Case 2:03-cv-01222-RCB Document 191-6 Filed 07/01/2008 ...1 deci•aration of farid meshkatai in...

Exhibit "24" 329 Case 2:03-cv-01222-RCB Document 191-6 Filed 07/01/2008 Page 1 of 82

Case 2:00-cv-06902-GAF-RZ Document 717 Filed 06/11/2008

UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA

Page 1 of 2 LINK: 711

CIVIL MINUTES GENERAL ..•!•: .• i•i• •it•

::'I'•: •

CV 00-6902 GAF (RZx) :•,.••i•!i• Fidelity Nat'l Fin., Inc., et al. v. Friedman, et al.

June 11, 2008

Deputy Clerk

GARY ALLEN FEESS

None Court Reporter / Recorder

N/A

Tape No. Attorneys Present for Plaintiffs:

None

Attorneys Present for Defendants:

None

Proceedings: (In Chambers)

ORDER RE: EX PARTE APPLICATION

Fidelity filed a motion for monetary contempt sanctions against Defendant Farid Meshkatai and his counsel, Allen Hyman. (Docket No. 615.) On April 4, 2008, the Court took the matter under submission and granted Hyman's motion to be relieved as counsel for Meshkatai. (See Docket No. 663 (erroneously dated April 7, 2008).) On May 22, 2008, the Court issued an order ("Sanction Order") holding Meshkatai and Hyman jointly and severally liable for fees and costs as a sanction for Meshkatai's contempt. (Docket No. 698.) Hyman has now filed an ex parte application seeking, among other things, to delay the enforcement of the Sanction Order. (Docket No. 711.) Fidelity opposes the application. (Docket No. 713.)

At the end of April, Hyman became seriously ill due to a kidney stone and related kidney irregularity. (Hyman Decl. ¶ 9 (Docket No. 712).) As a result, Hyman was largely incapacitated from April 29, 2008 until he returned to work full-time on June 2, 2008 Hyman began to return to the office, on a limited basis, around May 22, 2008. (Hyman Decl. ¶¶ 9-23; se_ge id___=., E: 6 [May 12, 2008 letter from D. Danoff, M.D.].) Because of his illness, and because he was no longer receiving notice of filings, Hyman was not aware of, and was not able to respond to, various subsequent pleadings regarding a motion to have Meshkatai incarcerated for contempt. • wherein Meshkatai feebly attempted to shiR the blame for his actions to Hyman. (See e.g.,

• Hyman Decl. Exs. 7 and 8 [Meshkatai Declarations].) •

Hyman asks the Court to: (1.) order all counsel to serve Hyman with all materiaq-•l•d between April 7, 2008 through May 22, 2008, the date the Sanction Order issued; (2.) give Hyman until June 23, 2008 to file a motion for reconsideration to be heard on July 14, 2008; (3.• stay, pending the motion for reconsideration, enforcement of the Sanction Order; and (4.) extend the time to file a notice of appeal of the Sanction Order to July 21, 2008. (App. at 5 (Docket No. 711).) Alternatively, should the Court deny these requests, Hyman asks for a 10 day stay of CV-90 (06/04) CIVIL MINI•. 0- GENERAL Page of 2 Case 2:03-cv-01222-RCB Document 191-6 Filed 07/01/2008 Page 2 of 82

Case 2:00-cv-06902-GAF-RZ Document 717 Filed 06/11/2008

UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA

Page 2 of 2 LINK: 711

CIVIL MINUTES GENERAL

CV 00-6902 GAF (RZx) Fidelity Nat'l Fin., Inc., et al. v. Friedman, et al.

•June 11, 2008

execution of the Sanction Order so that Hyman can post security for a stay of the order pending an appeal. (App. at 6.)

Hyman's ex parte application is based, in large part, on a faulty premise: that the Court found Hyman liable for fees and costs in the Sanction Order as a result of material filed aider the Court took the matter under submission. This Is not correct. The Court found Hyman liable based on submissions prior to April 4, 2008. Indeed, every evidentiary citation in the Sanction Order under the heading "Hyman's Culpability" is to material submitted prior to April 4, 2008. (Sanction Order at 4-6.) There simply was no "due process disadvantage." (App. at 2.) Accordingly, there is no need for the Court to order counsel to serve Hyman with papers filed between April 7, 2008 and May 22, 2008 and no need for Hyman to address the accusations within those documents,

Likewise, the Court sees no need for a motion for reconsideration and will not set a briefing schedule for one or stay enforcement of the Sanction Order to allow for such briefmg. Regardless, Hyman believes "he can demonstrate factual errors in the Court Order." (App. at 2.) Although the Court will not encourage Hyman, to the extent he still believes there are factual errors, he is free to file a motion for reconsideration as permitted by the Federal and Local procedural rules.'-

However, the Court will GRANT Hyman's request to stay the Sanction Order, not so Hyman can pursue his motion for reconsideration, but, because of Hyman's illness, to allow him time to take the necessary measures to post security pending his putative appeal. Accordingly, the Court STAYS execution of the Sanction Order up to and through June 23, 2008; the remainder of Hyman's requests are DENIED. 3

IT IS SO ORDERED.

•Furthermore, these items are available on the Court's electronic filing system. To the extent any of Fidelity's submissions are not available, Fidelity's counsel has agreed to provide them. (Case Decl., Ex. 1 [May 28, 2008 letter from T. Case to A. Hyman].)

2As the Court is not granting the request to affirmatively schedule a motion for reconsideration, there is no need to extend the time for Hyman to file his notice of appeal pending a ruling on the motion for reconsideration.

3Hyman also accuses Fidelity, by obtaining an abstract ofjudgrnent, of violating Rule 62(a)'s 10 day automatic stay on execution ofjudgrnents. (App. at 6-7; Fed. R. Civ. P. 62(a).) Aside from alerting the Court to this purported violation, Hyman does not identify what relief, if any he seeks. Accordingly, the Court takes no

action on the "Rule 62(a) Issues." (App. at 6.) CV-90 (06/04) CIVIL MI•Tp GENERAL Page 2 of 2

Case 2:03-cv-01222-RCB Document 191-6 Filed 07/01/2008 Page 3 of 82


( •se 2:00-cv-06902-GAF-RZ Document 634 Filed 02/25/2008 Page 1 of 48

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

i8

19

20

21

22

23

24

25

26

27

28

David M. Bass (State BatNo. 117199) Michael J. Gulden (State Bat' No. 243383) DAVID M.. BASS & ASSOCIATES 1900 Avenue of the Stats, Suite 200 Los Angeles, California 90067 Telephone: (310) 789-1152 Facstmile: (310) 789-1149 Email: [email protected]

Attorneys for Defendant FARID MESHKATAI

UNITED STATES DISTRICT COURT

FOR THE CENTRAL DISTRICT OF CALIFORNIA- WESTERN DMSION

FIDELIIY NATIONAL FINANCIAL, INC., a Delaware cotpor'ation, and FIDELITY EXPRESS NETWORK, INC.., a California cozporation,

Plaintiffs,

VS.,

COLIN H.. FRIEDMAN, individually and as trustee of the Friedman Family Trust UDT, dated July 23, 1987; HEDY KRAM:ER FRIEDMAN, individually and as tiustee of the Friedman Famil!¢ Trust UDT, dated .luly 23, 1987; FARID MESHKATAI, an individual; and ANITA K_RAMER MESHKATAI, individually and as trustee of the Anita Kramer Living Trust, dated .luly 23, 1987,

Defendants.

///

///

//I

///

III

Iil

Case No.. CV 00-06902-GAF (RZx)

[Assigned to Hon.. Gaty A.. Feess] DEFENDANT FARID MESHKATAI'S OPPOSITION TO MOTIONS IN SUPPORT OF REQUESTS FOR CIVIL CONTEMPT SANCTIONS, CLUDING INCARCERATION; AND CIVIL CONTEMPT ATTORNEYS' ES SANCTIONS AGAJNST FARID

MESHKATAI AND ALLEN HYMAN;

DECLARATIONS OF MICHAEL J. GULDEN; FARID MESHKATAI AND .SANFORD I. MILLAR

Date: March 10, 2008 Time: 9:30 a,m Ct•m: 740

///

FARID MESHKATAI'S OPPOSITION TO MOTIONS FOR REQUESTS FOR CIVIL CONTEMPT SANCIIONS AND CIVIl_ CONIEMP'[ AIIORNEYS' FEES

333 Case 2:03-cv-01222-RCB Document 191-6 Filed 07/01/2008 Page 5 of 82

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

C •se 2:00-cv-06902-GAF-RZ Document 634 Filed 02/25/2008 Page 20 of 48

DECLARATION OF FARtD MESHKATAI

I, Fazid Meshkatai, declare as follows:

1. I am Defendant in this action, and make this declazation based upon

personal knowledge and, ifcalled upon as a witness, could and would competently

testify thereto..

Cour¢ Order oJDecember 19, 2007

2. On Decembex 19, 2007, I learned about the Corot's Order of that date,

concerning documents tegazding Express Network Attor.ney Service, A&N Auto

Connection, Inc.., A.K.. Motors, Inc.., Bank Auto Repo, Intercontinental Recovery

Service, Inc.., Executive Legal Network, Exacta Legal and Eliani, LLC (collectively, the

"Companies"). I had previously seatched my home and business office on several

occasions starting in luly 2.007 for. all documents in my possession regatding the

Companies (as detailed herein), which I delivered to Allen Hyman, Esq..

3.. Ilu'ough the searches of'my home and business office commencing in luly

2007, I determined thatI had no documents in my possession regat ding Express

Network Attorney Service, A&N Auto Connection, Inc.., A..K.. Motors, Inc., Bank Auto

Repo, Intercontinental Recovery Service, Inc. and Exacta Legal. Accordingly, I also

contacted third patties, including financial institutions, accountants for the Companies,

my current and former' attorneys and current and former business partners, whom I

believed may have maintained documents regarding the Companies, to obtain

documents regazding the Companies.. (My prior efforts to obtain documents concerning

the Companies ate detailed in (i) Fatid Meshkatai's Declaration in Response to Order to

Show Cause, dated April 23, 2007, (ii) Fazid Meshkatai's Second Declat'ation in

Compliance with the Corot'sOrder of July 17, 2007, dated August 12, 2007, and

(iii) Fadd Meshkatai's I'hitd Declaration in Compliance with the Cotnt's Order of

luly 17, 2007, dated August 29, 2007, true and correct copies of which are attached 1

DECI•ARATION OF FARID MESHKATAI IN SUPPORT OF FARID MESHKATAI'S OPPOSITION TO MOTIONS FOR

REQUESTS FOR CIVIl_ CONIEMPI SANCIIONS AND CIVIl CONIEMPI AI'IORNEYS' I:EES 334 Case 2:03-cv-01222-RCB Document 191-6 Filed 07/01/2008 Page 6 of 82

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

2O

21

22

23

24

25

26

27

28

C se 2:00-cv-06902-GAF-RZ Document 634 Filed 02/25/2008 Page 36 of 48

documents in his possession.. I understand that all •ecords maintained by M_•. Cohen

were subpoenaed by and delivered to Plaintiffs in May 2007..

Question II1

16. The Court's seventh question of'December 19, 2007 ordered that I explain

how there is no documentation of my involvement with Eliani, LLC, Fideli .ty Exp•ess

Network, and Worldwide Network. My responses are as follows"

(i) Eliani, LLC. I am the manager ofEliani, LLC, a management

company that oversees the renovation ofhomes in the State ofAtizona.. Steven Spector

owns and manages the trust which owns Eliani, and Yativ Elizar handles its day-to-day

operations, and maintains its records.. (See Exhibit H at 821:22-824:4.) I act as a

liaison between Steven Spector and the home builders by overseeing the progress of

home renovations. I spend approximately one hour per month on Eliani projects.,

my knowledge, Eliani has been involved with the purchase ofonly two homes, and that

all documents concerning those home prochases were delivered to Plaintiffs by

Mr.. Elizar in l•ebruary 2007.. Eliani does not have an ownership interest in any of'those

homes.. Eliani does not enter into agocements with subcontxact0rs. It does not have any

loans.. I do not receive any compensation, expenses or insurance benefits fiom Eliani.

Eliani has never filed a tax return.. (See Exhibit H 907:1-908:11..) "Ihe only documents

regarding Eliani that I have ever' had in my possession are the Te•m Sheet between

Eliani and Yativ Elizat; and the checks that I delive•ed to Allen Hyman.. I understand

that the Term Sheet is the only agz'eement or contract that Eliani has ever' entered into. I

understand that Mr., Elizar delivered all documents in his possession concerning Eliani

to Plaintiffs in February 2007, including its bank statements.. (See Declaration ofAllen

Hyman as to Documents Produced Pertaining to Eliani, LLC, filed separately..)

(ii) l•idetity Express Network. Plaintiffs acknowledge that they have

received all documents in my possession concerning Express Network, and that I have

fully answe•ed all questions pertaining to Fidelity Express Network Indeed; Plaintiffs

/// 17

DECLARATION OF FARID MESHKATAI IN SUPPORT OF FARID MESHKATAI'S OPPOSITION TO MOTIONS FOR

REQUESI'S POR CIVIl. CONIEMPI SANCIIONS AND CIVIL. CONIEMP'I" AI'IORNEYS' FEES


Case 2:00-cv-06902-GAF-RZ Document 634 Filed 02/25/2008 Page 37 of 48

6

7

10

11

12

19

22

24

27

2•

stat•l that tl•.ey were "willing to waive Express Network," and that '• em safely ignore Express NeVaork" dtwiag my •tx•ition on J•uary 4, 2008. All documents .in

my po•¢ssion, c•tody or control ¢on•raing Fidelity Expiess Network have been

dclivexed to ?lalnfiffs. (See Exhibit__ at 911:9-14.) (ii) .Wo_ddwide Netwg•.: Dta'iag my

Plaintiffs did not seek any information r•gardiag Worldwide Netwou-k. Howewr, throughout fine period of 2002 through early 2007• I ooca•ional/y assisted Wortdwido

with its marketing. The only •mpe.matioa Ire, eived from Worldwide was a cheek ia

th• mount c,f$10,000 in the year 2007.. I delivgrcd a cogy of that cheek

Hynmn. I ro:¢iwd no other compensation from Worldwide oth•r than that paymem.

Additional Search for Documents on February 12, 2008 17. In early l•ebmary 2008, • learned fiom Allen Hyman that Plain 'ttt•

•itiated •' proceedings r•garding my compliance with the Court's Ordex of

December 19, 2007.

18. I reviewed Plaintiffs" Motion in Support of Request for Civil Contempt Sanction, I•oluding Incarceration, Against Farid Meshkatai (the 'qVlofion for

Contempt"), APa= reviewing the documents idvnlified by Plaintiffs in their Motion for

Contempt, I again searched my home and business office, and canfwzaed that the

documents I provided to Allen Hyman were all of the documents I had in my possessiom do not haw •y documents in my possession regarding the Companies, othe•" than th•se I previously delivered to 1VI•. Hyman.

I decl•e under penalty of.txnjury thai the foregoing is t•e and •orrect

Executed oa this • day of February 2008, at Phoenix, Arizona.

D•CLARATION OF FAR•D MI•SHKAT.AI IN $IJPH3&T OF FAP, B• M•SHKA2AP$ OPPO•TION TO MOTIONS FOP. REQUEgT$ FOIt CIVIL CONTF.M• •C'q'IONg AND C1VIL

• •IA•(I 6'•1168L81• 88:LI; 880ZlgZ/Z@

I•I•>•53• 33 6 9089E8•08• E• :q0 888Elqi•t•0 Case 2:03-cv-01222-RCB Document 191-6 Filed 07/01/2008 Page 8 of 82

Exhibit "26" 33? Case 2:03-cv-01222-RCB Document 191-6 Filed 07/01/2008 Page 9 of 82

FARID MESHKATAI'S

DEBTOR EXAMINATION

VOLUME I

APRIL 2, 2007

338

EXHIBIT


Fidelity v. Friedman Farid Meshkatai, Volume I 4/2/2007

Page 97

Q For both? 2 A Ycah. One waspurchased for 500-. Then there 3 was a loan obtained on that 600,000 to purchase the

4 second house. 5 Q And title to the homes is in Yariv's name? 6 A Correct. 7 Q Are there any agreements between Yariv and 8 Elani concerning the ownership of the homes? 9 A I believe so.

10 Q Who signed the agreements on behalf of Elani? 11 A Idid. 12 Q Are the homes still owned by Yariv that were 13 initially purchased? 14 A Yes. 15 Q What was done to the houses? What is being 16 done to the houses? 17 A adding some square footage and remodeling of

$ the entire house there, whether it is the kitchen or the 19 bathroom. 20 Q When wasthe first house acquired? 21 A Don't remember exactly, but almost a year ago 22 prior, yeah. 23 Q When did remodeling start? 24 A Few months after that. 25 Q And has the remodeling been completed?

Page98

A No. 2 Q What company is doing the remodeling? 3 A Yariv is doing the remodeling. 4 Q Who has to pay for the remodeling expense? 5 A The trust was supposed to pay. 6 Q How much hasbeen paid by the trust?

7 A don't know e.xaot number. 8 MR. HYMAN: To what, remodel? 9 MR. CABANDAY: Yes.

10 THE WITNESS: Don't know exact number.

11 Q BY MR. CABANDAY: Let's get back. 12 Is there a joint venture or partnership 13 agreement between Elani and Yariv Homes concerning these

14 homes? 15 A I believe so, yes. 16 Q The documents speak for itself and I'll show

17 them to you later ifwe get to them.

18 But what is your understanding of how profits 19 would be splR from this venture? 20 A ARea" the project is over, once the property is

21 sold, after the investment being paid, whether it's to

22 Elani or ifYariv had to put money from himself, plus 23 the cost of carrying that dollar, whatever it is, the 5

24 percent, then the profit would be divide 50/50 between

25 Elani and Yariv Home.

1 2 3 4 5 6 7 8 9 I0 II 12 13 14 15 16 17 18 19 20 21 22 23 24 25

Page 99

Q Now, let's get back to the remodeling expenses. All of the labor is being performed by Yariv?

A Yes. Q The actual cost to purchase items for the

remodel, who is responsible for that? Let's concentrate on the first house first.

A Ycah. It's supposed to bc the trust, and where

we borrowed the money on the property, a portion of it went toward the remodeling of the honse.

Q Is the trust part of this joint venture agreement between or partnership agreement with Elani and Yariv?

A When I'm talking about the trust, it's Elani. My apology.

Q So has the trust contributed anything to this joint venture partnership with Yariv?

A It has yes. Q Let's be clear.

Is the money being contributed through Elani or

directly from the trust? A It was both. Some was directly to Yariv's home

for the expenses, the maintenance, and some went through Elani once the account was opened and went through Elani.

Q Who selected the houses to purchase?

Page 100

A Yariv had the knowhow and 2 MR. HYMAN: No. Who sclcctcd them? That's what he

3 wants to know. 4 THE WITNESS: Yariv. 5 Q BY MR. CABANDAY: who from Eiani approved the

6 purchase of the house? 7 A Myself with Speotor. 8 Q Do you have any documents concerning any 9 communications with Mr. Spector regarding the purchase

10 of the houses? 1I A I'm not sure. don't think so.

12 Q What information did you get to Mr. Spector 13 about the house before they were purchased? 14 A The size of it, the price of it, the prospect 15 of what it could be done to this house after spending X

16 amount of dollar, and what did it cost now and what it

17 will have the profit at the end. 18 Q How much total has Elani invested in the first 19 house? 20 A The first house? As said, around 600- and 21 some change. I'm not sure about the exact amount.

22 Q How much has been invested in the second house

23 total? 24 A From the first house? 25 MR. HYMAN: No. How much total on the second

Abrams, Mah & Kahn Reporting Service 800/622-0226 339

25 (Pages 97 to 100)


Exhibit "2 7" 340 Case 2:03-cv-01222-RCB Document 191-6 Filed 07/01/2008 Page 12 of 82

Fidelit3, v. Friedman Farid Mesb_katai, Volume IV 8/7/2007

t0

11

12

13

14

15

16

17 18

19 20 21 22 23 24 25

Page 452


FOR THE CENTRAL DISTRICT OF CALIFORNIA

FIDELITY NATIONAL FINANCIAL, INC., a Delaware Corporation, and FIDELITY EXPRESS NETWORK, INC., a California Corporation,

Plaintiffs,

VS.

COLIN H. FRIEDMAN, individually and as trustee of the Friedman Family Trust

No. CV00-06902-GAF(RZx)

UDT, dated July 23, 1987; HEDY

KRAMER FRIEDMAN, individually and as trustee of the Friedman Family Trust UDT, dated July 23, 1987; FARID MESHKATAI,) an individual; and ANITA KRAMER MESHKATAI, individually and as trustee of the Anita Kramer Living Trust, dated July 23, 1987,

(Pages 452 718)

(Confidential Defendants. Page 677)

VOLUME IV

Judgment Debtor Examination of FARID MESHKATAI, taken on behalf of Plaintiffs, at 225 East Temple, Courtroom 550, Los Angeles, California, commencing at 10:07 a.m., on

Tuesday, August 7, 2007, before Kathleen Mary O'Neill, CSR 5023, RPR.

Abrams, Mah & KahnRepo•g Service 800/622-0226


Fidelity v. Friedman Farid Meshkatai, Volume IV 8/7/2007

1

2

3

4

5

6

7

8

9

i0

Ii

12

13

14

15

16

17

18

19

20

21

22

23

24

25

insurance; is that correct?

A.

Q.

Page 689

That's all.

Okay.

And then your testimony is that there's no

connection today between Executive Legal and Worldwide;

is that correct?

A. It has been stopped, yes. No connection.

Q. Okay.

It's my understanding that you're the manager

of Ellani?

A. Yes, I am.

Q. Can you describe to me briefly what you do as

the manager of Ellani?

A. At the beginning, you know, we looked for

properties and we pinpointed a few. We let the trustee

know about the potential purchase. And I'm just

basically the liaison between the builder and the

trustee.

Q. And the builder is Mr. Elazer?

A. Yes.

Q. Could you just describe to me briefly what it

means to be the liaison between the builder and the

trustee?

A. Well, when he needed, you know, the finances

for any portion that he was building, I'm the one who

Abrams, Mah & Katm Reporting Service 800/622-0226


Fidelity v. Friedman Farid Meslakatai, Volume IV 8/7/2007

1

2

3

4

5

6

7

8

9

I0

II

12

13

14

15

16

17

18

19

20

21

22

23

24

25

Page690

was contacting the inspector and explaining what the

state of the project is and what needs to be done.

Q. Could you please describe to me what projects

are currently under way in Ellani?

A. Uh-huh.

There are two houses, I should say, that they

are under construction, and they were in existence and

they are being remodeled. And there is another project,

which is just a piece of land that nothing has taken

place on that.

Q. And can you give me an estimate of the value of

the first house?

MR. HYMAN: Objection as to foundation. Value

of what?

MS. KROLL: The first house.

MR. HYMAN: Let's talk about the three parcels.

There's parcel i, and parcel 2, and parcel 3.

Want to do it that way?

MS. KROLL: Sure.

MR. HYMAN: Parcel i, what's on parcel I?

THE WITNESS: Parcel 1 is land.

MR. HYMAN: Just land only?

THE WITNESS: Correct.

Q. BY MS. KROLL: What's the address?

A. I don't recall it.

Abrams, Mah & Kahn Reporting Service 800/622-0226



1

2

3

4

5

6

7

8

9

i0

ii

12

13

14

15

16

17

18

19

20

21

22

23

24

25

Page 691

Q. Where is

A. But it's in Scottsdale. They're all in

Scottsdale.

MS. KROLL: Okay.

MR. HYMAN: What's on parcel 2?

THE WITNESS: Parcel 2, it's a house.

MR. HYMAN: How big?

THE WITNESS: 2500 square foot, somewhere

around there.

MR. HYMAN: What's on parcel 3?

THE WITNESS: The same, another house.

MR. HYMAN: How big?

THE WITNESS: The same.

MR. HYMAN: How big?

THE WITNESS: 2,000 to 2500 square foot.

MR. HYMAN: Okay.

Is anybody renting any of those houses?

THE WITNESS: No. They're under construction.

MR. HYMAN: What do you mean they're under

construction?

THE WITNESS: They're expanding the houses,

building additions to it.

MR. HYMAN: Okay. Both being renovated.

THE WITNESS: Renovated, yes.

MR. HYMAN: Okay. Is any of them finished?




5

6

7

8

9

I0

II

12

19

14

15

16

17

18

19

20

21

22

23

24

25

Page 692

THE WITNESS: One is yes. One is

finished

MR. HYMAN: Which one is finished?

THE WITNESS: I don't have the address of it.

MR. HYMAN: Okay.

THE WITNESS: Parcel 2.

MR. HYMAN: Okay.

Do you know how much each one's worth, any

idea?

Q

the land?

A.

Q.

A.

Q.

A.

Q.

A.

Q.

A.

THE WITNESS: No. I have no idea.

BY MS. KROLL: What was the purchase price of

The land was, if I'm not mistaken, 550-.

What was the purchase price of parcel 2?

The same thing, either 500- or 550.

And Parcel 3?

The same thing, 550- or 6-.

And these are financed?

All financed, yes.

So 80 percent financing?

Probably.

MR. HYMAN: Do you know?

THE WITNESS: I don't know. I'm not sure.

I take it back.

Q. BY MS. KROLL: Is parcel 1 financed?




5

6

7

8

9

I0

Ii

12

13

14

15

16

17

18

19

20

21

22

23

24

25

A

Q

Q

Q

parcel 2 ?

A.

Q

Q

Page 693

Yes.

Is parcel 2 financed?

Yes.

Is parcel 3 financed?

Yes.

Do you know the financing on parcel I?

I don't know the details of it.

Okay.

Do you know any details on the financing of

No.

Any details on the financing of parcel 3?

No.

Now, you're the manager of Ellani, and who do

you report to?

A. Spector.

Q. Okay.

And who owns Ellani?

A. If I'm not mistaken

MR. HYMAN: Objection. Calls for a legal

conclusion.

trusts.

Q

But go ahead.

THE WITNESS: I think it's one of the

BY MS. KROLL: And has Ellani had any profits?




i0

ii

12

13

14

15

16

17

18

19

2O

21

22

23

24

25


CENTRAL DISTRICT OF CALIFORNIA

WESTERN DIVISION

THE HON. JUDGE GARY ALLEN FEESS, JUDGE PRESIDING

FIDELITY NATIONAL FINANCIAL, INC., ET AL.,

Plaintiff,

vs.

FRIEDMAN, ET AL.,

Defendant.

V NO. CV-00- 6902-GAF

REPORTER'S TRANSCRIPT OF PROCEEDINGS

LOS Angeles, California

Monday, May 14, 2007

LISA M. GONZALEZ, CSR 5920 Official Reporter Roybal Federal Building 255 East Temple Street Room 181-C Los Angeles, CA 90012 (213) 626-7199

LISA M. GONZALEZ, U. S. DISTRICT COURT REPORTER

348

EXHIBIT


I0

ii

12

13

14

15

16

17

18

19

2O

21

22

23

24

25

APPEARANCES:

FOR THE PLAINTIFF:

FOR THE DEFENDANT:

HENNELLY & GROSSFELD LLP BY: JANICE M. KROLL

-aJud- ORLANDO F. CABANDAY

4640 Admiralty Way Suite 850 Marina Del Rey, California 90292-6695 (310) 305-2100

LAW OFFICE OF ALLEN HYMAN BY: ALLEN HYMAN 10737 Riverside Drive North Hollywood, California 91602 (818) 763-6289

LISA M. GONZALEZ, U.S. DISTRICT COURT REPORTER


i0

ii

12

13

14

15

16

17

18

19

2O

21

22

23

24

25

Los Angeles, California, Monday, May 14, 2007;

9:30 a.m.

-000-

THE CLERK: Calling Civil 00-6902, Fidelity

National versus Friedman.

Counsel, please state your appearance.

MS. KROLL: Janice Kroll, on behalf of Fidelity.

MR. CABANDAY: Orlando Cabanday• also on behalf of

Fidelity.

THE COURT: Good morning.

MR. HYMAN: Good morning, Your Honor. Allen Hyman

on behalf of Farid Meshkatai.

Mr. Meshkatai is present in court this morning and

he's sitting

THE COURT: Well, I'm glad because I have a few

things to say this morning, and I think it's very good that

he's going to be here.

I have read the materials. It's my tentative to

grant the motion and to find Mr. Meshkatai in contempt.

It is my conclusion on the basis of the evidence

that has been presented to me that, first of all,

Mr. Meshkatai has not at any time substantially complied

with the orders to produce documents.

Second, I think there is a serious question as to

whether he intends to comply in the future.


35O Case 2:03-cv-01222-RCB Document 191-6 Filed 07/01/2008 Page 22 of 82

i0

ii

12

13

14

15

16

17

18

19

2O

21

22

23

24

25

There have been repeated incidents over time where

he has indicated that he has complied, that he's done

everything he's supposed to do, only to be shown that what

he is saying is not true; that he has made efforts to

conceal especially contemporary records regarding assets,

accounts, and the like; and that Mr. Meshkatai is engaged in

conduct which is attempting to thwart efforts to reveal the

location of his assets.

I have very little tolerance for the kind of

behavior that I have seen so far in this case, and I believe

that, a) monetary sanctions should be awarded; b) we need a

drop-dead date for all disclosures, and I'm willing to talk

about that and try to get that worked out. But I just think

we are at a point where, in my view, enough is enough.

Mr. Meshkatai has an obligation. He must meet

that obligation, and he must meet it in the very near future

or there will be further consequences that will be imposed

by the Court, which will probably, if we get to that point

and I ultimately trust that we won't after today's hearing,

but if we do get to that point, Mr. Meshkatai may find

personally uncomfortable.

Do either of you want to be heard?

MR. HYMAN: I would like to be heard if it please

the Court.

THE COURT: Go ahead.



17

i0

ii

12

13

14

15

16

17

18

19

2O

21

22

23

24

25

THE COURT: Is it just so I'm clear, is it

Mr. Meshkatai's position, today, this morning, this hour,

that he has produced everything called for in the order?

MR. HYMAN: It is his position

THE COURT: That calls for a yes or no answer.

That's

MR. HYMAN: I want to make sure I define what is

called for in the order.

THE COURT: The order is the order.

MR. HYMAN: No. Excuse me, for interrupting,

Your Honor.

THE COURT: You know, I'm not here to negotiate

with anyone about what that order says. I think the order

is clear, and my question is is it your client's position

that he's in full compliance with that order, that

everything that's called for by that order that's within his

possession, custody, or control has been produced?

•[R. HYMAN: I have to say this: Everything that

he has personally, he's produced; and everything that any

other party may have that he has influence over, he has

written and requested their production with a copy of the

Court order; and any responses he's received, he's given the

documents to the other side.

THE COURT: All right.

Anything further regarding anything that was said



18

i0

ii

12

13

14

15

16

17

18

19

2O

21

22

23

24

25

by Fidelity?

MR. HYMAN: No, Your Honor. I think the responses

show full compliance with regard to their all documents

concerning the ownership of his corporation, he's produced.

All documents concerning Worldwide, he's produced.

They've talked about Yariz, and as I pointed out to the

Court, all documents concerning Yariz were produced in

February 2007.

MR. KROLL: Your Honor

THE COURT: Counsel.

MR. KROLL: The documents for Fir. Elazar, which

indeed included an agreement that's responsive to this Court

order, we obtained by subpoena to Mr. Elazar. They were not

produced by Mr. Meshkatai, either voluntarily or, most

recently, only by copy from a letter from Mr. Hyman.

So I do not agree, and I believe counsel is trying

to mislead the Court when he says that he's produced them.

THE COURT: What is Fidelity's position at this

point? What does now that we've gotten whatever we've

gotten through the 7th the last date that I've got for a

production of documents was May 7th. There may have been

something that's come since then.

What is Fidelity's position today as to what it

believes an appropriate order would be?

MR. KROLL: Your Honor, we would like an order



19

i0

ii

12

13

14

15

16

17

18

19

2O

21

22

23

24

25

with a drop-dead date for completely code compliant

responses so that we have on the record a representation

that all documents have been produced.

We appreciate the Court's order allowing us to

continue the debtor's exam because in Mr. Meshkatai's

Declaration he's caveated the production with, "As I

understand the requests." We would like to explore that

further.

And then once we have that and we compare it to

documents produced, should we find that we have from third

parties other documents that we believe should have been

produced but were not compliant, we would ask the Court to

take further action.

THE COURT: Yes, counsel, last word.

Yes, very briefly.

When they say third parties produced the

documents, Mr. Meshkatai did not. Mr. Meshkatai included

his documents in the third-party production. So a

misstatement there.

THE COURT: You mean he handed something over to

somebody else and said, you know, "When you're responding to

this subpoena, give this to Fidelity"?

MR. HYMAN: No, when they had a subpoena and to

the extent that they were required to produce and I was the

one who stamped them all, I insured that anything with



2O

i0

ii

12

13

14

15

16

17

18

19

2O

21

22

23

24

25

regard to that subpoena that also pertained to Mr. Meshkatai

was also produced because the subpoena was broad.

THE COURT: So you were representing these other

people in response to subpoenas issued by Fidelity?

MR. HYMAN: There was I was, in part, here.

There was an attorney in Arizona who did it, who represented

and got the documents, but I wanted to ensure that it was

complete; and therefore, I requested that'Mr. Meshkatai also

include in that subpoena any documents he had.

THE COURT: All right.

MR. HYMAN: Now, Your Honor, the thing is we have

here Mr. Meshkatai's passport, we have his ownership of

executive, W-2, 1099, paychecks; we have his tax returns,

which we got from the accountant and gave them, which were

duplicate to what we gave them before.

We got the bank accounts. I think we should be

put if they have some particular categories that they

feel we have not produced, we should not be in the dark.

They should say: These are the categories that we believe

you have not produced.

THE COURT: I don't think there's an intention to

keep you in the dark about those things. I certainly don't

get that impression from the motion, and I think that we

would all agree to that. I have no problem with that.

MR. HYMAN: So what is it if they feel we still



25

i0

Ii

12

13

14

15

16

17

18

19

2O

21

22

23

24

25

CER TIFI CA TE

I hereby certify that pursuant to Section 753,

Title 28, United States Code, the foregoing is a true and

correct transcript of the stenographically reported

proceedings held in the above-entitled matter and that the

transcript format is in conformance with the regulations of

the Judicial Conference of the United States.

Date: June 28, 2007

CSR NO. 5920




AZB B I0 (Official Form t0) (04/07)

UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF ARIZONA

blame of Debtor Case Number Farid Meshkatai and Anita Meshkatai 2:07-bk-05071-JMM

NOTE: This form should not be used to make a claim for an administrative expense arising after the commencement of the case. A

"request" for pa•,ment of an administrative expense ma•, ,bq, filed pursuant to 11 U.S.C. § 503.

Name of Creditor (The person or other entity to whom the debtor

owe• money or property): O'Connor & Campbell, P.C.

Name and address where notices should be sent: O'Connor & Campbell, P.C. 3638 N. Central Avenue, Suite 1800 Pl•oeni×, Adzona 850"12

Telephnne number: (60R) 24"I-7000 Last four digits ofaccoun! or other number by Which creditor identifies debtor: 2001

• Check box ifyou are aware that anyone else has filed a proof of claim relating to your claim. Attach copy ofseatement giving •rticulars.

• Check box ifyou have never received any notices from the bu•kruptcy court in this case.

Check box if the address dikers •om the address on the envelope sent to you by the court.

Check here [] replace's

ifthis claim [] amends a previously filed claim, dated:

1. Basis for Claim •3 Goods sold

Services performed

Money loaned

=P•OOFOFCLAIM

[] PersonaL im.•,/wr'ongrut

THIS SPACE IS FOR COURT USE ONLY

[] Wages, salaries, and compensation (fill out below)

Last four digits of your SS #: Unpaid compensation for services performed

Taxes

t3 Retiree benefits as defined in U.S.C. § 114(a) From to

[] Other (date) (dam) -2• Date debt•va's incurred: 0:2/01/2007-t•\2_"l•'2-,::x•-/ 3. Ifcourtjudgment, d•i•obtained:

4. Classification o'f Claim. Check the appropriate box or boxes that best describe your claim and state the •n•ount of the claim at the time the ease was f'd•d.'"

See rcvezsc side for important explanations.

Unsecured Nonpriority Claim $ 73,061.24

li(Check this box if: a) there is no collateral or lien securing your claim, or b) your claim exceeds the value of the property securing it, or c) none or only part of your claim is entitled to priority.

Unsecured Priority Cl'aim

• Check this box if you have an unsecured claim, all or part ofwhich is entitled to priority.

Amount entitled to priority $

Specify the priority of the claim:

Domestic support obligations under U.S.C. § 507(a)(I)(A)or (aXI XB).

[] Wages, salaries, or commissions (up to $10,950)* (up to $10,0130"*), earned within 180 days before rding of the bankruptcy petidon or cessation of the debtor's business, whichever is earlier 11 U.S.C. § 507(aX4).

[] Contributions to an empIo•,ee benefit plan 11 ,U;,S.C. 507(a)(5).

Secured Claim

o Check this box ifyour claim is secured by collateral (including a right ofsetoff).

Brief Description of Collaterah [] Real Estate Other

m Motor Vehicle

Value of Collateral:

Amount of arrearage and other charges at time filed included in secured claim, if

any: $

Up to $2,425* ($2,225**) of deposits toward purchase, lease, or rental of property or services for personal, family, or household use U.S.C. § 507(aX7).

• Taxes penalties owed to governmental unils U,S.C. § 507(aX•).

Other- Specify applicable paragraph of U.S.C. 507(a)(__). Amounts subject to adjustment on 4/1/I0 and every 3 years thereafter with respect to cases commenced on or after the date ofadjustment. For cases conm•enced [•rior to 4/!/07 ont•,.

5. Total Amount of Claim at Time Case Filed: $ 73,061.24 (unsecured) (secured) (priority) (Iotal)

Check this box if claim includes interest or other charges in addition to the principal amount of the claim. Attach itemized statement ofail interest or additional char•es. 6. Credits: The amount ofali payments on this Claim has been credited and deducted for the purpose of making this proof of claim. THIS SPACE IS FOR COURT

USE ONLY

358

7. Supporling Documents: Attach copies of supporting docmnents, such as promissory notes, purchase orders, invoices, itemized

statements of running accounts, contracts, courtjudgments, mortgages, security agreements, and evidence of perfection of lien. DO NOT

SEND OKIGINAL DOCUMENTS. if the documents are not available, explain. If the documents are voluminous, attach a summary.

8. Date-Slamped Copy: To receive an acknowledgment of the filing ofyour claim, enclose n stamped, self-addressed envelope and

copy of this proof of claim.

Date Sign and print the name and title, if pay, of the eredit0jqortother person authorized to file this claim (attach copy of power of attorney, irony):! // /'./ [

Penaltyforprezentingfraudulentclaim ineofupto$500,00Oorimprisonment for up to S ycars, orboth. LSU.S.C.§§ 152and3571.


Farid Meshketai & Anita Meshketai

Fidelity National Title v. Friedman

Account No: Statement No:

Page: 3 02128/2007 652-001 M

6859

JDC

02106/2007 LMH

LMH

LMH

LMH

LMH

JDC

02/07/2007 LMH

JDC

LMH

LMH

LMH

LMH

LMH

LMH

Revise objections to order of magistrate. Review file regarding same.

E-mail to attorney Allen Hyman regarding Rule 72 objections and possible motion for a protective order.

Prepare and revise exhibit list.

Prepare and file notice of errata regarding Rule 72 Objections filed yesterday.

E-mail to attorney Allen Hyman regarding notice of errata.

Begin preparation of Motion for Protective Order pursuant to Magistrate Judge Duncan's Order regarding Emergency Request for Clarification.

Work on objections to order. Telephone call to Allen regarding same. Telephone call to Client regarding same.

Teleconference with client and attorney Dan Campbell.

Receive and review Order signed by Robert C. Broomf[eld, Senior United States District Judge dated February 6, 2007 granting Plaintiffs' Motion to Compel, Plaintiffs' Motion for Sanctions and directing Yariv Elazar to pay monetary sanctions to Plaintiffs.

Receive and analyze Order signed by Robert C. Broomfield, Senior United States District Judge dated February 6, 2007 granting Plaintiffs' Motion to Compel, Plaintiffs' Motion for Sanctions and directing Yariv Elazar to pay monetary sanctions to Plaintiffs.

E-mail to attorney Allen Hyman (and client) regarding Judge Broomfield's Order.

Continue preparation of Motion for Protective Order.

Phone call from attorney Allen Hyman.

Teleconference with attorney Orlando Cabanday and attorney Dan Campbell.

Begin drafting affidavit/certification in support of motion for protective order.

Rate

275.00

230.00

230.00

230.00

230.00

230.00

275.00

230.00

275.00

230.00

230.00

230.00

230.00

230.00

230.00

Hours

1.20

0.20

0.60

0.70

0.10

1.20

1.40

0.20

0.40

0.80

0.20

4.60

0.40

0.40

0.30

330.00

46.00

138.00

161.00

23.00

276.00

385.00

46.00

110.00

184.00

46.00

1,058.00

92.00

92.00

69.00





Page: 5 02/28/2007 652-001 M

6859

LMH

LMH

LMH

LMH

LMH

LMH

JDC

JDC

02/09/2007 LMH

LMH

LMH

LMH

LMH

LMH

JDC

02/12/2007 LMH

LMH

phone voicemail.

E-mail to client regarding production of documents by Elazar.

Telephonic conference with attorney Dan Campbell and client.

Receive e-mail from client.

Response e-mail to client.

Receive e-mail from client regarding documents.

Prepare fax correspondence to client regarding documents subject to Motion to Compel.

Telephone call to and from Allen, Client and plaintiff attorney regarding status of debtor's exams and stipulation regarding same. Work on pleadings regarding same.

E-mail from plaintiff attorney regarding stipulation.

Phone call to attorney Allen Hyman; spoke with assistant and left detailed message.

Review letter and attached stipulations.

E-mail to opposing counsel Odando Cabanday regarding timeframe for producing documents from Yariv Eiazar.

Phone call to Allen Hyman, leaving detailed message with assistant.

Teleconfe•:ence with client Fadd Meshkatai and attorney Dan Campbell.

Phone call to opposing counsel Odando Cabanday, leaving detailed message regarding timeframe for production of documents by Yadv Elazar.

Receive and review stipulations. Telephone call to Allen and Client regarding same.

E-mail from opposing counsel Orlando Cabanday regarding time frame to produce documents from Mr. Elazar.

Receive and analyze e-mail from opposing counsel.

Rate 230.00

230.00

230.00

230.00

230.00

230.00

230.00

275.00

275.0O

230.00

230.00

230.00

230.00

230.00

230.00

275.00

230.00

230.00

Hours 0.10

0.20

0.20

0.10

0.10

0.10

0.30

1.40

0.10

0.10

0.60

0.20

0.10

0.20

0.10

0.70

0.20

0.20

23.00

46.00

46.00

23.00

23.00

23.00

69.00

385.00

27.50

23.00

138.00

46.00

23.00

46.00

23.00

192.50

46.00

46.00


Fadd Meshketai & Anita Meshketai


Account No: Statement NO:

Page: 6 02/28/2007 652-001M

6859

LMH

JDC

JDC

02/13/2007 LMH

LMH

LMH

JDC

02/14/2007 LMH

02/16/2007 LMH

JDC

02/17/2007 LMH

02/20/2007 LMH

LMH

JDC

JDC

02/21/2007 LMH

E-mail to opposing counsel in response to his e-mail regarding the draft stipulations.

E-mail from plaintiff attorney regarding Request for Production.

Review draft stipulation. Telephone call to Allen and Client regarding same.

E-mail to opposing counsel regarding review of proposed stipulation and order.

Research 37(b)(2) sanctions.

Phone call to client regarding correspondence from opposing counsel.

Revise stipulations. Review file regarding same.

Draft letter to Orlando Cabanday in response to his e-mail regarding production of documents from Yadv Elazar.

Review and analyze e-mail from opposing counsel regarding client's debtor exam.

E-mail from plaintiff attorney regarding stipulation and order.

E-mail to co-counsel Allen Hyman regarding Mr. Cabanday's e-mail dated 2/16/07.

Receive e-mail from Allen Hyman in response to Orlando Cabanday.

E-mail to Orlando Cabanday and Allen Hyman regarding stipulations.

Telephone call to and from Spector and Allen regarding status. Review file regarding same.

E-mails from and to plaintiff attorney, Allen regarding status. Telephone call to Allen regarding same.

Review and analyze Cabanday's letter regarding

Rate

230.00

275.00

275.00

230.00

230.00

230.00

275.00

230.00

230.00

275.00

230.00

230.00

230.00

275.00

275.00

Hours

0.20

0.10

0.60

0.30

0.90

0.20

0.40

0.30

0.20

0.10

0.10

0.20

0.20

0.60

0.80

46.00

27.50

165.00

69.00

207.00

46.00

110.00

69.00

46.00

27.50

23.00

46.00

46.00

165.00

220.00





Page: 7 02/2812007 652-001M

6859

JDC

LMH

JDC

02/22/2007 LMH

JDC

02/23/2007 JN

JDC

LMH

02/27/2007 JDC

LMH

LMH

timeframe for production of documents, discussion regarding court's order and deadline.

Receive and review correspondence from Cabanday regarding production of documents pursuant to subpoena.

Review and analyze correspondence from Hyman to Cabanday regarding production of documents (bates nos. 50000-50421.

Receive and review Hyman letter to Cabanday regarding production of documents.

Review and ana]yze Joint Stipulation and proposed Order.

Receive and review Joint Stipulation and proposed Order.

Research court docket regarding recent filings in Distdct Court.

Receive and review corrected Joint Stipulation and Proposed Order from attorneys for Plaintiffs and Judgment Creditors Fidelity National Financial and Fidelity Express Network.

Receive and analyze corrected Joint Stipulation and Proposed Order from attorneys for Plaintiffs and Judgment Creditors Fidelity National Financial and Fidelity Express Network.

Receive and review Notice of Entry of Order Regarding Debtors Exam and Order dated February 26, 2007 from the United States District Court for Central Distdct of California.

Receive and analyze Notice of Entry of Order Regarding Debtors Exam and Order dated February 26, 2007 from the United States District Court for Central District of California set for March 26, 2007 at 10:00 a.m..

E-mail to attorney Orlando Cabanday regarding status of stipulation/order to be filed in Adzona distdct court.

For Current Services Rendered

Rate

230.00

275.00

230.00

275.00

230.00

275.00

140.00

275.00

230.00

275.00

230.00

230.00

Hours

0.40

0.20

0.20

0.10

0.50

0.30

0.30

0.10

0.20

0.20

0.20

0.20

40.30

92.00

55.00

46.00

27.50

115.00

82.50

42.00

27.50

46.00

55.00

46.00

46.00

9,755.00


Fadd Meshketai & Anita Meshketai



Page: 2 03131/2007 652-001M

6901

LMH

LMH

LMH

LMH

LMH

LMH

LMH

LMH

LMH

LMH

LMH

LMH

LMH

JDC

03/04/2007 LMH

03/07/2007 JDC

LMH

03/09/2007 JDC

JDC

Phone call from Allen Hyman.

Phone call from opposing counsel Tom Case.

Re-draft joint stipulation, order and prepare exhibits.

Phone call from attorney Allen Hyman.

E-mail to opposing counsel Tom Case regarding Adzona stipulation.

Phone call to Allen Hyman regarding newly drafted stipulation/order.

Phone call to Mr. Case's office regarding mistake in stipulation/order.

Phone call from Angle Grose at Mr. Case's office.

Receive and analyze 2 facsimile transmissions from attorney Allen Hyman.

Receive and review fax transmittal from opposing counsel Tom Case.

Revise stipulation/order and prepare for signature.

E-mail to Angie Gross regarding revisions.

E-mail to opposing counsel and Allen Hyman regarding joint stipulation.

Review file regarding status of examination of Client.

Call to client leaving detailed message regarding court appearance on Monday,

Receive and review Order regarding vacating Court Order.

Review and analyze Court Order granting Stipulation regarding Court's January 22 Order regarding appearance at Debtor's Exam.

Receive and review Cabanday letter regarding status of sanctions.

Receive and analyze fax transmittal from Orlando Cabanday dated February 20 2007, to Lisa Hemann

Rate 230.00

230.00

230.00

230.00

230.00

230.00

230.00

230.00

230.00

230.00

230.00

230.00

230.00

275.00

230.0O

275.00

230.00

275.00

Hours 0.30

0.20

2.60

0,20

0.20

0.30

0.20

0.20

0.20

0.10

0.20

O.2O

0.20

0.40

0.10

0.10

0.40

0.10

69.00

46.00

598.00

46.00

46.00

69.00

46.00

46,00

46.00

23.00

46.00

46.00

46.00

110.00

23.00

27.50

92.00

27.50





Page: 3 03131/2007 652-001M

6901

JDC

03/12/2007 LMH

CO

LMH

LMH

LMH

LMH

LMH

03/13/2007 LMH

Timekeeper, Dan Campbell Carol Owens Lisa M. Hemann

regarding the Court ordered monetary sanctions issued against Mr. E[azar.

Receive and review fax transmittal from Orlando Cabanday dated February 20 2007, to Lisa Hemann regarding the Court ordered monetary sanctions issued against Mr. Elazar.

Review and analyze correspondence from Cabanday regarding monetary sanctions pursuant to court order.

Analyze file for status of sanctions payment and compliance with Subpoena duces Tecum

Call to Allen Hyman's office regarding check for sanctions.

E-mail from co-counsel Allen Hyman regarding sanctions.

Receive and analyze e-mail from co-counsel to opposing counsel (O. Cabanday) regarding sanctions.

E-mail to co-counsel Allen Hyman regarding order for sanctions.

Receive and analyze e-mail from co-counsel Allen Hyman regarding order granting motion to compel and sanctions.

E-mail to co-counsel Allen Hyman. For Current Services Rendered

Title Partner Paralegal Associate

Recapitulation Hours

1.70 0.90 9.10

Rate

275.00

275.OO

230.00

140.00

230.00

230.00

230.00

230,00

230.00

230.00

Rate $275.00 140.00 230.00

Hours

0.10

0.10

0.30

0.60

0.30

0,40

0.20

0.20

0.20

0.20

11.70

27.50

27.50

69.00

84.00

69.00

92.00

46.00

46.00

46.00

46.00

2,686.50

Total $467.50 126.00

2,093.00

03/02/2007 03/09/2007 03/12/2007

Photocopies; 23 @ .25/Copy Fax charges;6 @ .25/Page Fax charges; 16 @ .25/Page Total Expenses

Total Current Work

Expenses

5.75 1.50 4.00

11.25

2,697.75


O'CONNOR & CAMPBELL

A Professional Corporatioa Attorneys Licensed in Multiple Jurisdictions

[:arid Meshketai & Anita Meshketai 9332 North 71 st Paradise Valley, AZ 85253

Attn:

RE: Fidelity National Title v. Friedman

3838 North Central Avenue City Square Plaza, Suite 1800

Phoenix, Arizona 85012-3501

Telephone 602.241.7000 Facsimile 602.241.7039

Web address www.occlaw.corn

Daniel J. O'Connor, Jr. Tamnra McKane

Dan Campbell Anne Hutchinson

*Miclmel Altaffer Ron A•ue *O£Co•1 Lisa H•mn

Matt Mc•I•

Tax I.D. #20-0319938

05/31/2007 Account No: 652-001

Statement No: 7261

05/01/2007 CO

05/15/2007 JDC

LMH

05130/2007 JDC

LMH

Timekeeper Dan Campbell Carol Owens Lisa M. Hemann

Previous Balance

Fees

Email correspondence to Mr. Spector regarding payment of legal fees

Receive and review Application of Attorney for Admission to Practice Pro Hac Vice Pursuant to LRCiv 83.1(b)(3) filed by Janice M. Kroll, attorney for Plaintiffs Fidelity National Financial, INc.

Receive and analyze Application of Attorney for Admission to Practice Pro Hac Vice Pursuant to LRCiv 83.1(b)(3) filed by Janice M. Kroll, attorney for Plaintiffs Fidelity National Financial, INc.

Receive and review Motion Requiring Judgment-Debtor to Appear and Produce Documents from attorneys for Plaintiffs.

Receive and analyze to Motion Requiring Judgment-Debtor to Appear and Produce Documents from attorneys for Plaintiffs.

For Current Services Rendered

Title Partner Paralegal Associate

Recapitulation Hours 0.20 0.20 0.40

Rate Hours

$12,690.78

140.00 0.20 28.00

275.00 0.10 27.50

230.00 0.10 23.00

275.00 0.10 27.50

Rate $275.00 140.00 230.00

0.30

0.80

230.00 69.00

175.00

Total $55.00 28.00 92.00



TERM SHEET

This Term Sheet is made mad entered into between Yaziv Elazar ("Yaziv") and Eliarfi,, LLC, an Arizona limitgd liability company ("Eliani") with respect to the following:

1. Yariv is in the real estate development business having substantial experience in the acquisition, construction, development and resale of single family residences.

Yariv and Eliarti wish to form a joint venture (or some other form of legal entity to be agreed upon) (the 'Wenttme") pursuant to which Yariv and Eliani will acquire single family residences, remodel or otherwise improve the same and resell the same.

3. Eliani will provide the financial support for the Venture in the form of capital or secured loans which it will make, as Eliani elects.

4. Yariv will provide the acquisition and the construction know how and expertise for the Venture.

5. The Parties contemplate entry into a definitive agreement to memorialize the terms and conditions set forth hea'ein.

Now, therefore, for a valuable consideration, the receipt and sufficiency of which is hereby acknowledged, Yariv and Eliani (collectively, the "Parties") hereby agree as follows:

A. Each of the foregoing paragraphs is incorporated hereat by reference as though fully set forth.

Be Yariv had identified three properties for acquisition, as follows: 6535 E. Paradise Dr., Scottsdale, AZ, 6032 Delcoa Ave., Scottsdale, AZ and 6923 E. Lakespur Dr., Scottsdale, AZ (collectively, the "Properties").

Co Title to the Properties will be acquired temporarily in Yariv's persortal name as his sole and separate property. However, Yariv will not have paid any portion of the pumhasc price for the Properties. Accordingly, Yariv acknowledges and agrees that he is holding title to the Properties as a tntstee for the Venture and for paymem of the monetary contributions (or loans) (the "Contributions") made by Eliani to a•quire the Properties and otherwise.

Do The Parties asknowledge that all monetary contributions to acquire the Properties were made by Eliani or were made from funds borrowed from a [mancial institution. To evidence such monetary contributions, and in order to ensure that such monetary contributions are returned or paid back to either Eliani or the financial imtitution from which the same was borrowed, respectively, Yariv

•EXHm•NO. / ]

367 l • •-!I!-•0•

050255

EXHIBIT

YE00256


agrees that such monetaxy contributions shall be evidenced by promissory notes secured by recorded deeds of trust on the Properties. Yariv agrees to execute the

same promptly upon r•quest. The obligations evidenced by the promissory notes owing to Eliani shall remain emant until such time as the title to the Properties is transferred to the Venture by Yariv, such transfer being specifically contemplated by the Parties, or otherwise paid. The promissory notes owing to E[iani shall bear int•.st at the rate of 5% per annum.

I. Yariv agrees to obtain fire, casualty and liability insurance on the Properties as

a• by the Pa.edcs in an amount sufficient to protect the interests of Eliani and

any financial institution and to name Eliani and the financial institution as loss

payee or named insul• as the case may be.

Fo With respect to the Venture, the Parties agree that Eliani shall receive all Contributions which it made to the respective Property prior to any distribution of profit or return of capital to Yariv.

G. Upon satisfaction in full of all debts and obligations of the Venture with respect to

each Property, as the case may be, the remaining proceeds/funds shall be divided equally between Yadv and Eliani.

H. All decisions respecting the Venture and the Properties, including financing, construction and resale, shall be made jointly between the Parties.

Yariv hereby indcnmifies and holds Eliani • and harmless from any loss, damage, claim or liability regarding the Properties and construction activity undertaken in connection therewith.

Notwithstanding the contemplation of the Parties that a definitive agreement respecting the Venture is to be executed, this Term Sheet shall be a valid, binding and enforceable agreement between the Parties.

K. This Term Sheet shall be binding upon and inure to the benefit of the successors

and assigns of the Parties hereto.

L. To the extent applicable, any dispute between the Parties over this Term Sheet, the Venture or the Properties shall be resolved by binding arbitration.

M. This Term Sheet shall be governed by the laws of the State of Arizona.

No Each ofthc Parties agrees to execute such other and further agreements, documents or instruments as may be necessary or appropriate to carry out the intent of the Parties as expressed in this Term Sheet.

In witness whereof, the Parties have executed this Term Sheet as set forth below.

050256 YE00257


E1iani, LLC

050257 YE00258


Exhibit "31 370 Case 2:03-cv-01222-RCB Document 191-6 Filed 07/01/2008 Page 42 of 82

FIRST SUPPLEMENT TO TERM SHEET BETWEEN YARIV ELAZER AND ELIANI, LLC

This First Supplement to Term Sheet between Yariv Ehzcr ("Yariv") and Eliani, LLC, an Arizona limited liability company ('•Eliani") is made and entered into with respect to the following:

Yariv and Eliani heretofore entered into that certain Tenrt Sheet pursuant to which certain terms were agreed upon between them respecting a Venture. Capitalized terms not otherwise d•fin•l hca'cin shall have the meaning ascribed to them in the Term Sheet.

2. Pursuant to the Term Sheet, the Propextics have been purchased and Yard has umlermken consma•n activities thereon.

Upon completion of co--on, it is contemplated by the Partita that the Properties will be sold thercby generating funds for the return of the Contn'butions to Eliani and proffts for the Venture (the "Pmfits'3. The rc•uru• Contributions and the Profas are tlm subject of this First Supplement

4. This First Supplement is made and craered to sct forth the agreement of the Parties respecting the rctmzz• Contn'butions and the Profits.

Now, therefore, for a valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties hereby agree as follows:

A. The foregoing paragraphs are incorporated hereal by reference as though fully set fordx

B. The term of the Venture shall be five (5) years.

C. Upon the sale of the Propcafcs, the Partics agree that the Conm'butions and Profits shall bc reinvested in additional properties which the Parties agree to purr,/msc, remodel and rescll during the term ofthc Vcnture.

D. The Parties may agree between them to distn'butc a portion of the Profits notwithstanding the provisions of paragraph C, above.

E. Except as set forth lgrcin, the Parties re.a/rama the Term Sheet and all of the terms, conditions and provisions thereof and acknowledge that the same is in full force and effect according to its tcrm•

In witness whereof; the Parties have executed this First Supplement as set forth below.

050 58

YE00259


F.,fia• LLC

050259

372 YE00260



PROMISSORY NOTE

$500,000.00 Effective Date: March 13, 2006

FOR VALUE RECEIVED, the undersigned YARIV ELAZAR, ("Maker") promises to pay to the order of ELIANI, LLC, an Arizona limited liability company ("Payee"), at 6630 East Camino de los ranchos, Scottsdale, Arizona 85254, or at such other address as the holder may from time to time designate in writing, the principal sum of Five Hundred Thousand and NO/100 DOLLARS ($500,000.00), with interest from March 13, 2006 at the rate of 8 percent per annum. The entire principal balance together with accrued interest and all other sums due hereunder shall be due and payable fifteen days after written demand by Payee.

Maker may prepay all or any portion of the unpaid principal balance without penalty or fee. All interest accrued to date of such prepayment shall be paid along with the principal payment. Principal, interest and all other sums payable hereunder shall be paid in lawful money of the United States of America.

MAKER AGREES THAT:

1. If any sums due under this Note remain past due for five (5) calendar days or

more, the outstanding principal balance of this Note shall bear interest during the period in which the Maker is in default at a rate of fifteen percent (15%) per annum, or, if such increased rate of interest may not be collected from Maker under applicable law, then at the maximum increased rate of interest, if any, which may be collected from Maker under applicable law.

2. From time to time, without affecting the obligation of Maker or Maker's successors or assigns to pay the outstanding principal balance of this Note, and observe the covenants of Maker contained herein, without affecting the guaranty of any person, corporation, partnership or other entity for payment of the outstanding principal balance of this Note; without giving notice to or obtaining the consent of Maker or Maker's successors or assigns or guarantors, and without liability on the part of the holder hereof, the holder hereof may, at the option of the holder hereof, extend the time for payment of said outstanding principal balance, accept a renewal of this Note, modify the terms and time of payment of said outstanding principal balance,join in any extension or subordination agreement, release any security given therefore, take or release other or additional security, or agree in writing with Maker to modify the rate of interest or period of amortization of this Note. This Note shall be the joint and several obligation of all makers, sureties, guarantors or endorsers, and shall be binding upon them and their successors and assigns.

3. Maker waives diligence, grace, demand, presentment for payment, exhibition of this Note, protest, notice of dishonor, notice of demand, any and all homestead rights, and all exemption rights against the same indebtedness. Maker agrees to any and all extensions or renewals from time to time without notice, any partial payments made before or after maturity, and that no such extension, renewal or partial payment shall release any one or all of them from the obligation of payment of this Note.

050268 YE00269


any subsequent def•iult or the fight to exercise any other option or election given to the holder hereof.

5. The use of the term "Maker", and the use of the terms in the plural, and use of the terms in the singular, shall include, in all instances, masculine, feminine and neuter gender and plural and singular number.

6. In the event of any default in the payment of this Note, and if the same is referred to an attorney for collection, or any action at law or in equity or in arbitration is brought with respect hereto, Maker shall pay to holder hereof all expenses and costs, including, but not limited to, reasonable attorneys' fees.

7. Maker shall be personally liable for all amounts (principal, interest, costs, expenses or otherwise) due under this Note at any time and the holder hereof may pursue any remedy available to him at law or in equity, including but not limited to sale or foreclosure as

provided in the Deed of Trust and other security instruments securing payment of this Note. In the event of any default in the payment of this Note, and if the same is referred to an attorney for collection, or any action at law or in equity or in arbitration is brought with respect hereto, Maker shall pay to holder hereof all expenses and costs, including, but not limited to, reasonable attorneys' fees.

8. The obligation evidenced by this Note is secured by a Deed of Trust and Security Agreement of even date herewith on real property situated in Maricopa County, Arizona.

9. This note shall be governed by and construed in accordance with the laws of the State of Arizona. Maker hereby consents to jurisdiction and venue in Maricopa County, Arizona with respect to any issue pertaining to or arising from this Note and the Security Agreement. Time is of the essence of this Note and each provision hereof.

MAKER:

Yariv •

Address: 6035 East Deleoa Ave. Scottsdale, Arizona 85254

S :\Friedman.Ck2207502 M eshkata•OtherWromNote-demand-Elazar.doc

375

050269 YE00270



PROMISSORY NOTE

$613,000.00 Effective Date: May 25, 2006

FOR VALUE RECEIVED, the undersigned YARIV ELAZAR, a married man dealing with his sole and separate property ("Maker") promises to pay to the order of ELIANI, LLC, an Arizona limited liability company ("Payee"), at 6630 East Camino de los ranchos, Scottsdale, Arizona 85254, or at such other address as the holder may from time to time designate in writing, the principal sum of Six Hundred and Thirteen Thousand and NO/100 DOLLARS ($613,000.00), with interest from May 25, 2006 at the rate of 8 percent per annum. The entire principal balance together with accrued interest and all other sums due hereunder shall be due and payable fifteen days after written demand by Payee.

Maker may prepay all or any portion of the unpaid principal balance without penalty or fee. All interest accrued to date of such prepayment shall be paid along with the principal payment. Principal, interest and all other sums payable hereunder shall be paid in lawful money of the United States of America.

MAKER AGREES THAT:

I. If any sums due under this Note remain past due for five (5) calendar days or

more, the outstanding principal balance of this Note shall bear interest during the period in which the Maker is in default at a rate of fifteen percent (15%) per annum, or, if such increased rate of interest may not be collected from Maker under applicable law, then at the maximum increased rate of interest, if any, which may be collected from Maker under applicable law.

2. From time to time, without affecting the obligation of Maker or Maker's successors or assigns to pay the outstanding principal balance of this Note, and observe the covenants of Maker contained herein, without affecting the guaranty of any person, corporation, partnership or other entity for payment of the outstanding principal balance of this Note; without giving notice to or obtaining the consent of Maker or Maker's successors or assigns or

guarantors, and without liability on the part of the holder hereof, the holder hereof may, at the option of the holder hereof, extend the time for payment of said outstanding principal balance, accept a renewal of this Note, modify the terms and time of payment of said outstanding principal balance, join in any extension or subordination agreement, re/ease any security given therefore, take or release other or additional security, or agree in writing with Maker to modify the rate of interest or period of amortization of this Note. This Note shall be the joint and several obligation of all makers, sureties, guarantors or endorsers, and shall be binding upon them and their successors and assigns.

3. Maker waives diligence, grace, demand, presentment for payment, exhibition of this Note, protest, notice of dishonor, notice of demand, any and all homestead rights, and all exemption rights against the same indebtedness. Maker agrees to any and all extensions or

renewals from time to time without notice, any partial payments made before or after maturity, and that no such extension, renewal or partial payment shall release any one or all of them from the obligation of payment of this Note.

4. Failure by the holder hereof to exercise any option or election herein given to the holder shall not constitute a waiver of the fight to exercise said option or election in the event of

877

050294 YE00295


any subsequent default or the fight to exercise any other option or election given to the holder hereof.

5. The use of the term "Maker", and the use of the terms in the plural, and use of the terms in the singular, shall irtclude, in all instances, masculine, feminine and neuter gender and plural and singular number.

6. In the event of any default in the payment of this Note, and if the same is referred to an attorney for collection, or any action at law or in equity or in arbitration is brought with respect hereto, Maker shall pay to holder hereof all .expenses and costs, including, but not limited to, reasonable attorneys' fees.

7. Maker shall be personally liable for all amounts (.principal, interest, costs, expenses or otherwise) due under this Note at any time and the holder hereof may pursue any remedy available to him at law or in equity, including but not limited to sale or foreclosure as

provided in the Deed of Trust and other security instruments securing payment of this Note. In the event of any default in the payment of this Note, and if the same is referred to an attorney for collection, or any action at law or in equity or in arbitration is brought with respect hereto, Maker shall pay to holder hereof all expenses and costs, including, but not limited to, reasonable attorneys' fees.

8. The obligation evidenced by this Note is secured by a Deed of Trust and Security Agreement of even date herewith on real property situated in Maricopa County, Arizona.

9. This note shall be governed by and construed in accordance with the laws of the State of Arizona. Maker hereby consents to jurisdiction and venue in Maricopa County, Arizona with respect to any issue pertaining to or arising from this Note and the Security Agreement. Time is of the essence of this Note and each provision hereof.

MAKER:

Yariv EI.• "•

Address: 6035 East Del Coa Ave. Scottsdale, Arizona 85254

S:Wriedman.Ck2207502 M eshkatai\OtherWromNot:-demand-Elazar2.doc

378

050295

YE00296



When Recorded Return To: John J. Hebert Heben Schenk P.C. 4742 North 24 th Street Suite 100 Phoenix, Arizona 85016

OFF C AL RECORDS OF MARl COPA COUNTY RECORDER

HELEN PURCELL 2006-0351340 03/15/06 03:23 PM

lOFt

DEED OF TRUST AND SECURITY AGREEMENT

THE STATE OF ARIZONA §

COUNTY OF MARICOPA § KNOW ALL MEN BY THESE PRESENTS:

That Deed of Trust and Security Agreement (the "Deed of Trust") is made and entered into this • day of vXl/af,-.c]-•, 2006, by the undersigned, Yariv Elazar, hereinafter called "Trustors" (whether one or more), whose address for notice hereunder is 6035 East Deleoa Ave., Scottsdale, AZ 85254, in favor of Transnation Title Insurance Company, hereinafter caIIed "Trustee," whose address is 1121 N. Tatum Blvd., Suite 220 Phoenix Arizona 85028, for the benefit of Eliani LLC, an Arizona limited liability company as beneficiary, hereinafter called "Beneficiary", whose address for notice is 6630 East Camino de los ranchos, Scottsdale, Arizona 852.54.

Trustors in consideration ofTEN AND NO/] O0 DOLLARS {$10.00) cash in hand paid by Trustee, the receipt ofwhich payment is hereby acknowledged and confessed, and of the debt and trust hereinafter mentioned, have Granted, Bargained, Sold and Conveyed, and by these presents do Grant, Bargain, Sell and Convey unto Trustee, and unto the successor or substitute Trustee hereinafter provided, with Power of Sale, the real property situated in Maricopa County, Arizona and described on Exhibit A attached hereto and made a part hereof, reference to which is here made for all purposes, together with all buildings and other improvements thereon and hereafter placed thereon, all rights, titles and interests now owned or hereafter acquired by Trustors in and to all easements, streets and right-of-ways of every kind and nature adjoining the above described property and all public or private utility connections thereto, and all fixtures, materials, goods, equipment, inventory, apparatus, furniture, furnishings and other property, real and personal, now or hereafter instaIled or used on the above described properly or the improvements thereon, and accessions and additions thereto, all of Trustors' interests in any and all leases, subleases, licenses, concessions or other agreements (written or verbal, now or hereafter in effect) which grant a possessory interest in and to, or the fight to extract, reside in, sell or use the real property or any portion thereofand the improvements thereon, all of Trustors' rights, titles and interests in and to the rents, revenues, income, proceeds, royalties, profits and other benefits paid or payable for using, Ieasing, licensing, possessing, operating from or in, residing in, selling, extracting or otherwise enjoying or using the land or improvements, and all the estate, right, title and interest of every nature whatsoever of the Trustors in and to all of the foregoing and ever), part and parcel thereof.

050260

EXHIBIT

YEOb2BI


5 Trustors will keep the premises insured against loss or damage by fire, explosion, windstorm, hail, flood (if the premises shall at any time be located in an identified "flood prone area" in which flood insurance has been made available pursuant to the Flood Disaster Protection Act of" 1973 as amended), tornado and such other hazards as may be required by Beneficiary by policies of fire, extended coverage and other insurance in such company or companies, in such amounts, upon such terms and provisions, and with such endorsements, all as may be acceptable to Beneficiary. Without limiting the discretion of Beneficiary with r•pect to required endorsements to insurance policies, Trustors further agree that all such policies shall provide that proceeds thereunder will be payable to Beneficiary as its interest may appear pursuant and subject to a mortgage clause (without contribution) of standard form attached to or otherwise made a part of the applicable policy. Beneficiary is authorized to collect the insurance proceeds, and Beneficiary agrees to allow the insurance proceeds to be used for the restoration of the improvements, provided that no Event of Default exists, and further provided that not more than twenty percent (20%) of the improvements to the premises are damaged or destroyed, and such damage or destruction does not occur within six (6) months of the maturity of the Note. Except as provided in the preceding sentence, Beneficiary is authorized to collect and apply the insurance proceeds at its option, either to the sums secured by this Deed of Trust, whether due or not, (in such manner and in such order with respect to maturities as

Beneficiary shall determine), or to restoration or repair of the property damaged. No interest shall

accrue or be payable to Trustors on any money collected and held by Beneficiary under said policies. The provisions herein shall not create any duty on the part of the Beneficiary to collect insurance proceeds and the Beneficiary shall not be liable for the failure to collect same regardless of the cause of such failure. In the event of foreclosure of this Deed of Trust or other transfer of the premises, in extinguishment of the indebtedness secured hereby, complete title to all policies held by the Beneficiary, all proceeds thereof resulting from damages to the properties prior to sale or acquisition, and all unearned premiums thereon shall pass to and vest in the purchaser or grantee.

6 IfTrustors fail to pay before delinquency all taxes, assessments, maintenance charges and other charges imposed, levied or assessed against said property or to maintain the insurance

coverage, all as herein provided, Beneficiary may, at its option and without waiver ofanyother rights granted by this Deed of Trust for breach of the covenants contained herein, procure and pay for any such insurance coverage and pay any such taxes, assessments, maintenance charges and other charges, including any sums that may be necessary to redeem the premises from tax sale, without obligation to inquire into the validity of any such taxes, assessments, charges and tax sales, the receipts of the proper officers being conclusive evidence of the validity and amount thereof. All amounts so paid by Beneficiary shall immediately become due and payable on demand to Beneficiary, and shah bear interest from the date of demand at the rate payable on the outstanding principal sum under the Note secured hereby, and all such amounls shall become additional indebtedness secured by this Deed of Trust.

7 Trustors will not suffer or permit any lien superior or equal to the lien created hereby to attach to or to be enforced against the premises.

8 Beneficiary shall have the right to receive and collect all amounts and damages awarded bysuch condemnation proceedings. If in the reasonable opinion of Beneficiary less than ten

Page 3 of 10

YE00262


(I 0"/o) percent of the premises shall bc taken for public use under the power of eminent domain and provided that no Event of Default exists, Beneficiary agrees to allow such award to be used, to the extent necessary, for the payment of the restoration of the premises and improvements thereon and any remaining award shall be applied on the last maturing installment of the indebtedness secured hereby. If in the reasonable opinion of Beneficiary ten (I 0%) percent or more of the premises shall bc taken for public use under the power of eminent domain, Beneficiary, at its sole option, shall have the fight to apply the same on the last maturing ins/ailments of•e indebtedness secured hereby or

allow such award to be used, to the extent necessary, for the payment of the restoration of the premises and improvements thereon.

9 Trustors expressly waive and renounce the benefit of all present and future laws providing for any appraisement before sale of any of the property covered by this Deed of Trust, commonly known as "appraisement laws", and all present and future laws extending in any manner the time for enforcement of collection oft.he indebtedness secured hereby, commonly known as

laws" and "redemption laws".

0 (a) If the indebtedness secured hereby is fully paid in accordance with the terms and provisions of this instrument, the Note and any other instrument evidencing any indebtedness secured hereby, and if the covenants and agreements contained herein and in any other instrument executed in connection with the indebtedness are kept and performed, then this conveyance shall become nu/] and void and shall be released at the expense of Trustors; otherwise, the same shall remain in full force and effect; and ifdefault is made in the payment of any part of the indebtedness secured hereby or in the performance of any of the covenants and agreements contained in this instrument or if there is an occurrence of an Event of Default as provided in the Note, then in any such event, Beneficiary, at Beneficiary's option, and without notice except as required by the Note (notice ofinlent to accelerate, notice of acceleration, demand or persistence, all of which are hereby waived by Trustors, except as otherwise provided in the Note) may declare the entire indebtedness secured hereby immediately due and payable.

(b) If there is an occurrence of an Event of Default as provided in the Note, Beneficiary may, by written notice to Trustee and Trustors elect to cause the premises to be sold under the power of sale conlained in this Deed of Trust.

(c) Trustee shall record and give notice of Trustcc's sale in the manner required by law, and after the lapse of such time as may then be required by law, Trustee shall sell, in the manner required by law, said property at public auction at the time and place fixed by it in said notice of Trustee's sale as a whole or in separate parcels as directed by the Beneficiary, to the highest bidder for cash in lawful money of the United States, payable at the time of the sale. Trustee may postpone or continue the sale by giving notice of postponement or continuance by public declaration at the time and place last appointed for the sale. No other notice of the postponed sale shall be required. Any person, including the Trustors, the Trustee or the Beneficiary, may purchase at such sale. The Trustee shall deliver to such purchaser its Deed conveying the property so sold, but without any covenant or warranty, expressed or implied.

Page 4 of 10

050262

YE00263


(d) After deducting all costs, fees and expenses of Trustee and of this Trust, including cost of evidence of title in connection with sale and reasonable attorneys' fees, Trustee shall apply the proceeds ofsale to payment of all sums then secured hereby and all other sums due under the terms hereof, with accrued interest; and the remainder, f any to th.e person or persons legally entitled thereto, or as provided in A.R.S. §33-812. To the extent permitted by law, an action may be maintained by Beneficiary to recover a deficiency judgment for any balance due hereunder. Beneficiary may, but is not obligated to, foreclose this Deed of Trust as a realty mortgage.

(c) The acting Trustee shall not be liable for any error of judgment or act done by the acting Trustee in good faith, or be otherwise responsible or accountable under any circumstances whatsoever, except for the acting Trustee's gross negligence or willful misconduct. The acting Trustee shall have the fight to rely on any instrument, document or signature authorizing or supporting any action taken or proposed to be taken by him hereunder, believed by him in good faith to be genuine. All moneys received by the acting Trustee shall, until used or applied as herein provided, be held in trust for the purposes for which they were received, but need not be segregated in any manner from any other moneys (except to the extent required by law), and the acting Trustee shall be under no liability for interest on any moneys received by him hereunder. Trustors will reimburse the acting Trustee for, and indemnify and save him harmless against, any and all liability and expenses, which may be incurred by him in the performance of his duties hereunder.

(f) Upon the occurrence and continuance of an Event of Dcfault, Beneficiary as a

matter of right shall be entitled to the appointment of a receiver or receivers for all or any part of the premises, to take possession of and to operate the premises, and to collect the rents, issues, profits, and income thereof, all expenses of which shall be added to the indebtedness secured hereby, whether such receivership be incident to a proposed sale (or sales)of such property or otherwise, and without regard 1o the value of the premises or the solvency of Trustors or any person or persons liable for the payment of the indebtedness secured hereby, and the Trustors do hereby irrevocably consent to the appointment of such receiver or receivers, waive any and all defenses to such appointment, and agree not to oppose any application therefore by Beneficiary. Nothing herein is to be construed to deprive the Beneficiary of any other right, remedy or privilege it may have under the law to have a receiver appointed. Any money advanced by the Beneficiary in connection with any such receivership shall be a demand obligation (which obligation the Trustors hereby promise to pay) owing by the Trustors to the Beneficiary pursuant to this Deed of Trust.

11 In the event ot'a foreclosure under the powers granted by this Deed of Trust, Trustors, and all other persons in possession of any part ofthe premises, shall be deemed tenants at will of the purchaser at such foreclosure sale and shall be liable for a reasonable rental for the use of said premises; and if any such tenants refuse to surrender possession ofsaid premises upon demand, the purchaser shall be entitled to institute and maintain the statutory action of forcible entry and detainer and procure a writ of possession thereunder, and Trustors expressly waive all damages suslained by reason thereof. This remedy is cumulative of any and all remedies the purchaser may have hereunder or otherwise. This Deed of Trust and Trustee's Deed executed under the powers created hereby shall be, in any action of forcible detainer, prima facie evidence of the existence of the relationship of landlord and tenant as between the purchaser and Trustors, their tenants and/or assigns.

Page 5 of 10

050263 YE00264


12 In case of the death, inability, refusal or incapacity ofthc herein named Trustee to act, or at the option ofany Beneficiary at any time and without cause or notice, a successor or substitute Trustee may be named, constituted and appointed. Successor or substitute Trustees may be named, constituted and appointed without procuring the resignalion of the former Trustee and without other formality than compliance with Arizona law and the execution and acknowledgment by Beneficiary of'a written instnumcnt appointing and designating such successor or substitute Trustee, whereupon such successor or substitute Trustee shall become vested with and succeed to all of the fights, titles, privileges, powers and duties of the Trustee named herein. Such right of appointment of a substitute or successor Trustee shall exist as often and whenever for any of said causes the original or successor

or substitute Trustee cannot or will not act or has been removed as herein provided.

13 This Deed of Trust and the rights and obligations of the parties hereunder and. thereunder shall in all respects be governed by, and construed and enforced in accordance with, the laws of the State of Arizona.

14 This instrument shall be deemed to be and may bc enforced from time to time as a

Deed of Trust, Assignment, Contract, Security Agreement or Financing Statement, and from time to time as any one or more thereof, and shall constitute a "fixture filing" for purposes ofArticle 9 of the Arizona Uniform Commercial Code covering goods that are fixtures or are Io become fixtures on the above described real property.

15 If the lien created by this Deed of Trust shall be invalid or unenforceable as to any part of the indebtedness secured hereby, the unsecured portion of said indebtedness shall be completely paid and liquidated prior to the payment and liquidation of the remaining and secured portion of said indebtedness, and all payments made on said indebtedness shall be considered to have been first paid on and applied to the complete payment and liquidation of that portion of the indebtedness which is not secured by the lien of this Deed of Trust.

16 To further secure payment of the indebtedness, Trustors hereby grant a security interest to Beneficiary in and to all personal property hereinabove described, together with the proceeds and products thereof(all of such personal property and to the proceeds and products thereof being herein called the "Collateral", but the mention ofproceeds of Collateral herein shall not be construed as an authorization for the sale or surrender by Trustors of Collateral and Collateral as used in this Deed of Trust shall be included in the term "premises" when used herein). This document shall constitute a security agreement as well as a deed oftrust. The following applies with respect to Collaterali

(a) In addition to and cumulative of any other remedies granted in this Deed of Trust to Beneficiary, Beneficiary may, upon default hereunder, proceed under Chapter 9 of the Arizona Business and Commerce Code as now adopted and existing and as it may hereafter be amended or succeeded (hereinafter called "Uniform Commercial Code") as to all or any part of the Collateral and shall have and may exercise with respect to all or any part of the Collateral all of the rights, remedies and powers of a secured party under the Uniform Commercial Code, including,

Page 6 of 10

050 64

YE00265


without limitation, the right and power to repossess, retain and to sell, at public or private sale or

sales, or otherwise dispose of, lease or utilize the Collateral or any part thereof and to dispose of the proceeds in any manner authorized or permitted under the applicable provisions of the Uniform Commercial Code, and to apply the proceeds thereto toward payment of Beneficiary's reasonable attorneys' fees and other expenses and costs of pursuing, searching for, receiving, taking, keeping," storing, advertising, and selling the Collateral thereby incurred by Beneficiary, and toward payment of the indebtedness in such order and manner as Beneficiary may elect consistent with the provisions of the Uniform Commercial Code. Nothing in this paragraph shall be construed to impair or limit any other right or power to which Beneficiary may be entitled at law or in equity.

(b) Among the rights of Beneficiary upon default and acceleration of the indebtedness pursuant to the provisions thereof, and without limitation, Beneficiary shall have the fight (but not Ire obligation), without being deemed guilty of trespass and without liability for damages thereby occasioned, (i) to enter upon any premises where said Collateral may be situated and take possession of the Collateral, or render it unusable, or dispose of the Collateral on Trustors' premises, and Trustors agree not to resist or to interfere, and (ii) to take any action deemed necessary or appropriate or desirable by Beneficiary at Beneficiary's option and in its discretion, to repair, refurbish or otherwise prepare the Collateral for sale, lease or other use or deposition as herein authorized. After default hereunder by Trustors, Beneficiary may at B eneficiary's discretion require Trustors to assemble the Collateral and make it available to Beneficiary at a place designated by Beneficiary that is reasonably convenient to both parties.

(c) Beneficiary shall give Trustors notice, by certified mail, postage prepaid, of the time and place of any public sale of any of the Collateral or of the time after which any private sale or other intended disposition thereo fis to be made by sending notice to Trustors at the address of Trustors as hereinabove set forth at least ten (] 0) days before the time ofthe sale or other disposition, which provisions for notice Truslors and Beneficiary agree are reasonable; provided, however, that nothing herein shall preelude Beneficiary from proceeding as to both real and personal property in accordance with Beneficiary's fights and remedies in respect to r•al property as provided in the Uniform Commercial Code, and without any notice to Trustors. In the event that Beneficiary elects to proceed againsl that part of the premises which is personal property in accordance with Beneficiary's fights in respect of that portion of the premises which is real property, the Trustee may sell such personal property in the same manner, at the same time as the real property, and may execute and deliver a bill of sale conveying such property with covenants of general warranty on behalfofTrustors. Trustors acknowledge and agree that such a sale of the personal property by the Trustee shall be a commercially reasonable sale.

(d) To the extent such may now or hereafter be permitted under Arizona law, Beneficiary is authorized to execute and file financing statements and continuation statements under the Uniform Commercial Code with respect to the Collateral without joiner of Trustors in such execution or filing. Trustors shall execute and deliver to Beneficiary such financing statements, continuation statements and other documents relating to the Collateral as Beneficiary may reasonably request from time to time to preserve and maintain the priority of the security interest created by this Deed of Trust and shall pay to Beneficiary on demand any expenses and attorneys' fees incurred by Beneficiary in connection with the preparation, execution and filing of this Deed of Trust and ofany

Page 7 of 10

050265 YE00266


financing statements, continuation statements, partial releases, termination statements or other documents necessary or desirable to continue or confirm Beneficiary's security interest, or any modification thereof. This document, and any carbon, photographic or other reproduction of this document may be filed by Beneficiary and.shal] be sufficienl as a financing statement. All or part of the premises is or is to become fixtures on the real estate constituting a portion of the premises, but this statement shall not impair or limit the effectiveness of this document as a security agreement or financing statement for other purposes, and this Deed of Trust shall constitute a fixture financing statement and, as such, shall be filed for record in the real estate records of the county in which the land covered hereby is located. Trustors shall not change Trustors name without the prior express written consent of Beneficiary. The name of the record owner ofthe land covered hereby is the party or parties defined herein as Trustors.

(e) Trustors agree that, except for the security interest granted hereby in the Collateral, Trustors are the owners of the Collateral free and clear of any adverse claim, security interest or encumbrance, and Trustors shall defend the Collateral against all claims and demands of any person at any time claiming the same or any interest therein. Trustors have not heretofore signed any financing statement and no financing statement signed by Trustors is now on file in any public office except those statements, true and correct copies of which have been delivered to Beneficiary. Except as may be permitted herein or except as to any purchase money, title retention or security agreement, so long as may amount remains unpaid on said indebtedness, Trustors shall not execute and there shall not be filed in any public office any such financing statement or statements affecting the Collateral other than financing statements in favor of Beneficiary hereunder.

(t• The security interest granted herein shall not be construed or deemed to constitute Beneficiary as Trustee as a trustee or mortgagee in possession of the premises so as to obligate Beneficiary or Trustee to lease the premises or atlempt to do lhe same, or to take any action, incur any expenses or perform or discharge any obligation, duty or liability with respect to the premises or any part thereof or otherwise.

17 All rights and remedies of Beneficiary and Trustee hereunder are cumulative and not alternative, and are in addition to all rig, his and remedies otherwise provided by law and/or by other agreements executed in connection with the indebtedness secured herein. It is expressly agreed and understood that the exercise of any option in this Deed of Trust by the Beneficiary shall not be considered as a waiver of its right to exercise any other option provided herein and the failure or the refusal to exercise any such option shall not be considered as a waiver of the option.

18 Advances under the Note shall be in accordance with the terms and provisions of the Note. Furthermore, the Note defines the term "'Event of Default." Any reference to an Event of Default in this Deed of Trust shall mean an Event of Default as defined in the Note, which definition of an Event of Default is incorporated herein by reference.

19 At any time or from time to time, and without notice, upon written request of Beneficiary and presentation of this Deed of Trust, and without liability therefore, and without affecting the personal liability of any person for payment of the indebtedness secured hereby, and without affecting the security hereof for the full amount secured hereby on all property remaining

Page 8 of 0

050268

YE00267


subject hereto, and without the necessity that any sum representing the value or any portion thereof of the property affected by the Trustee's action be credited on the indebtedness, and upon payment of its fees, the Trustee may (a) release and reconvey all or any part of said property; (b) consent to the making and recording, or either, of any map or plat of the property or any part thereof; (c) join in granting any easement thereon; (d) join in or consent to any extension agreement or any agreement subordinating the lien, encumbrance, or charge hereof.

20 Tnastors request that a copy of any notice of Trustees' sale hereunder be mailed to it at the address hereinabove set forth.

21 The covenants and agreements herein contained shall be joint and several and shall inure to the benefit of and be binding upon the respective heirs, successors, assigns, and legal representatives of •e parties hereto. Whenever used, the singular number shall include the plural, the plural the singular, and the use of any gender shall be applicable to all genders.

Yariv •

THE STATE OF ARIZONA

County of Maricopa )

L ..t•,

My Commission Expires:

this

SAlt, icdman.C3220750:• Mexhkatai\Othcr•DOT. Elazar.do¢

Page 9 of 10

050267

YE00268



When Recorded Return To: ]ohn J. Hebert Hebert Schenk P.C. 4742 North 24 a' Street Suite 100 Phoenix, Arizona 85016

OFFICIAL RECORDS OF MARl COPA COUNTY RECORDER

HELEN PURCELL. 2006-8727322 B5/30/BB 03:B4 PM

10F1

DEED OF TRUST AND SECURITY AGREEMENT

THE STATE OF ARIZONA §

COUNTY" OF MARICOPA § KNOW ALL MEN BY THESE PRESENTS:

That Deed o fTrust and Security Agreement (the "Deed of Trust") is made and entered into this ,,1.• day of .,,t4,,,d¢ ,2006, by the undersigned, Yariv Elazar, a married man dealing with his sole and separate property, hereinafter called "Trustors" (whether one or more), whose address for notice hereunder is 6035 East Del Con Ave., Scottsdale, AZ 85254, in favor of LandAmerica Transnation Title Insurance Company, hereinafter called "T•stee," whose address is 1850 N. Central Ave., Suite 1200 Phoenix Arizona 85004, for the benefit of Eliani LLC, an Arizona limited liability company as beneficiary, hereinafter called "Beneficiary", whose address for notice is 6630 East Camino de los ranchos, Scottsdale, Arizona 85254.

Trustors in consideration ofTEN AND NO/100 DOLLARS ($10.00) cash in hand paid by Trustee, the receipt of which payment is hereby acknowledged and confessed, and of the debt and trust hereinaflermentioned, have Granted, Bargained, Sold and Conveyed, and by these presents do Grant, Bargain, Sell and Convey unto Trustee, and unto the successor or substitute Trustee hereinafter provided, with Power of Sale, the real property situated in Marjcopa County, Arizona and described on Exhibit A attached hereto and made a part hereof, reference to which is here made for all purposes, together with all buildings and other improvements thereon and hereafter placed thereon, all fights, tilles and interests now owned or hereafter acquired by Trustors in and to all easements, streets and fight-of-ways of every kind and nature adjoining the above described property and all public or private utility connections thereto, and all fixtures, materials, goods, equipment, inventory, apparatus, furniture, furnishings and other property, real and personal, now or hereafter installed or used on the above described property or the improvements thereon, and accessions and additions therelo, all ofTrustors' interesls in any and all leases, subleases, ]icenses, concessions or

other agreements (written or verbal, now or hereafter in effect) which grant a possessory interest in and to, or the right to extract, reside in, sell or use the real property or any portion thereof and the improvements thereon, all of Trustors' rights, titles and interests in and to the rents, revenues, income, proceeds, royalties, profits and other benefits paid or payable for using leasing, licensing, possessing, operating from or in, residing in, selling, extracting or otherwise enjoying or using the land or improvements, and all the estate, right, title and interest of every nature whatsoever of the Trustors in and to all of the foregoing and every part and parcel thereof.

O5O281

YEOO2B2


TO HAVE AND TO HOLD the above described property, together with all and singular the rights, privileges, hereditaments and appurtenances thereunto in anywise incident, appertaining or belonging (all of which are hereinafter called "premises") unto Trustee, and his successors or substitutes forever, and Trustors here.by bind themselves, their heirs, successors, assigns and legal representatives, to warrant and forever defend title to said premises unto Trustee, his successors and substitutes, against every person whomsoever lawfully claiming or to claim the same or any part thereof.

This conveyance is made in trust on the following trusts, terms and conditions, and for the purpose of securing and enforcing the payment of a certain Revolving Credit Note (hereinafter called "Note") dated of even date herewith, in the principal sum of SIX HUNDRED AND THIRTEEN THOUSAND AND NO/100 DOLLARS ($613,000.00), being payable as therein provided, and beating interest before and after maturity thereof as therein specified, containing certain accelerating maturity and attorney's fee collection clauses, as specified therein (said promissory note being incorporated herein by reference), executed by Trustors and payable to the order of BENEF1CIARY, whose address is 6630 East Camino de los ranchos, Scottsda]e, Arizona 85254 (hereinafter, together with any subsequent holder of the Note, called "Bene•c.iary") in lawful money of the United States of America; all renewals, rearrangements, modifications and/or extensions of the Note; and all other sums of money which may be hereafter paid or advanced by or on behalf of Beneficiary under the terms and provisions of this Deed of Trust. An Event of Default under the terms of the Note or under this Deed o fTrust will give Beneficiary the right to accelerate said Note and to foreclose under the terms of this Deed of Trust.

Trustors hereby expressly covenant and agree that:

Trustors will pay the Note and indebtedness secured hereby in accordance with the terms and provisions thereof.

2 The execution of this Deed of Trust shall not impair or affect any other security, which may be given to secure the payment of the indebtedness secured hereby, and all such additional security shall be considered as cumulative. The taking of additional securily, execution of partial releases of the security or any extension of time of payment of the indebtedness secured hereby, shall not diminish the force, effect or lien of this Deed of Trust and shall nol affect or impair the liability of any maker, surety, guarantor or endorser for the payment of said indebtedness.

3 Trustors will pay as same comes due and before same become delinquenl, all taxes, assessments and other charges imposed, levied or assessed against the premises.

4 Trustors will keep the premises in good condition and repair and will not commit or

permit any waste, impairment or deterioration of the same and generally will not do any act by which the value of the above described premises may become impaired. Neither shall any improvements, fixtures, or personal property be altered, destroyed or removed from said premises without the written consent of Beneficiary. Trustors shall not cause or permit any drilling or explor•,tion for or extraction, removal or production of, minerals from the surface or subsurface of the above-described real property.

Page 2 of 10

050282 YE00283


5 Trustors will keep the premises insured against loss or damage by fire, explosion, windstorm, hail, flood (if the premises shall at any time be lo•ted in an identified "flood prone area'" in which flood insurance has been made available pursuant to the Flood Disaster Protection Act of 1973 as amended), tornado and such other hazards as may be required by Beneficiary by policies of fire, extended coverage and other insurance in such company or companies, in such amounts, upon such terms and provisions, and with such endorsements, all as may be acceptable to Beneficiary. Without limiting the discretion of Beneficiary with respect to required endorsements to insurance policies, Trustors further agree that all such policies shall provide that p•ceeds thereunder will be payable to Beneficiary as its interest may appear pursuant and subject to a mortgage clause (without contribution) of standard form attached to or otherwise made a part of the applicable policy. Beneficiary is authorized to collect the insurance proceeds, and Bermfieiary agrees to allow the insurance proceeds to be used for the restoration of the improvements, provided that no Event of Default exists, and further provided that not more than twenty percent (20*/,) of the improvements to the premises are damaged or destroyed, and such damage or destruction does not occur within six (6) months of the maturity of the Note. Except as provided in the preceding sentence, Beneficiary is authorized to collect and apply the insurance proceeds at its option, either to the sums secured by this Deed of Trust, whether due or not, (in such manner and in such order with respect to maturities •

Beneficiary shall determine), or to restoration or repair of the property damaged. No interest shall accrue or be payable to Trustor• on any money collected and held by Beneficiary under said policies. The provisions herein shall not create any duty on the part of the Beneficiary to collect insurance proceeds and the Beneficiary shall not be liable for the failure to collect same regardless of the cause

of such failure. In the event of foreclosure of this Deed of'l'rust or other transferofthe premises, in extinguishment of the indebtedness secured hereby, complete title to all policies held by the Beneficiary, all proceeds thereof resulting from damages to the properties prior to sale or acquisition, and all unearned premiums thereon shall pass to and vest in the purchaser or grantee.

6 IfTrustors fail to pay before delinquency all taxes, assessments, maintenance charges and other charges imposed, levied or assessed against said property or to maintain the insurance

coverage, all as herein provided, Beneficiary may, at its option and without waiver of any other rights granted by this Deed of Trust for breach of the covenants contained herein, procure and pay for any such insurance coverage and pay any such taxes, assessments, maintenance charges and other charges, including any sums that may be necessary to redeem the premises from tax sale, without obligation to inquire into the validity of any such taxes, assessments, charges and tax sales, the receipts of the proper officers being conclusive evidence of the validity and amount thereof. amounts so paid by Beneficiary shall immediately become due and payable on demand to Beneficiary, and shall bear interest from the date of demand at the rate payable on the outstanding principal sum under the Note secured hereby, and all such amounts shall become additional indebtedness secured by this Deed of Trust.

7 Tmstors will not suffer or permit any lien superior or equal to the lien created hereby to attach to or to be enforced against the premises.

8 Beneficiary shall have the right to receive and collect all amounts and damages awarded by such condemnation proceedings. If in the reasonable opinion of Beneficiary less than ten

Page

050283 YE00284


(10%) percent of the premises shall be taken for public use under the power of eminent domain and provided that no Event of Default exists, Beneficiary agrees to allow such award to be used, to the extent necessary, for the payment of the.restoration of the premises and improvements thereon and

any remaining award shall be applied on the last maturing installment of the indebtedness secured hereby. If in the reasonable opinion of Beneficiary ten (10%) percent or more of the premises shall be taken for public use under the power of eminent domain, Beneficiary, at its sole option, shall have the right to apply the same on the last maturing installments of the indebtedness secured hereby or

allow such award to be used, to the extent necessary, for the payment of the restoration of the premises and improvements thereon.

9 Trustors expressly waive and renounce the benefit of all present and future laws providing for any appraisement before sale of any of the property covered by •is Deed of Trust, commonly known as "'appraisement laws", and all present and future laws extending in any manner the time for enforcement of collection of the indebtedness secured hereby, commonly known as"sta• laws" and "'redemption laws".

I0 (a) If the indebtedness secured hereby is fully paid in accordance with the terms and provisions of this instrument, the Note and any other instrument evidencing any indebtedness secured hereby, and if the covenants and agreements contained herein and in any other instrument executed in connection with the indebtedness are kept and performed, then this conveyance shall become null and void and shall be released at the expense of Trustors; otherwise, the same shall remain in full force and effect; and if default is made in the pa3anent ofany part of the indebtedness seared hereby or in the performance of any of the covenants and agreements contained in this instrument or if there is an occurrence of an Event of Default as provided in the Note, then in any such event, Beneficiary, at Beneficiary's option, and without notice except a• required by the Note (notice of intent to accelerate, notice of acceleration, demand or persistence, all of which are hereby waived by Trustors, except as otherwise provided in the Note) may declare the entire indebtedness secured hereby immediately due and payable.

(b) If there is an occurrence of an Event of Default as provided in the Note, Beneficiary may, by written notice to Trustee and Trustors elect to cause the premises to be sold under the power of sale contained in this Deed of Trust.

(c) Trustee shall record and give notice of Trustee's sale in the manner required by law, and after the lapse ofsuch time as may then be required by law, Trustee shall sell, in themarmer required by law, said property at public auction at the time and place fixed by it in said notice of Trustee's sale as a whole or in separate parcels as directed by the Beneficiary, to the highest bidder for cash in lawful money of the United States, payable at the time of the sale. Trustee may postpone or continue the sale by giving notice of postponement or continuance by public declaration at the time and place last appointed for the sale. No other notice of'the postponed sate shall be required. Any person, including the Truslors, the Trustee or the Beneficiary, may purchase at-such sale. The Trustee shall deliver to such purchaser its Deed conveying the property so sold, but without any covenant or warranty, expressed or implied.

Page 4 of 10

050284

Y'EO0285


EXHIBIT A

LEGAL DESCRIPTION

Lot Thirty-three (33), of DESERT ESTATES UNIT SEVEN, according to Book 73 of M;•ps, page 1, records of Maricopa County, Arizona.

Page 10 of 10

050285

YE00286


TO HAVE AND TO HOLD the above d•cribed prope•y, together with all and singular the rights, privileges, hereditaments and appurtenances theretmto in anywise incident, appertaining or belonging (all of which are hereinafter called "premises") unto Trustee, and his successors or substitutes forever; and Trustors hereby bind themselves, their heirs, successors, assigns and legal representatives, to warrant and forever defend title to said premises unto Trustee, his successors and substitutes, against every person whomsoever lawfully claiming or to claim the same or any part thereof.

This conveyance is made in trust on the following trusts, terms and conditions, and for the purpose of securing and enforcing the payment of a certain Revolving Credit Note (hereinafter called "Note") dated of even date herewith, in the principal sum of FIVE HUNDRED THOUSAND AND NO/100 DOLLARS ($500,000.00), being payable as therein provided, and bearing interest before and after maturity thereof as therein specified, containing certain accelerating maturity and attorney's fee collection clauses, as specified therein (said promissory note being incorporated herein by reference), executed by Trustors and payable to the order of BENEFIC/ARY, whose address is 6630 East Camino de los ranchos, Scottsdale, Arizona 85254 (hereinafter, together with any subsequent holder of the Note, called "Beneficiary") in lawful money of the United States of America; all renewals, rearrangements, modifications arid/or extensions of the Note; and all other sums of money which may be hereafter paid or advanced by or on behalf of Beneficiary under the terms and provisions of this Deed of Trust. An Event of Default under the terms ofthe Note or under this Deed of Trust will give Beneficiary the right to accelerate said Note and to foreclose under the terms of this Deed of Trust.

Trustors hereby expressly covenant and agree that:

Trustors will pay the Note and indebtedness secured hereby in accordance with the terms and provisions thereof.

2 The execution of this Deed of Trust shall not impair or affect any other security, which may be given to secure the payment of the indebtedness secured hereby, and all such additional security shall be considered as cumulative. The taking of additional security, execution of partial releases of the security or any extension of time of payment of the indebtedness secured hereby, shall not diminish the force, effect or lien of this Deed of Trust and shall not affect or impair the liability of any maker, surety, guarantor or endorser for the payment of said indebtedness.

3 Trustors will pay as same comes due and before same become delinquent, all taxes, assessments and other charges imposed, levied or assessed against the premises.

4 Trustors will keep the premises in good condition and repair and will not commit or permit any waste, impairmenl or deterioration of the same and generally will not do any act by which the value of the above described premises may become impaired. Neither shall any improvements, fixture, or personal property be altered, destroyed or removed from said premises without the written consent ofBeneSciary. Trustors shall not cause or permit any drilling or exploration for or extraction, removal or production of, minerals from the surface or subsurface of the above-described rea] property.

Page 2 of 10

050286

YE00287


(d) After deducting all costs, fees and expenses of Trustee and of this Trust, including cost o f evidence of title in con.,aection with sate and reasonable attorneys' fees, Trustee shall apply the proceeds of sale to payment of all sums then secured hereby and all other sums due under the terms hereof, with accrued interest; and the remainder, if a0. y to the person or persons legally entitled thereto, or as provided in A.R.S. §33-812. To the extent permitted by law, an action may be maintained by Beneficiary to recover a deficiency judgment for any balance due hereunder. Beneficiary may, but is not obligated to, foreclose this Deed of Trust as a realty mortgage.

(e) The acting Trustee shall not be Iiable for any error ofjudgment or act done by the acting Trustee in good faith, or be otherwise responsible or accountable under any circumstances whatsoever, except for the acting Trustee's gross negligence or willful misconduct. The acting Trustee shall have the fight to rely on any instrument, document or signature authorizing or

supporting any action taken or proposed to be taken by him hereunder, believed by him in good faith to be genuine. All moneys received by the acting Trustee shall, until used or applied as herein provided, be held in trust for the purposes for which they were received, but need not be segregated in any manner from any other moneys (except to the extent required by law), and the acting Trustee shall be under no liability for interest on any moneys received by him hereunder. Trustors will reimburse the acting Trustee for, and indemnify and save him harmless against, any and all liability and expenses, which may be incurred by him in the performance of his duties hereunder.

(f) Upon the occurrence and continuance ofan Event of Default, Beneficiary as a

matter of right shall be entitled to the appointment of a receiver or receivers for all or any part of the premises, to take possession of and to operate the premises, and to collect the rents, issues, profits, and income thereof, all expenses of which shall be added to the indebtedness secured hereby, whether such receivership be incident to a proposed sale (or sales) ofsuch property or otherwise, and withbut regard to the value of the premises or the solvency of Trustors or any person or persons liable for the payment of the indebtedness secured hereby, and the Trustors do hereby irrevocably consent to the appointment of such receiver or receivers, waive any and all defenses to such appointmenl, and agree not lo oppose any application therefore by Beneficiary. Nothing herein is to

be construed to deprive the Beneficiary of any other right, remedy or privilege it may have under the law to have a receiver appointed. Any money advanced by the Beneficiary in connection with any such receivership shall be a demand obligation (which obligation the Trustors hereby promise to pay) owing by the Trustors to the Beneficiary pursuant to this Deed of Trust.

]n the event of a foreclosure under the powers granted by this Deed ofTrust, Trustors, and all other persons in possession o fany part of the premises, shall be deemed tenants al will of the purchaser at such foreclosure sale and shall be liable for a reasonable rental for the use of said premises; and if any such tenants refuse to surrender possession of said premises upon demand, the purchaser shall be entitled to institute and maintain the statutory action of forcible entry and detainer and procure a writ ofpossession thereunder, and Trustors expressly waive all damages sustained by reason thereof. This remedy is cumulative of any and all remedies the purchaser may have hereunder

or otherwise. This Deed of Trust and Trustee's Deed executed under the powers created hereby shall be, in any action of forcible detainer, prima facie evidence of lhe existence of the relationship of landlord and tenant as between the purchaser and Trustors, their tenants and/or assigns.

Page 5 of l0

050287

YE00288


12 In case of the death, inability, refusal or incapacity of the herein named Trustee to act, or at the option of any Beneficiary at any time and without cause or notice, a successor orsubstitute Trustee may be named, constituted and appointed. Successor or substitute Trustees may be named, constituted and appointed without procuring the resignation of the former Trustee and without other formality than compliance with Arizona law and the execution and acknowledgment by Beneficiary of a written instrument appointing and designating such successor or substitute Trustee, whereupon such successor or substitute Trustee shall become vested with and succeed to all of the rights, titles, privileges, powers and duties of the Trustee named herein. Such right of appointment of a substitute or successor Trustee shall exist as often and whenever for any of said causes the original or successor

or substitule Trustee cannot or will not act or has been removed as herein provided.

13 This Deed of Trust and the rights and obligations of the parties hereunder and thereunder shall in all respects be governed by, and construed and enforced in accordance with, the laws of the State of Arizona.

14 This instrument shall be deemed to be and may be enforced from time to time as a

Deed of Trust, Assignment, Contract, Security Agreement or Financing Slatement, and from time to time as any one or more thereof, and shall constitute a "fixture filinlz" for purposes of Article 9 of the Arizona Uniform Commercial Code covering goods that are fixtures or are to become fixtures on the above described real property.

15 If the lien created by this Deed of Trust shall be invalid or unenforceable as to any part of the indebtedness secured hereby, the unsecured portion of said indebtedness shall be completely paid and liquidated prior to the payment and liquidation of the remaining and secured portion of said indebtedness, and all payments made on said indebtedness shall be considered to have been first paid on and applied to the complete payment and liquidation of that portion of the indebtedness which is not secured by the lien of this Deed of Trust.

16 To further secure payment of the indebtedness, Trustors hereby grant a security interest to Beneficiary in and to all personal property hereinabove described, together with the proceeds and products thereof(all of such personal propeay and to the proceeds and products thereof being herein called the "ColIateral", but the mention of proceeds of Collateral herein shall not be construed as an authorization for the sale or surrender by Trustors of Collateral and Collateral as used in this Deed of Trust shall be included in the term "premises" when used herein). This document shall constitute a security agreement as well as a deed of trust. The following applies with respect Io Collateral:

(a) In addition to and cumulative of any other remedies granted in this Deed of Trust to Beneficiary, Beneficiary may, upon default hereunder, proceed under Chapter 9 of the Arizona Business and Commerce Code as now adopted and existing and as it may hereafter be amended or succeeded (hereinafter called "Uniform Commercial Code") as to all or any part of the Collateral and shall have and may exercise with respect to all or any part ofthe Collateral all ofthe rights, remedies and powers of a secured party under the Uniform Commercial Code, including,

Page 6 of 10

050288 YE00289


without limitation, the right and power to repossess, retain and to sell, at public or private sale or

sales, or otherwise dispose of, lease or utilize the Collateral or any part thereofand to dispose of the proceeds in any manner authorized or permitted under the applicable provisions of the Uniform Commercial Code, and to apply the proceeds thereto toward payment of Beneficiary's reasonable attorneys' fees and other expenses and costs of pursuing, searching for, receiving, taking, keeping, storing, advertising, and selling the Collateral thereby incurred by Beneficiary, and toward payment of the indebtedness in such order and manner as Beneficiary may elect consistent with the provisions oft.he Uniform Commercial Code. Nothing in this paragraph shall be construed to impair or limit any other right or power to which Beneficiary may be entitled at law or in equity.

(b) Among the rights of Beneficiary upon default and acceleration of the indebtedness pursuant to the provisions thereof, and without limitation, Beneficiary shall have the right (but not the obligation), without being deemed guilty of trespass and without liability for damages thereby occasioned, (i) to enter upon any premises where said Collateral may be situated and take possession of the Collateral, or render it unusable, or dispose of the Collateral on Trustors' premises, and Trustors agree not to resist or to interfere, and (ii) to take any action deemed necessary or appropriate or desirable by Beneficiary at Beneficiary's option and in its discretion, to repair, refurbish or otherwise prepare the Collateral for sale, lease or other use or deposition as herein authorized. After default hereunder by Trustors, Beneficiary may at Benefieiary's discretion require Trustors to assemble the Collateral and make it available to Beneficiary at a place designated by Beneficiary that is reasonably convenient to both parties.

(c) Beneficiary shall give Trustors notice, by certified mail, postage prepaid, of the time and place of any public sale of any of the Collateral or of the time after which any private sale or other intended disposition thereof is to be made by sending notice to Trustors at the address of Trustors as hereinabove set forth at least ten (10) days before the time of the sale or other disposition, which provisions for notice Trustors and Beneficiary agree are reasonable; provided, however, that nothing herein shall preclude Beneficiary from proceeding as to both real and personal property in accordance with Beneficiary's rights and remedies in respect to real property as provided in the Uniform Commercial Code, and without any notice to Trustors. In the event that Beneficiary elects to proceed against that parl of the premises which is personal property in accordance with B enefici ary's rights in respect o f that portion of the premises which is real property, the Trustee may sell such personal property in the same manner, at the same time as the real properly, and may execute and deliver a bill of sale conveying such property with covenants of general warranty on

behalfofTrustors. Yrustors acknowledge and agree that such a sale ofthe personal property by the Trustee shall be a commercially reasonable sale.

(d} To the extent such may now or hereafter be permitted under Arizona law, Beneficiary is authorized to execute and file financing statements and continuation statements under the Uniform Commercial Code with respect to the Collateral without joiner of Trustors in such execution or filing. Trustors shall execute and deliver to Beneficiary such financing statements, continuation statements and other documents relating to the Collateral as Beneficiary may reasonably request from time to time to preserve and maintain the priority of the security interest created by this Deed of Trust and shall pay to Beneficiary on demand any expenses and attorneys' fees incurred by Beneficiary in connection with the preparation, execution and filing of this Deed of Trust and ofany

Page 7 of 0

050289

YE00290


financing slatements, continuation statements, partial releases, termination statements or other documents necessary or desirable to continue or confirm Beneficiary's security interest, or any modification thereof. This document, and any carbon, photographic or other r•roducfion of this document may be fi led by Beneficiary and shall be sufficient as a financing statement. All or part of the premises is or is to become fixtures on the real estate constituting a portion of the premises, but this slatement shall not impair or limit the effectiveness of this document as a security agreement or financing statement for other purpose•, and this Deed of Trus! shall constitute a fixture financing statement and, as such, shall be filed for record in the real estate records of the county in which the land covered hereby is located. Trustors shall not change Trustors name without the prior express written consent of Beneficiary. The name of the record owner of the land covered hereby is the party or parties defined herein as Trustors.

(e) Trustors agree that, except for the security interest granted hereby in the Collateral, Trustors are the owners of the Collateral free and clear of any adverse claim, security interest or encumbrance, and Trustors shall defend the Collateral against all claims and demands of any person at any time claiming the same or any interest therein. Trustors have not heretofore signed any financing statement and no financing statement signed by Trustors is now on file in any public office except those statements, true and correct copies of which have been delivered to Beneficiary. Except as may be permitted herein or excepl as to any purchase money, title retention or security agreement, so long as may amount remains unpaid on said indebtedness, Trustors shall not execute and there shall not be filed in any public office any such financing statement or statements affecting the Collateral other than financing statements in favor of Beneficiary hereunder.

(f) The security interest granted herein shall not be construed or deemed to constitute Beneficiary as Trustee as a trustee or mortgagee in possession of the premises so as to obligate Beneficiary or Trustee to lease the premises or attempt Io do the same, or to take any action, incur any expenses or perform or disch•lrge any obligation, duty or liability with respect to the premises or any part thereof or otherwise.

17 All rights and remedies of Beneficiary and Truslee hereunder are cumulative and not alternative, and are in addition to all rights and remedies otherwise provided by law andJor by other agreements executed in connection with the indebtedness secured herein. It is expressly agreed and understood that the exercise of any option in this. Deed of Trust by the Beneficiary shall not be considered as a waiver ofits fight to exercise any other option provided herein and the failure or the refusal to exercise any such option shall not be considered as a waiver of the option.

18 Advances under the Note shall be in accordance with the terms and provisions of the Note. Furthermore, the Note defines the term "Event of Default." Any reference to an Event of Default in this Deed of Trust shall mean an Event o fDefault as defined in the Note, which definition of an Event of Default is incorporated herein by reference.

19 At any time or from time to time, and without notice, upon written request of Beneficiary and presentation of this Deed of Trust, and without liability therefore, and without affecting the personal liability of any person for payment of the indebtedness secured hereby, and without affecting the security hereof for the full amount secured hereby on all property remaining

Page 8 of 0 050290

YE00291"


subject hereto, and without the necessity that any sum representing the value or any portion thereof of the property affected by the Trustee's action be credited on the indebtedness, and upon payment of its fees, the Trustee may (a) release and reconvey all or any part of said propert• (b) consent to the

making and recording, or either, of any map or plat of the property or any part thereof; (c)join in granting any easement thereon; (d) join in or consent to any extension agreement or any agreement subordinating th6 lien, encumbrance, or charge hereof.

20 Trustors request that a copy of any notice of Trustees' sale hereunder be mailed to it

at the address hereinabove set forth.

21 The covenants and agreements herein contained shall be joint and several and shall

inure to the benefit of and be binding upon the respective heirs, successors, assigns, and legal representatives of the parties hereto. Whenever used, the singular number shall include the plural, the plural the singular, and the use of any gender shall be applicable to all genders.

THE. STATE OF ARIZONA

County of Maricopa

Subscribed, sworn to and acknowledged before me by .2.• day of_/•" • ,2006.

Notary My Commission Expires:

,•od-• ¢'-

C/c•-d' • _,this

S Wr**:dman.Ck2207502 M•hloat•Other•DOT-Elazar2 doe

Page 9 of 10

050291

YE00292


subject hereto, and without the necessity that any sum representing the value or any portion thereof of the property affected by the Trustee's action be credited on the indebtedness, and upon payment of its fees, the Trustee may (a) release and reconvey all or any part of said property; (b) consent to the making and recording, or either, of any map or plat of the property or any part thereof; (e) join in granting any easement thereon; (d)join in or consent to any extension agreement or any agreement subordinating the lien, encumbrance, or charge hereof.

20 Trustors request that a copy of any notice of Trustees' sale hereunder be mailed to it at the address hereinabove set forth.

21 The covenants and agreements herein contained shall be joint and several and shall inure to the benefit of and be binding upon the respective heirs, successors, assigns, and legal representatives of the parties hereto. Whenever used, the singular number shall include the plural, the plural the singular, and the use of any gender shall be applicable to all genders.

Yariv EI •.ar

THE STATE OF ARIZONA

County of Maricopa

Subscribed, sworn to and acknowledged before me by 2•, day of_ /•fl'• ,2006. /

My Commission Expires:

,this

S Wt,•:dman Ck2207502 Meshk•ta•Olher•DOT-Elazar2.do•:

Page 9 of 10 050292

YE00293


EXHIBIT A

LEGAL DESCRIPTION

Lot Thirty (30), VIA DE CABALLOS UNIT TWO, according to Book 38 of Maps, page 7, records of Mm-icopa County, Arizona.

Page 10 of 10

050293

YE00294



RECORDING REQUESTED BY Transnation Title Insurance Compaay AND WHEN RECORDED MAIL TO:

YARIV ELAZAR 6035 EAST DELEOA AVE SCOTTSDALE, AZ 85254

ESCROW NO.: 01516313 265 DS6

SPACE ABOVE THIS LINE FOR KECORDER'S USE

DEED OF FULL RELEASE AND RECONVEYANCE (BENEFICIARY)

The undersigned, behzg the present Bcneficiexy under that certain Deed of Trust executed byYariv Elazar, Tru•to•(5), to Transnation Title Insurance Company Trustee, for the benefit of Eliani, LLC, an Arizona limited liability Company, Beneficiary, dated March 13, 2006 ,and recorded March 15, 2006, as Instrument No. 2006-0351340, of Official Records in the Office of the County Recorder of Maricopa County, State of Arizona.

NOW, THEREFORE, pursuant to the provisions of Arizona Revised Statutes 33-707A, •,hich make it unnecessary for the Trustee to join in this document, the Beneficiary under said Deed of Trust does hereby release and reconvey, without covenant or warranty, express or implied, unto the parties legally entitled thereto all right, title and interest which was hereto[ore acquired by said Trustee under said D•d of Trust, for the benefit of the Beneficiary.

Dated: January 19, 2007 Eliani, LLC, an Arizona limited liability company

By Farid Meshkatai It's Manager

•-'• Beneficiary

•y Anita Meshkatai "-'•'•:' It's Manager Beneficiary

State of Arizona } County of Maricopa SS:

authorized capacity (ies)

il• DAW• C. SIDDOWAV [I

On Jalltlaly...._2•O.007, before me personally appeared Farid Meshkatai,as manager and Anita Meshkatai, as mana•zer of Eliani, LLC, an Arizona limited liability company, whose identity was proved to me on the basis of satisfa, ctory evidence to be the person whose name is subscribed to this document and who acknowledged that he/she signed the above/a•l•ched document in his or her

:,'/ ... ,..: /. ,/i :i'i ,, : : :; ,:;/..

,, •: ",.. !', i..•_/ N°r•TPubli• "i" /;/,/-'-/'.

-; Commission Expires:

403 ELAZAR_00028 Case 2:03-cv-01222-RCB Document 191-6 Filed 07/01/2008 Page 75 of 82

Exhibit" 404


Unofficial Document-"

do • Schenk P.C. 4742 North 24* • Suite ]00 Phoenix, Atim• 85016

STATE OF ARIZONA )

Coun• of Mm'i•x•

as a •, • Elia•i, L.LC., m Arir•m limil•! I•biJity oom•y.

My Cx•mmi.• Notary Public


20060926340

STATE OF A•Z, ONA )

Co•y o•• )



4O8 .o. YE00424


CERTIFICATE OF SERVICE

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

I declare that I am over the age of eighteen (18) and not a party to this action. My business address is 4640 Admiralty Way, Suite 850, Marina del Rey, California, 90292.

On July 1, 2008, I served the following document(s):

DECLARATION OF JANICE M. KROLL FILED IN SUPPORT OF FIDELITY'S MOTION FOR AN ORDER TO SHOW CAUSE RE: CIVIL CONTEMPT AGAINST FARID MESHKATAI, ANITA MESHKATAI, THE KRAMER INSURANCE TRUST, DANIEL CAMPBELL, AND ALLEN

HYMAN

on the interested parties in this action as indicated below or on the attached service list, together with this declaration, as follows:

Michael R. Walker Mark C. Hudson Schian Walker, P.L.C. 3550 N. Central Ave., #1700 Phoenix, AZ 85012-2115 Tel: (602) 277-1501 Fax: (602) 297- 9633 Email: [email protected]

Attorneys for Defendants and Judgment Debtors Colin H. Friedman and Hedy Kramer Friedman

(X) (By E-Mail) I caused the above-referenced document(s) to be transmitted by e- mail transmission to the interested parties at the appropriate e-mail addresses as listed above or on the attached service list. I did not receive, with a reasonable time after the transmission, any electronic message or other indication that the transmission was unsuccessful. A true and correct copy of the e-mail printout showing the date and time in which it was sent, is attached hereto and incorporated herein by this reference.

(X) (Federal) ! declare that I am employed in the office of a member of the bar of this court at whose direction the service was made.

I declare under penalty of perjury that foregoing is true and correct.

Executed on July 1, 2008, at Marina del Re.y,xCalifornia.

/¢/' N•tol• Snyder

Declaration ofJanice M. Kroll Case No.: 03 1222 PHX RCB


10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

CERTIFICATE OF SERVICE

I declare that I am over the age of eighteen (18) and not a party to this action. My business address is 4640 Admiralty Way, Suite 850, Marina del Rey, California, 90292.

On July 1, 2008, I served the following document(s)"

DECLARATION OF JANICE M. KROLL FILED IN SUPPORT OF FIDELITY'S MOTION FOR AN ORDER TO SHOW CAUSE RE: CIVIL CONTEMPT AGAINST FARID MESHKATAI, ANITA MESHKATAI, THE KRAMER INSURANCE TRUST, DANIEL CAMPBELL, AND ALLEN

HYMAN

on the interested parties in this action as indicated below or on the attached service list, together with a copy of this declaration, as follows:

Farid Meshkatai Anita Kramer Meshkatai 9332 N. 71 st St. Paradise Valley, AZ 85253

Defendants and Judgment Debtors Pro Se

(X) (By Overnight Delivery) I deposited in a box or other facility regularly maintained by FedEx or Overnite Express, an express service carrier, or delivered to a courier or driver authorized by said express carrier to receive documents, a copy of the above named document(s).

(X) (Federal) I declare that I am employed in the office of a member of the bar of this court at whose direction the service was made.

I declare under penalty of perjury that foregoing is true and correct.

Executed °n July 1, 2008, at Marina del R•• •••L y Nfiom'f Snyder

Declaration ofJanice M. Kroll Case No.: 03 1222 PHX RCB


Date post:	05-Jun-2020
Category:	Documents
Upload:	others
View:	0 times
Download:	0 times