership in the Bear Claw Water
System, LLC appurtenant thereto to the new owner thereof.
9.3 Voting:
9.3.1 Number of Votes: The total voting power of all owners shall be one
vote per parcel.
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9.3.2 Multiple Owners: If there are multiple Owners of a parcel, the parcel
shall still only be entitle to one vote.
9.3.3 Proxies: Votes allocated to a Parcel may be cast pursuant to a proxy
duly executed by a Parcel owner. If a Parcel is owned by more than
one person, each owner of the Parcel may register a protest to the
casting of votes by the other owners of the Parcel through a duly
executed proxy. A Parcel owner may not revoke a proxy given
pursuant to this Section except by actual notice of revocation to the
person presiding over a meeting of the Bear Claw Water System,
LLC. A proxy is void if it is not dated or purports to be revocable
without notice. Unless stated otherwise in the proxy, a proxy
terminates eleven months after its date of issuance.
9.3.4 Bear Claw Water System, LLC Owned Parcels: No votes allocated
to a Parcel owned by the Bear Claw Water System, LLC may be cast,
and in determining the percentage of votes required to act on qny
matter, the votes allocated to Parcels owned by the Bear Claw Water
System, LLC shall be disregarded. Lot 22A shall not vote on any
issue.
9.3.5 Pledged Votes: If an owner is in default u nder a first mortgage on the
Parcel for ninety (90)consecutive days or more, the mortgagee shall
automatically be authorized to declare at any time thereafter that the
Parcel owner has pledged his or her vote on all issues to the
mortgagee during the continuance of the default. If the board has
been notified of any such pledge to a mortgagee, or in the event the
record owner or owners have otherwise pledged their vote regarding
special matters to a mortgagee under a duly recorded mortgage, only
the vote of such mortgagee or vendor, will be recognized in regard to
the special matters upon which the vote is so pledged, if a copy of the
instrument with this pledge has been filed with the board.
Amendments to this subsection shall only be effective upon the
written consent of all the voting owners and their respective
mortgagees, if any.
9.4 Meetings, Notices and Quorums:
9.4.1 Meetings: A meeting of the Bear Claw Water System, LLC must be held at
least once each year. Special meetings of the Bear Claw Water System,
LLC may be called by the president, a majority of the board, or by Parcel
owners having twenty percent of the votes in the Bear Claw Water System,
LLC. Not less than ten or more than sixty days in advance of any meeting,
the secretary or other officer shall cause notice to be hand delivered or sent
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prepared by first class mail to the mailing address of each Parcel or to any
other mailing address designated in writing by the Parcel owner. The notice
of any meeting shall state the time and place of the meeting and the items
on the agenda to be voted on by the members, including the general nature
of any proposed amendment to the Operation Agreement, changes in the
previously approved budget that result in a change in assessment
obligations, and any proposal to remove a director or officer.
9.4.2 Quorums:
(a) A quorum is present throughout any meeting of the Bear Claw Water
System, LLC if the owners of Parcels to which twenty-five percent of the
votes of the Bear Claw Water System, LLC are allocated are present in
person or by proxy at the beginning of the meeting.
(b) A quorum is deemed present throughout any meeting of the board if
persons entitled to cast fifty percent of the votes on the board are present at
the beginning of the meeting.
9.5 Bylaws of Bear Claw Water System, LLC:
9.5.1 Adoption of Bylaws: Bylaws (and amendments thereto) for the
administration of the Bear Claw Water System, LLC and the property, and
for other purposes not inconsistent with the Act or with the intent of this
Operation Agreement shall be adopted by the Bear Claw W ater System, LLC
upon concurrence of those voting owners holding a majority of the total
voting power. Amendments to the Bylaws may be adopted at any regular or
special meeting.
9.5.2 Bylaws Provisions: The Bylaws may contain supplementary, not
inconsistent, provisions regarding the operation and administration of the
Water System Operation Agreement.
ARTICLE 10
MANAGEMENT OF THE WATER SYSTEM
10.1 Administration of the Water System: Administration of the Water System shall be
in accordance with the provisions of this Operation Agreement and the Articles of
Incorporation and Bylaws of the Bear Claw Water System, LLC which are made a
i
part hereof.
10.2 Election and Removal of Board:
10.2.1 Owner Election: Within thirty days after the dedication of the Water
System to the Bear Claw Subdivision Owners,the Parcel owners shall
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elect a board of at least three members,who must be Parcel owners.
The board shall elect the officers. Such members of the board and
officer shall take office upon election.
10.2.3 Removal: The Parcel owners, by a two-thirds vote of the voting power
in the Bear Claw Water System, LLC present and entitled to vote at
any meeting of the Parcel owners at which a quorum is present, may
remove any member of the board with or without cause.
10.3 Management by Board:
10.3.1 On Behalf of Bear Claw Water System, LLC: Except as otherwise
provided in the Operation Agreement, the board shall act in al.l
instances on behalf of the Bear Claw Water System, LLC. In the.
performance of their duties, the officers and members of the board
are required to exercise ordinary and reasonable care.
10.3.2 Not on Behalf of Bear Claw Water System, LLC: The board shall not
act on behalf of the Bear Claw Water System, LLC to amend the
Operation Agreement in any manner that requires the vote or
approval of the Parcel owners pursuant to Section 21.1, or to
terminate the Water System; but the board may fill vacancies in its
membership for the unexpired portion of any term.
10.3.3 Budget Approval: Within thirty days after adoption of any proposed
budget for the Water System, the board shall provide a summary of
the budget to all the Parcel owners and shall set a date for a meeting
of the Parcel owners to consider ratification of the budget not less
than fourteen nor more than sixty days after mailing of the summary.
Unless at that meeting the owners of Parcels to which a majority of
the votes in the Bear Claw Water System, LLC are allocated reject the
budget, the budget is ratified, whether or not a quorum is present. In
the event the proposed budget is rejected or the required notice is not
given, the periodic budget last ratified by the Parcel owners shall be
continued until such time as the Parcel owners ratify a subsequent
budget proposed by the board.
10.4 Authority of the Bear Claw Water System, LLC:
10.4.1 The Bear Claw Water System, LLC acting by and through the board,
or a manager r
System and the owners,shall enforce the provisions of this Operation
Agreement and of the Bylaws and shall have all powers and authority
Bear Claw Water System Operation Agreement Page 17

permitted to the Bear Claw Water System, LLC under this Operation
Agreement, including without limitation:
(a) Adopt and amend Bylaws, rules and regulations.
(b) Adopt and amend budgets for revenues,
expenditures and reserves and impose and collect
assessments for common expenses from Parcel
owners.
(c) Hire and discharge or contract with managing
agents and other employees, agents and independent
contractors.
(d) Institute, defend or intervene in litigation or
administrative proceedings in its own name on behalf of
itself or two or more Parcel owners on matters affecting
the Water System.
(e) Make contracts and incur liabilities.
(f) Regulate the use,maintenance,repair, replacement
and modification of common elements.
(g) Cause additional improvements to be made as a
part of the common elements.
(h) Acquire, hold, encumber and convey in its own
name any right, title, or interest in personal property to
operate the Water System.
(i) Grant easements, leases, licenses and concessions
through or over the common elements.
0) Impose and collect any payments, fees or charges
for the use, or operation of the common elements,other
than limited common elements described in sections
4.1.2 and 4.1.4 and for services provided to Parcel
owners.
(k) Impose and collect charges for late payment of
assessments or fees and, after notice and an
opportunity to be heard by the board or by such
representative designated by the board and in
Bear Claw Water System Operation Agreement Page 18

accordance with such procedures as provided in the
Operation Agreement or Bylaws or rules and
regulations adopted by the board, levy reasonable fines
in accordance with a previously established scheduled
thereof adopted by the board and furnished to the
owners for violations of the Operation Agreement,
Bylaws and rules and regulations of the Bear Claw
Water System, LLC.
(1) Impose and collect reasonable charges for the
preparation and recording of amendments to the
Operation Agreement, resale certificates and
statements of unpaid assessments.
(m) Provide for the indemnification of its officers and
board and maintain directors' and offices' liability
insurance.
(n) Impose and collect reasonable charges for the
operation of the Water System.
(o) Exercise any other powers conferred by the
Operation Agreement or Bylaws.
(p) Exercise all other powers that may be exercised in
this state by the same type of corporation as the Bear
Claw Water System, LLC.
(q) Exercise any other powers necessary and proper
for the governance and operation of the Bear Claw
Water System, LLC.
(r) Maintain and repair all Water System equipment
j and any limited common elements,if such maintenance
or repair is reasonably necessary in the discretion of the
board to protect the common element or preserve or
maintain the Water System, or to maintain or repair a
limited common element if the owner of said limited
common element Parcel has failed or refused to
perform said maintenance or repair within a reasonable
time after written notice of the necessity of said
i maintenance or repair has been delivered by the board
to the owner; provided that the board shall levy a
Bear Claw Water System Operation Agreement Page 19

special charge against the Parcel of such owner for the
cost of such maintenance or repair.
(s) Pay any amount necessary to discharge any lien or
encumbrance levied against any part of the Water
System which is claimed to or may, in the opinion of the
board, constitute a lien against Water System property
or against the common elements, rather than merely
against the interest therein of particular owners. Where
one or more owners are responsible for the existence of
such lien,they shall be jointly and severally liable for the
cost of discharging it, and any costs and expenses
(including court costs and attorney fees)incurred by the
board by reason of such lien or liens shall be specially
charged against the owners and the Parcels
responsible for the extent of their responsibility.
10.4.2 The board's power hereinabove enumerated shall be limited in that
the board shall have no authority to acquire and pay for out of the
Bear Claw Water System, LLC funds a capital addition or
improvement (other than for purposes of restoring, repairing nor
replacing portions of the common elements) having a total cost in
excess of Five Thousand Dollars ($5,000.00), without first obtaining
the affirmative vote of a majority of owners at a meeting called for
such purpose, or if no such meeting is held, then the written consent
of a majority of owners at a meeting called for such purpose, or if no
such meeting is held,then the written consent of a majority of owners;
provided that any expenditure or contract for each capital addition or
improvement in excess of Twenty-Five Thousand Dollars
($25,000.00) must be approved by owners having no less than sixty-
seven percent (67%) of the voting power.
10.4.3 Nothing herein contained shall be construed to give the Bear Claw
Water System, LLC authority to conduct an active business for profit
on behalf of all of the owners or any of them.
10.4.4 The board and its agents or employees may enter any Parcel or
limited common element when necessary in connection with any
maintenance or repair for which the board is responsible or in the
event of emergencies. Such entry shall be made with as little
i inconvenience to the owners as practicable and any damage caused
thereby shall be repaired by the board paid for as a common expense
if the entry was due to an emergency, or for the purpose of
maintenance or repairs to common or limited common elements
Bear Claw Water System Operation Agreement Page 20

where the repairs were undertaken by or under the direction of
authority of the board; provided, if the repairs or maintenance were
necessitated by or for the Parcel entered or its owners, or requested
by its owners, the costs thereof shall be specially charged to such
Parcel.
10.5 Borrowing by the Bear Claw Water System, LLC: In the discharge of its duties and
the exercise of its powers as set forth in Section 10.3.1, but subject to the limitations
set forth in this Operation Agreement, the board may borrow funds on behalf of the
Bear Claw Water System, LLC and to secure the repayment of such funds, assess
each Parcel (and the owner thereof) for said Parcel's pro-rata share of said
borrowed funds and the obligation to pay said pro-rata share shall be a lien against
said Parcel and the undivided interest in the common elements appurtenant to said
Parcel. Provided, that the owner of a Parcel may remove said Parcel and the
allocated interest in the common elements appurtenant to such Parcel from the lien
of such assessment by payment of the allocated interest in common expense
liability attributable to such Parcel. Subsequent to any such payment, discharge or
satisfaction, the Parcel and the allocated interest in the common elements
appurtenant thereto shall thereafter be free and clear of the liens so paid, satisfied
or discharged. Such partial payment, satisfaction or discharge shall not prevent the
lienor from proceeding to enforce his rights against any Parcel and the allocated
interest in the common elements appurtenant thereto not so paid, satisfied or
discharged.
10.6 Bear Claw Water System, LLC Records and Funds:
10.6.1 Records and Audits: The Bear Claw Water System, LLC shall keep
financial records sufficiently detailed to enable the Bear Claw Water
System, LLC to provide resale certificates. All financial and other
records shall be made as reasonably available for examination by any
Parcel owner, the owner's authorized agents and all mortgagees. At
least annually, the Bear Claw Water System, LLC shall prepare or
cause to be prepared a financial statement of the Bear Claw Water
System, LLC in accordance with generally accepted accounting
principles. If the Water System consists of fifty or more developed
Parcels, the financial statements of the Water System shall be
audited at least annually by a certified public accountant. If the Water
System consists of fewer than fifty developed Parcels,an annual audit
is also required but may be waived annually by owners of Parcels to
which sixty percent of the votes are allocated.
10.6.2 Fund Commingling: The funds of the Water System Bear Claw Water
System, LLC shall not be commingled with the funds of any other
Bear Claw Water System,LLC,including any Home Owner Bear Claw
Bear Claw Water System Operation Agreement Page 21

Water System, LLC, nor with the funds of any manager of the Bear
Claw Water System, LLC or any other person responsible for the
custody of such funds. Any reserve funds of the Bear Claw Water
System, LLC shall be kept in a segregated account and any
transaction affecting such funds, including the issuance of checks,
shall require the signature of at least two persons who are officers or
directors of the Bear Claw Water System, LLC.
10.7 Common Elements Encumbrance:
10.7.1 In General: In order to secure financing for maintenance, repairs,
development or expansion, portions of the common elements may be
subjected to a security interest by the Bear Claw Water System, LLC
if the owners of Parcels to which at least eighty percent (80%) of the
votes in the Bear Claw Water System, LLC are allocated, agree to
that action. Proceeds of the financing are an asset of the Bear Claw
Water System, LLC and not any individual owner.
10.7.2 Agreement: An agreement to subject common elements to a security
interest must be evidenced by the execution of an agreement, or
ratification thereof, in the same manner as a deed, by the requisite
number of Parcel owners. The agreement must specify a date after
which the agreement will be void unless recorded before that date.
The agreement and all ratification thereof must be recorded in every
county in which a portion of the Water System is situated and is
effective only upon recording.
10.7.3 Void Transactions: Any purported conveyance, encumbrance or
other voluntary transfer of common elements, unless made pursuant
to this Section, is void.
10.7.4 Support Right: An encumbrance of common elements pursuant to
this Section shall not deprive any Parcel of its rights of access and
support.
10.7.5 Prior Encumbrances: A conveyance or encumbrance of common
elements pursuant to this Section shall not affect the priority or validity
of pre-existing encumbrances.
ARTICLE 11
USE, REGULATION OF USES
11.1 Residential Parcels: The Water System shall be used only for such reasonable
residential purposes or other reasonable uses normally incident to such purposes
Bear Claw Water System Operation Agreement Page 22

and for purposes of operating the Bear Claw Water System, LLC and managing the
Water System. The Water System shall not be used for farming, manufacturing or
any commercial uses.
11.2 Limited Common Elements: Each Parcel owner shall,at his sole expense maintain
and repair his/her Limited Common Elements. Each Parcel owner shall be
responsible for the construction, alteration, maintenance, repair or replacement of
any water lines, equipment or fixtures, under or over the owner's Parcel which may
be in or connected with his/her Parcel and connected the Common Elements.
11.3 Common Element: No Parcel owner may connect to a Common Element, or alter
any in way a Common Element without the express written consent of the Board.
11.4 Adioining Parcel: No Parcel owner may connect to a Limited Common Element on
an adjoining Parcel or alter in any way a Limited Common Element on another
parcel without the express written consent of the Board and the adjoining Parcel
Owner. The failure of the board to act upon a request for such connection or
alteration within sixty (60) days shall be deemed approval thereof.
11.5 Limited Common Element Maintenance: Limited common elements, as defined in
Article 7, are for the sole and exclusive use of the Parcels for which they are
reserved or assigned; provided,that the use,condition and appearance thereof may
be regulated under provisions of the Bylaws, rules or this Operation Agreement
including the following:
11.5.1 Decisions by Board: Decisions with respect to the standard of
appearance and condition of limited common elements, and with
respect to the necessity for, and manner of, caring for, maintaining,
developing or repairing limited common elements ("Maintenance
Work" herein), shall be made by the board.
11.5.2 Performance of Work: Performance of such maintenance, repair or
construction work shall be carried out only by contractors licensed and
bonded with the State of Idaho.
11.5.3 Board Approval: Owners may not in any way alter, or install limited
common elements without prior written approval of the board. In
applying for Board Approval the Owner must submit a detailed plan
showing the location of the water lines to be installed or altered and
all work to be preformed.
11.5.4 Owner Pays Cost: Parcel owners will be responsible for the cost of
such maintenance work forthe limited common elements reserved for
or assigned to their Parcels.
Bear Claw Water System Operation Agreement Page 23

11.5.5 Backflow Devices: Backflow devices as required by DEQ shall
installed at each property currently using water from said system,
regardless of whether it has improvements or not. Said cost of
backflow devices shall be at the sole cost and expense of the owner
of said property or properties. Installation of the backflow shall be
completed by September 1,2010 for current users and within 30 days
for new owners.
11.5.6 Effect on Insurance: Nothing shall be done in the common or limited
common elements which will increase the rate of insurance on the
common elements or Parcels without the prior written consent of the
board. Nothing shall be done in the common or limited common
elements which would be in violation of any laws.
ARTICLE 12
COMMON EXPENSES AND ASSESSMENTS
12.1 Estimated Expenses: Within sixty(60)days prior to the beginning of each calendar
year, or such other fiscal year as the board may adopt, the board shall:
12.1.1 Estimate the charges including common expenses and any special
charges for particular Parcels to be paid during such year;
12.1.2 Make provision for creating, funding and maintaining reasonable
reserves for contingencies and operations, as well as for
maintenance, repair, replacement and acquisition of common
elements;
I
12.1.3 Take into account any expected income and any surplus available
'i from the prior year's operating fund.
12.1.4 Without limiting the generality of the foregoing but in furtherance
thereof, the board shall create and maintain from regular monthly
assessments a reserve fund for replacement of those common
elements which can reasonably be expected to require replacement
or a major repair prior to the end of its useful life.
2.1.5 Calculate the contributions to said reserve fund so that there are
sufficient funds therein to replace or perform such major repair, to
each common element covered by the fund at the end of the
estimated useful life of each such common element.
12.1.6 The initial board may at any suitable time, establish the first such
estimate. If the sum estimated and budgeted at any time proves
Bear Claw Water System Operation Agreement Page 24

inadequate for any reason (including non-payment for any reason of
any owner's assessment), the board may at any time levy a further
assessment, which shall be assessed to the owners according to
Section 12.4. Similarly,if the sum estimated and budgeted, and being
collected and/or already collected, at any time proves excessive, the
board may reduce the amount being assessed and/or apply existing
funds (in excess of current needs and required reserves) against
future assessments and/or refund such excess funds.
12.2 Payment by Owners: Each owner shall be obligated to pay his/her share of
common expenses and special charges made pursuant to this Article to the
treasurer for the Bear Claw Water System, LLC in equal monthly installments on or
before the first day of each month during such year or in such other reasonable
manner as the board shall designate. No owner may exempt himself from liability
for payment of assessments for any reason, including waiver of use or enjoyment
of any of the common elements or abandonment of the owner's Parcel.
12.3 Commencement of Assessments: Current monthly assessments of $25.00 may
change at anytime at the sole discretion of the current owner of the water system.
This may include a base fee plus usage charge. The base fee may be adjusted
from time to time at the discretion of the Water Bear Claw Water System, LLC.
New assessments, whether they pertain to monthly assessments, special
assessments, or any other costs associated with the water system shall commence
upon recording of this document. Members will be notified of "Special"
assessments and shall have 30 days to pay said assessment. After 30 days any
"special" assessment shall be deemed delinquent and the Bear Claw Water
System, LLC shall have full authority to collect said sums as stated in section 12.12
Lien for Assessments.
12.4 Allocated Liability: Except for assessments under Sections 12.5, 12.6, 12.7 and
12.8, all common expenses must be assessed against all the Parcels in accordance
with the allocations set forth by the Board as set out in this section 12. Any past
due common expense or installment thereof bears interest at the rate established
by the Bear Claw Water System, LLC pursuant to Section 12.12.11.
12.5 Limited Common Element: Any common expense associated with the operation,
maintenance, repair or replacement of a limited common element shall be paid by
the owner of or assessed against the Parcels to which the limited common element
is assigned equally.
12.6 Only Some Parcels Benefited: The board may elect that any common expense or
portion thereof benefiting fewerthan all of the Parcels must be assessed exclusively
against the Parcels so benefited.
Bear Claw Water System Operation Agreement Page 25

12.7 Insurance Costs: The board may elect that the costs of insurance be assessed in
proportion to risk.
12.8 Utility and Water Fees: The board may elect that the costs of utilities must be
assessed in proportion to usage by installing water meters on individual Parcels at
any time, The cost of the meters and the installation shall be born by each
individual member.
12.9 Assessments for Judgment: Assessments to pay a judgment against the Bear Claw
Water System, LLC may be made only against the Parcels in the Water System at
the time the judgment was entered in proportion to their allocated common expense
liabilities at the time the judgment was entered.
12.10 Owner Misconduct: To the extent that any common expense is caused by the
misconduct of any Parcel owner, the Bear Claw Water System, LLC shall assess
that expense against the owner's Parcel.
12.11 Reallocation: If common expense liabilities are reallocated, common expense
assessments and any installment thereof not yet due shall be recalculated in
accordance with the reallocated common expense liabilities.
12.12 Lien for Assessments:
12.12.1 Lien: The Bear Claw Water System, LLC has a lien on a Parcel for
any unpaid assessments levied against a Parcel from the time the
assessment is due.
12.12.2 Priority: A lien under Section 12.12 shall be prior to all other liens and
encumbrances on a Parcel except: (a) liens and encumbrances
recorded before the recording of the Operation Agreement; (b) a
mortgage on the Parcel recorded before the date on which the
assessment sought to be enforced became delinquent; and (c) liens
for real property taxes and other governmental assessments or
charges against the Parcel.
12.12.3 Recording as Notice: Recording of the Operation Agreement
constitutes record notice and perfection of the lien for assessments.
While no further recording of any claim of lien for assessment under
this Section shall be required to perfect the Bear Claw Water System,
LLC's lien, the Bear Claw Water System, LLC may record a notice of
claim of lien for assessments under this Section in the real property
records of any county in which the Water System is located. Such
recording shall not constitute the written notice of delinquency to a
mortgagee.
Bear Claw water System Operation Agreement Page 26

12.12.4 Limitation on Action: A lien for unpaid assessments and the personal
liability for payment of assessments is extinguished unless
proceedings to enforce the lien or collect the debt are instituted within
three years after the amount of the assessments sought to be
recovered becomes due.
12.12.5 Foreclosure: The lien arising under Section 12.12 may be enforced
judicially by the Bear Claw Water System, LLC or its authorized
representative in the manner set forth in the Idaho for Foreclosures.
The Bear Claw Water System, LLC or its authorized representative
shall have the power to purchase the Parcel at the foreclosure sale
and to acquire, hold, lease, mortgage, or convey the same. Upon an
express waiver in the complaint of any right to a deficiency judgment
in a judicial foreclosure action,the period of redemption shall be eight
months. Nothing in this Section shall prohibit an Bear Claw Water
System, LLC from taking a deed in lieu of foreclosure.
12.12.6 Lien Survives Sale: The lien arising under Section 12.12 shall not be
affected by the sale or transfer of the subject Parcel.
12.12.7 Owner Liability: In addition to constituting a lien on the Parcel, each
assessment shall be the joint and several obligation of the owner or
owners of the Parcel to which the same are assessed as of the time
the assessment is due. Inn a voluntary conveyance the grantee of a
Parcel shall be jointly and severally liable with the grantor for all
unpaid assessments against the latter up to the time of the grantor's
conveyance, without prejudice to the grantee's right to recover from
the grantor the amounts paid by the grantee therefor. Suit to recover
a personal judgment for any delinquent assessment shall be
maintainable in any court of competent jurisdiction without foreclosing
or waiving the lien securing such sums.
12.12.8 Late Charges: The Bear Claw Water System, LLC may from time to
time establish reasonable late charges and a rate of interest to be
charged on all subsequent delinquent assessments or installments
thereof. In the absence of another established nonusurious rate,
delinquent assessments shall bear interest from the date of
delinquency at the maximum rate permitted under the Idaho Code on
the date on which the assessments became delinquent. The initial
late charge for any payments received 30 days after the date the
payment was due shall be TEN ($10.00) dollars.
12.12.9 Attorney's Fees: The prevailing party shall be entitled to recover any
costs and reasonable attorney's fees incurred in connection with the
Bear Claw Water System Operation Agreement Page 27

collection of delinquent assessments, whether or not such collection
activities result in suit being commenced or prosecuted to judgment.
In addition, the prevailing party shall be entitled to recover costs and
reasonable attorney's fees if it prevails on appeal and in the
enforcement of a judgment.
12.12.10 Assessment Certificate: The Bear Claw Water System, LLC, upon
written request, shall furnish to a Parcel owner or a mortgagee a
statement signed by an officer or authorized agent of the Bear Claw
Water System, LLC setting forth the amount of unpaid assessments
against that Parcel. The statement shall be furnished within fifteen
days after receipt of the request and is binding on the Bear Claw
Water System, LLC,the board an every Parcel owner,unless sand to
the extent known by the recipient to be false.
12.13 Acceleration of assessments: In the event any monthly assessment or special
charge attributable to a particular Parcel remains delinquent for more than sixty(60)
days, the board may, upon fifteen (15) days' written notice to the owner of such
Parcel, accelerate and demand immediate payment of all, or such portion as the
board determines,of the monthly assessments and special charges which the board
reasonably determines will become due during the next succeeding twelve (12)
months with respect to such Parcel.
12.14 Delinquent Assessment Deposit, Working Capital:
12.14.1 Delinquent Assessment Deposit:
(a) A Parcel owner may be required by the board or by the
manager, from time to time, to make and maintain a deposit
not less than one month nor in excess of three months
estimated monthly assessment and charges, which may be
collected as are other assessments and charges. Such
deposit shall be held in a separate fund, be credited to the
Parcel owned by such owner and be for the purpose of
establishing a reserve for delinquent assessments.
(b) Resort may be had thereto at any time when such owner
is ten days or more delinquent in paying his monthly or other
assessments and charges. Aid deposits shall not be
considered as advance payments of regular assessments. In
the event the board should draw upon said deposit as a result
of a Parcel owner's delinquency in payment of any
assessments, said owner shall continue to be responsible for
the immediate and full payment of said delinquent assessment
Bear Claw Water System Operation Agreement Page 28

(and all penalties and costs thereon) and thus the full
restoration of said deposit, and the board shall continue to
have all of the rights and remedies for enforcing such
assessment payment and deposit restoration as provided by
this Operation Agreement and by law.
(c) Upon the sale of a Parcel, the seller owner thereof shall
not be entitled to a refund from the Bear Claw Water System,
LLC of any deposit or reserve account made or maintained
with respect to such Parcel pursuant to this or any other
Section of this Operation Agreement; rather, any such deposit
or reserve account shall continue to be held by the Bear Claw
Water System, LLC for the credit of such Parcel, and the
Parcel purchaser shall succeed to the benefit thereof, and the
Parcel seller shall be responsible for obtaining from the
purchaser appropriate compensation therefor.
12.14.2 Working Capital Contribution: The first purchaser of any Parcel shall pay
to the Bear Claw Water System, LLC, in addition to other amounts due, an
amount equal to two months of monthly assessments as a contribution to the
Bear Claw Water System, LLCs' working capital.
12.15 Notification on Sale of Parcel: Promptly upon the conveyance of a Parcel, the new
Parcel owner shall notify the Bear Claw Water System, LLC of the date of the
conveyance and the new Parcel owner's name and address. Until the Bear Claw
Water System, LLC receives the name and address of the new Parcel owner, the
former Parcel owner shall remain responsible for all assessments and fees.
ARTICLE 13
INSURANCE
13.1 In General: The Bear Claw Water System, LLC shall maintain, to the extent
reasonably available:
13.1.1 Insurance on the Water System,which shall include, but is not limited
to, equipment, improvements and betterment of the Parcel on which
the Water System is located. The total amount of insurance after
application of any deductibles shall not be less than one hundred
percent of the actual cash value of the insured property at the time
the insurance is purchased and at each renewal date.
13.1.2 Liability insurance, including medical payments insurance, in an
amount determined by the board but not less than One Million Dollars,
Bear Claw Water System Operation Agreement Page 29

covering all occurrences commonly insured against for death, bodily
injury and property damage arising out of or in connection with the
use, ownership or maintenance of the common elements.
13.1.3 Insurance against loss of personal property of the Bear Claw Water
System, LLC by fire,theft and other losses with deductible provisions
as the board deems advisable.
13.1.4 Such other insurance as the board deems advisable.
13.2 Coverage Not Available: If the insurance described in Section 13.1 is not
reasonably available, or is modified,canceled or not renewed,the Bear Claw Water
System, LLC promptly shall cause notice of that fact to be hand delivered or sent
prepaid by first class Parceled States mail to all Parcel owners, to each eligible
mortgagee and to each mortgagee to whom a certificate or memorandum of
insurance has been issued at their respective last known address. The Bear Claw
Water System, LLC in any event may carry any other insurance it deems
appropriate to protect the Bear Claw Water System, LLC or the Parcel owners.
13.3 Required Provisions: Insurance policies carried pursuant to this Article shall:
13.3.1 Provide that the Bear Claw Water System, LLC is insured under the
policy with respect to liability arising out of the Bear Claw Water
System, LLC's interest in the common elements.
13.3.2 Provide that the insurer waives its right to subrogation under the
policy as to any and all claims against the Bear Claw Water System,
LLC, the owner of any Parcel and/or their respective agents,
employees or tenants, and members of their household, and of any
defenses based upon co-insurance or upon invalidity arising from the
acts of the insured.
13.3.3 Provide that no act or omission by any Parcel owner, unless acting
within the scope of the owner's authority on behalf of the Bear Claw
Water System, LLC, nor any failure of the Bear Claw Water System,
LLC to comply with any warranty or condition regarding any portion of
the premises over which the Bear Claw Water System, LLC has no
direct control, will void the policy or be a condition to recovery under
the policy.
13.3.4 Provide that if, at the time of a loss under the policy, there is another
insurance in the name of a Parcel owner covering the same risk
covered by the policy, the Bear Claw Water System, LLC's policy
provides primary insurance, and that the liability of the insurer
Bear Claw Water System Operation Agreement Page 30

thereunder shall not be affected by, and the insurer shall not claim
any right of setoff, counterclaims, apportionment, proration,
contribution or assessment by reason of, any other insurance
obtained by or for any Parcel owner or any mortgagee.
13.3.5 Contain, if available, an agreed amount and inflation guard
endorsement.
13.4 Claims Adjustment: Any loss covered by the property insurance under this Article
must be adjusted with, and paid to the Bear Claw Water System, LLC. Subject to
the provisions of Article 14, the proceeds must be disbursed first for the repair or
restoration of the damaged property. Parcel owners and lienholders are not entitled
to receive payment of any portion of the proceeds unless there is a surplus of
proceeds after the property has been completely repaired or restored.
13.5 Owner's Additional Insurance: An insurance policy issued to the Bear Claw Water
System, LLC does not prevent a Parcel owner from obtaining insurance for the
owner's own benefit for the owner's limited common elements.
13.5.1 The Bear Claw Water System, LLC shall not obtain insurance on any
limited common elements.
13.6 Certificate: An insurer that has issued an insurance policy under this Article shall
issue certificates or memoranda of insurance to the Bear Claw Water System, LLC
and, upon written request, to any Parcel owner or holder of a mortgage.
ARTICLE 14
DAMAGE OR DESTRUCTION, REPAIRS
14.1 Definitions, Significant Damage, Repair, Emergency Work:
14.1.1 As used in this Article,the term"Significant Damage"means damage
i or destruction, whether or not caused by casualty, to any part of the
property which the board is responsible to maintain or repair: (a)for
which funds are not available in the maintenance and repair or
contingency budget of the Bear Claw Water System, LLC to make
timely repairs; and (b) which has a significant adverse impact on the
ability of an owner or owners to use the Water System or any
significant portion of the Water System.
14.1.2 As used in this Article,the term"Repair"means to repair, reconstruct,
rebuild or restore the Water System, including but not limited to any
equipment, water pipes, buildings or improvements which suffered
Bear Claw Water System Operation Agreement Page 31

significant damage, to substantially the same condition in which it
existed prior to the damage or destruction and to conform to then
applicable governmental rules and regulations.
14.1.3 As used in this Article, the term "Emergency Work" shall mean that
work which the board deems reasonably necessary to avoid further
damage, destruction or substantial diminution in value of the Water
System.
14.2 Initial Board Determinations: In the event of significant damage to any part of the
Water System, the board shall promptly and in all events within thirty days after the
date of significant damage, or, if the significant damage did not occur at a particular
identifiable time, after the date of its discovery, make the following determinations
with respect thereto employing such advice as the board deems advisable.
14.2.1 The nature and extent of the significant damage and the equipment,
water lines, improvements and other property directly affected
thereby.
14.2.2 A reasonably reliable estimate of the cost to repair the significant
damage, which estimate shall, if reasonably practicable, be based
upon a firm bid obtained from a properly licensed, insured and
bonded contractor.
14.2.3 The anticipated insurance proceeds, if any, to be available for
insurance covering the loss based on the amount paid or initially
offered by the insurer.
14.2.4 The amount, if any, that the estimated cost of repair exceeds the
anticipated insurance proceeds therefor and the amount of
assessment to each Parcel if such excess was paid as a common
expense an specially assessed against all the Parcels.
14.2.5 The board's recommendation as to whether such significant damage
should be repaired.
14.3 Notice of Damage or Destruction: The board shall promptly, and in all events within
thirty days after the date of significant damage, provide each owner, and each first
mortgagee with a written notice summarizing the initial board determination made
under Section 14.2. If the board fails to do so within said thirty days, then any
owner or mortgagee may make the determination required under Section 14.2 and
give the notice required under this Section.
14.4 General Provisions:
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14.4A Duty to Restore: Any portion of the Water System for which
insurance is available which is significantly damaged shall be repaired
promptly by the Bear Claw Water System, LLC unless: (a)the Water
System is terminated; (b) repair would be illegal under any state or
local health or safety statute or ordinance; or(c)eighty percent of the
Parcel owners, vote not to repair. Even if the significant damage is
not to be repaired, the board shall still have authority to perform
emergency work. The cost of repair in excess of insurance proceeds
and reserves is a common expense.
14.4.2 Damage not Restored: If all or any portion of the damaged portions
of the Water System are not repaired (regardless of whether such
damage is significant), the insurance proceeds attributable to the
damage common elements shall be used to restore the damaged
area to a condition compatible with the remainder of the Water
System_
14.5 Restoration by Board: If the damage (regardless of whether such damage is
significant) is to be repaired pursuant to Section 14.4, then:
14.5.1 Contract and Contractors: The board shall have the authority to
employ engineers and attorneys, advertise for bids, let contracts to
contractors and others and to take such other action as is reasonably
necessary to effectuate the repair and restoration. Contracts for such
repair and restoration shall be awarded when the board, by means of
insurance proceeds and sufficient assessments has, provision for the
cost thereof. The board may further authorize the insurance carrier
to proceed with repair upon satisfaction of the board that such work
will be appropriately carried out.
14.5.2 Insurance Trustee: The board may enter into a written agreement in
recordable form with any reputable financial institution or trust or
escrow company that such firm or institution shall act as an insurance
trustee to adjust and settle any claim for a loss in excess of Fifty
Thousand Dollars($50,000.00), orfor such firm or institution to collect
the insurance proceeds and carry out the provisions of this Article.
14.6 Decision to Terminate: In the event of a decision to terminate the Water System
and not to repair and restore damage and destruction, the board may nevertheless
expend such of the insurance proceeds and funds of the Bear Claw Water System,
LLC as the board deems reasonably necessary for emergency work (which
emergency work may include but is not necessarily limited to removal of the
damaged or destroyed property and distribute the remaining funds to the Parcel
owners.
Bear Claw Water System Operation Agreement Page 33

ARTICLE 15
CONDEMNATION
15.1 Condemnation of the Entire Water System: If a governmental agency condemns,
brings an injunction, stop work order, cease and desist order, or otherwise
terminates or limits the Bear Claw Water System, LLCs' right to operate the Water
System, the Board shall make the following determinations with respect thereto,
employing such advice as the board deems advisable.
15.1.1 The nature and extent portion of the Water System effected and
whether or not it is possible for the Water System to continue to
operate.
15.1.2 A reasonably reliable estimate of the cost to repair or modify the
Water System to comply with governmental regulations..
15.1.3 Whether or not it is possible to comply with the governmental
regulations, and whether there are other alternatives available to
obtain water for the Parcel owners.
15.1.4 The board's recommendation as to whether to defend against the
government's action(s).
15.2 Common Element Condemnation: If all or art of the common elements is acquired
p q
by condemnation, the Board shall use the award to off set assessments or fees of
the owners and if the Board finds there is an excess may equally divide the excess
amount the Parcel owners.
15.3 Parcel Owner's: If the board does not take action as set out herein, any Parcel
Owner or group of Parcel Owners may take action to defend the action(s) taken by
the governmental agency.
ARTICLE 16
COMPLIANCE WITH OPERATION AGREEMENT
16.1 Enforcement: Each owner shall comply strictly with the provisions of this Operation
Agreement,the Bylaws and administrative rules and regulations passed hereunder,
as the same may be lawfully amended from time to time and with all decisions
adopted pursuant to this Operation Agreement,the Bylaws and administrative rules
and regulations. Failure to comply shall be grounds for an action to recover sums
due for damages, or injunctive relief, or both, maintainable by the board (acting
through its officers on behalf of the owners), or by the aggrieved Parcel owner on
his own against the party failing to comply.
Bear Claw Water System Operation Agreement Page 34

16.2 No Waiver of Strict Performance: The failure of the board in any one or more
instances to insist upon the strict performance of this Operation Agreement, of the
Bylaws or to exercise any right or option contained in such documents or to serve
any notice or to institute any action, shall not be construed as a waiver or a
relinquishment for the future of such term, covenant, condition or restriction, but
such term,covenant, condition or restriction shall remain in full force an effect. The
receipt by the board of any assessment from an owner, with knowledge of any such
breach, shall not be deemed a waiver of such breach, and no waiver by the board
of any provision hereof shall be deemed to have been made unless expressed in
writing and signed by the board.
ARTICLE 17
LIMITATION OF LIABILITY
17.1 Liability for Utility Failure, Etc.: Except to the extent covered by insurance obtained
by the board pursuant to Article 13, neither the Bear Claw Water System, LLC nor
the board shall be liable for: any failure of any utility or other service to be obtained
and paid for by the board; or for injury or damage to person or property caused by
the elements or resulting from electricity, noise, smoke, water, rain (or other liquid),
dust or sand which may leak or flow from the Water System, or from any of its
pipes, drains, conduits, appliances or equipment, or from any other places; or for
inconvenience or discomfort resulting from any action taken to comply with any law,
ordinance or orders of a governmental authority. No diminution or abatement of
assessments shall be claimed or allowed for any such utility or service failure, or for
such injury or damage, or for such inconvenience or discomfort.
17.2 No Personal Liability: So long as a board member, Bear Claw Water System, LLC
committee member, or Bear Claw Water System, LLC officer has in good faith,
without willful or intentional misconduct, upon the basis of such information as may
be possessed by such person, no such person shall be personally liable to any
owner, or other party,including the Bear Claw Water System, LLC,for any damage,
loss or prejudice suffered or claimed on account of any act, omission, error or
negligence(except gross negligence), any discretionary decision or failure to make
a discretionary decision, by such person in such person's official capacity; provided,
that this Section shall not apply where the consequences of such act, omission,
error or negligence are covered by insurance obtained by the board pursuant to
Article 13.
17.3 Indemnification of Board Members: Each board member or Bear Claw Water
System, LLC committee member or Bear Claw Water System, LLC officer shall be
indemnified by the Bear Claw Water System, LLC against all expenses and
liabilities,including attorney's fees,reasonably incurred by or imposed in connection
with any proceeding to which he may be a party, or in which he may become
Bear Claw Water System Operation Agreement Page 36

involved, by reason of being or having held such position at the time such expenses
or liabilities are incurred, except in such cases wherein such person is adjudged
guilty of intentional misconduct, or gross negligence or a knowing violation of the
law in the performance of his duties and except in such cases where such person
has participated in a transaction from which said person will personally receive a
benefit in money, property or services to which said person is not legally entitled.
Provided, that, in the event of a settlement, the indemnification shall apply only
when the board approves such settlement and reimbursement as being in the best
interest of the Bear Claw Water System, LLC.
ARTICLE 18
PARCEL OWNER RIGHTS
18.1 Change in Manager: In the event that professional management is employed by the
Bear Claw Water System, LLC, at least thirty days' notice of any contemplated
change in the professional manager shall be given to all Parcel Owner's. The Bear
Claw Water System, LLC shall not elect to terminate professional management and
assume self-management without the prior written approval of sixty-seven percent
(67%) of the Parcel owners; provided that such prior consent shall not be required
to change from one professional manager to another professional manager.
18.2 Abandonment of Water System: Except when acting in situations involving
damage,destruction or condemnation,the Bear Claw Water System, LLC shall not:
without prior written approval of sixty-seven percent (67%) of all Parcel owners,
seek by act or mission to: abandon or terminate the Water System for.the Bear
Claw Subdivision; or abandon, encumber, sell or transfer any of the common
elements.
18.3 Sale of the Water System: The Bear Claw Water System, LLC shall not, abandon,
partition,subdivide, encumber or sell any common elements or accept any proposal
so to do, without the prior written approval of sixty-seven percent (67%) of the
Parcel owners.
I
i 18.4 Change in Percentages: The Bear Claw Water System, LLC shall not make any
material amendment (as defined in Section 21.7) to this Operation Agreement or
Bylaws without the prior written approval of sixty-seven percent (67%) of all Parcel
I
owners.
i
18.5 Copies of Notices: A Parcel owner shall be entitled to receive timely written notice:
(a) that the Parcel owner has for more than sixty (60) days, failed to meet any
obligation under this Operation Agreement; (b) of all meetings of the Bear Claw
Water System, LLC and be permitted to designate a representative to attend all
such meetings; (c) of any condemnation loss or casualty loss affecting a material
portion of the Water System; (d)of any lapse, cancellation or material modification
Bear Claw Water System Operation Agreement Page 36

of insurance policies or fidelity bonds maintained by the Bear Claw Water System,
LLC; and (e) of any proposed action that requires the consent of a specified
percentage of Parcel owners.
18.6 Effect of Operation Agreement Amendments: No amendment of this Operation
Agreement shall be effective to modify change, limit or alter the rights expressly
conferred upon the Parcel owners. Any provision of this Operation Agreement
conferring rights upon Parcel owners which is inconsistent with any other provision
of this Operation Agreement or the Bylaws shall control oversuch other inconsistent
provisions.
18.8 Inspection of Books: Parcel owners shall be entitled to: inspect at all reasonable
hours of weekdays (or under other reasonable circumstances) all of the books and
records of the Bear Claw Water System, LLC including current copies of this
Operation Agreement, Bylaws and other rules governing the Water System, and
other books, records and financial statements of the Bear Claw Water System, LLC
(within a reasonable time following request); and, upon written request of any
holder, insurer or guarantor of a first mortgage at no cost to the party so requesting,
to receive an annual audited financial statement of the Bear Claw Water System,
LLC within ninety days following the end of any fiscal year of the Bear Claw Water
System, LLC.
ARTICLE 19
EASEMENTS
19.1 General: The specific mention or reservation of any easement in this Operation
Agreement does not limit or negate the easements for common elements reserved
by law and as set out on the plat map for the Bear Claw Subdivision or in the Bear
Claw Subdivision Covenants.
19.2 Utility, Etc., Easements: The board, on behalf of the Bear Claw Water System, LLC
and all members thereof, shall have authority to grant utility, road and similar
easements, licenses and permits under, through or over the common elements,
which easements the board determines are reasonably necessary to the ongoing
development and operation of the Water System.
19.3 Bear Claw Water System, LLC Functions: There is hereby reserved to the Bear
Claw Water System, LLC or their duly authorized agents and representatives, such
easements as are necessary, for emergency repairs and/or to perform the duties
and obligations of the Bear Claw Water System, LLC as are set forth in this
Operation Agreement or in the Bylaws and the Bear Claw Water System, LLC rules.
Bear Claw Water System Operation Agreement Page 37

ARTICLE 20
AMENDMENT OF OPERATION AGREEMENT, SURVEY MAP AND PLANS
20.1 In General: The Bear Claw Water System, LLC (in connection with Sections 4.3 or
7.2.3, Articles 15 or 20, or termination of the Water System),or certain Parcel
owners (in connection with Sections 4.3 or 7.2.3 or Article 20, or termination of the
Water System), and except as limited by Section 21.4, this Operation Agreement,
including the survey maps, boundary line adjustments and plans may be amended
only by vote or agreement of sixty-seven (67%) of the Parcel owners.
20.2 Challenge to Validity: No action to challenge the validity of an amendment adopted
by the Bear Claw Water System, LLC pursuant to this Article may be brought more
than one year after the amendment is recorded.
20.3 Recording: Every amendment to the Operation Agreement must be recorded in the
county in which the Water System is located, and is effective only upon recording.
An amendment shall be indexed in the name of the Water System and shall contain
a cross reference by recording number to this Operation Agreement and each
previously recorded amendment thereto. A memorandum setting forth the general
terms of this Operation Agreement and referencing a copy of this agreement shall
constitute a recording under this section of this full agreement for each property.
20.4 Execution: Amendments to the Operation Agreement to be recorded by the Bear
Claw Water System, LLC shall be prepared, executed, recorded and certified on
behalf of the Bear Claw Water System, LLC by any officer of the Bear Claw Water
System, LLC designated for that purpose or, in the absence of designation, by the
president of the Bear Claw Water System, LLC.
20.5 Material Amendments: Any amendment to a provision of this Operation Agreement
establishing, providing for, governing or regulating the following (all of which shall
be deemed"material amendments")shall require the consent of sixty-seven percent
(67%) of the Parcel owners: voting rights; assessments, assessment liens, or the
priority of assessment liens; reserves for maintenance, repair and replacement of
common elements; responsibility for maintenance and repairs, reallocation of
interests in the common elements, or rights to their use; the addition, annexation,
or withdrawal of property to or from the Water System; insurance or fidelity bond;
a decision by Bear Claw Water System, LLC to establish self-management when
professional management had been required previously by the Water System's
documents; restoration or repair of the Water System (after a hazard damage or
partial condemnation) in a manner other than that specified in the Operation
Agreement; any action to terminate the Water System after substantial destruction
or condemnation occurs. A Parcel owner who fails to respond within thirty days of
a written request to approve an amendment shall be deemed to have approved the
Bear Claw Water System Operation Agreement Page 38

request if such request was delivered by certified or registered mail with a return
receipt requested.
20.6 Map and Plans Amendment: Except as otherwise provided herein, the survey map,
boundary line adjustment and plans may be amended by revised versions or
revised portions thereof referred to and described as to effect in an amendment to
this Operation Agreement adopted as provided for herein. Copies of such proposed
amendment to the survey map and plans shall be made available for the
examination of every owner. Such amendment to the survey map and plans shall
also be effective,once properly adopted, upon recordation in the appropriate county
office in conjunction with the Operation Agreement amendment.
ARTICLE 21
DECLARANT RIGHTS
21.1 Special Declarant Rights: As more particularly provided in this Article, declarant for
itself and any successor declarant has reserved the following declarant rights:
21.1.1 Sale or Dedication of the Water System: The Declarant, its agents,
heirs and successors have the right to sell or dedicate the Water
System to the Parcel owners of the Bear Claw Subdivision or to any
other person or entity desiring to operate the Water System,including
but not limited to setting and collecting water fees, assessments and
connection fees.
22.1.2 Operation of the Water System: Declarant, its agents, heirs,
sucessors, employees and contractors shall have the sole right to
operate and manage the Water System and act as Bear Claw Water
System, LLC pursuant to this Operation Agreement, until Declarant
sells or dedicates the Water System.
21.1.3 Exercise of Development Rights: Declarant shall have the right to
exercise development rights, if any, under this Operation Agreement
and the Act.
21.1.4 Declarant Control: Declarant, or persons designated by declarant
shall have complete control of the Water System until the system is
sold or dedicated or the Water System is terminated.
21.1.5 Declarant reserves the right to set the initial fees and
assessments, including but not limited to monthly water fees,
assessments for repair maintenance and expansion and for
connection fees.
Bear Claw Water system Operation Agreement Page 39

21.1.6 Declarant's Easements: Declarant has an easement through the
common elements as may be reasonably necessary for the purpose
or operating, maintaining, repairing or expanding the Water System.
ARTICLE 22
MISCELLANEOUS
22.1 Notices for All Purposes:
22.1.1 Delivery of Notice: Any notice permitted or required to be delivered
under the provisions of this Operation Agreement or the Bylaws may
be delivered either personally or by mail. If delivery is made by mail,
any such notice shall be deemed to have been delivered twenty-four
hours after a copy has been deposited in the United States mail,
postage prepaid,for first class mail, addressed to the person entitled
to such notice at the most recent address given by such person to the
board, in writing, for the purpose of service of such notice, or to the
most recent address known to the board. Notice to the Parcel owner
shall be sufficient if mailed to the Parcel of such person or persons if
no other mailing address has been given to the board by any of the
persons so entitled. Mailing addresses may be changed from time to
time by notice in writing to the board.
22.2 Severability: The provisions hereof shall be deemed independent and severable
and the validity or partial invalidity or enforceability of any one provision or portion
thereof shall not affect the validity or enforceability of any other provision hereof if
the remainder complies with the Act or as covenants affect the common plan.
22.3 Transfer of Declarant's Powers: It is understood that declarant at any time in the
exercise of its sole discretion may sell, assignment,transfer,encumber or otherwise
convey to any person, upon such terms and conditions as declarant may determine,
all of declarant's rights, powers, privileges and authority arising hereunder by virtue
of declarant's capacity as declarant (which rights, powers, privileges and authority
are in addition to those arising from declarant's ownership of one or more Parcels
and include development rights and special declarant rights).
22.4 Effective Date: This Operation Agreement shall take effect upon recording.
22.5 Reference to Survey Map and Plans: The survey map and plans of the Water
System as prepared by Tucker Engineering Consultants, and were filed with the
Recorder of Bonner County, Idaho, as set out the in the replat with the Bonner
County Recorder.
Bear Claw Water System Operation Agreement Page 40
I

22.6 Headings: Headings in this agreement are for convenience and reference only, and
the words contained therein shall in no way be held to explain, modify, amplify, or
aid in the interpretation, construction, or meaning of the provisions of this
agreement.
22.7 Time: Time is of the essence of this agreement.
22.8 Exhibits: Exhibits attached hereto, are deemed by attachment to constitute part of
this agreement and are incorporated herein as if set out in full.
22.9 Enforcement: If any part of this agreement is found to be invalid it shall not affect
the remainder of the agreement. In the event any party with the right to enforce this
agreement shall seek to enforce this agreement, or any duties or obligations arising
out of this agreement by legal proceedings, then the prevailing party shall be
entitled to an award of reasonable attorney fees and costs for enforcement of this
agreement. This agreement shall be construed in accordance with, governed by,
the laws of the State of Idaho. Venue and Jurisdiction for any suit filed to enforce
this agreement shall be in First District Court in and for the State of Idaho.
THE REMAINDER OF THE PAGE INTENTIONALLY LEFT BLANK
Bear Claw Water System Operation Agreement Page 41

DATED this ' day of =x ter ' 2010
DECLARANT:
By: .-
STATE OF IDAHO )
ss
COUNTY OF )
I certify that I know or have satisfactory evidence that on this day of e 4. y ,
2010 personally appeared
to me known to be the Trustee of the, James E. White, Jr. Credit Shelter Trust, the James
E. White, Jr. Exempt Marital Trust and the James E.White, Jr. Non-Exempt Marital Trust,
and acknowledged the same instrument to be the free and voluntary act and deed of such
Trusts for the uses and purposes therein mentioned, and on oath stated that they were
authorized to execute such instrument.
Sworn before me this day off f_t ,- , 2010.
Otary Public in and for the
State of Idaho
Residing at
My Appointment Expires: �5 I
=PUBLIC
Bear Claw Water System Operation Agreement Page 42