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HomeMy WebLinkAbout875742 8 5 FUTURE ~VANCES O?EN E~ MORTGAGE, SEC~TY AG~EMENT, ~' ASSIG~ENT OF LEASES A~ ?~NTS, F~ANC~G STATEMENT A~ FIXT~E FIL~G t, BY __P GE scH~I~ OmFmLD SERVICES, ~C. Mortgagor, TO GENERAL ELECTRIC CAPITAL CORPORATION, as Agent and Mortgagee, Relating to Premises in: LaBarge, Wyoming DATED: As o£ A_4~ust 30 , 2001 "THIS INSTRUMENT SECURES, AMONG OTHER INDEBTEDNESS, CERTAIN ADVANCES AND ADVANCES 7INA PRINCIPAL AMOUNT OUTSTANDING WHICH SHALL NOT AT ANY ONE TI1V(E EXCEED $30,000,000, PLUS INTEREST THEREON AND ANY AND ALL DISBURSEMENT MADE FOR THE PAYMENT OF TAXES, SPECIAL ASSESSMENTS OR Eti'SURANCE ON THE MORTGAGED PROPERTY, WITH INTEREST ON SUCH DISBURSiEMENTS. PART OF THE SECURED INDEBTEDNESS INCLUDES A REVOLVING CR/[~!;DIT INDEBTEDNESS IN A PRINCIPAL AMOUNT OUTSTANDING WHICH SHALL NOT AT ANY ONE TIME EXCEED $30,000,000 AND THE PRINCIPAL INDEBTEDNESS OUTSTANDING AND UNPAID THEREON AND SECURED BY THIS INSTRUMJ?.NT MAY DECREASE OR INCREASE FROM TIME TO TIME. SE~:.URES PAYMENT OF FUTURE ADVANCES." "THIS,, INSTRUMENT ALSO ~'~ "THE MORTGAGED PROPERT~Ir ALSO INCLUDES GOODS (THE "FIXTURES") WHICH ARE OR ARE TO BECOME FD(TURES RELATED TO THE LANDS DESCRIBED IN EXHIBIT A ATTACHED HERETO, AND THIS FINANCING STATEMENT IS TO BE FILED FOR RECORD, AMONG. OTttER PLACES, IN THE REAL ESTATE RECORDS. A DESCRIPTION OF THE FIXTURES BY TYPE IS CONTAINED ON PAGES --- AND --- OF THIS INSTRUMENT. CH_DOCS\323661.6 [W97] "THE MORTGAGOR AND NAI~IilED IN THIS INSTRUMENT IS THE OWNER OF A RECORD INTEREST IN THE REAL ESTATE CONCERNED." '.'THIS MORTGAGE ALSO COViERS PROCEEDS OF THE MORTGAGED PROPERTY" "THIS INSTRUMENT CONTAINS AFTER-ACQUIRED PROPERTY PROVISIONS." FOR PURPOSES OF FILING THiS INSTRUMENT AS A FINANCING STATEMENT, THE MAILING ADDRESSES OF THE. MORTGAGOR AND DEBTOR AND OF THE MORTGAGE AND SECURED PART ARE AS FOLLOWS: M~RTGAGOR AND DEBTOR: schmid Oilfield Services, Inc. .! MORT zJAGEE AND SECURED PARTY: General :'!:!,tectric Capital Corporation, as Agent ~' 10 South LaSalle Street Suite 2700 Chicago, Illinois 60603 ATTENTION OF RECORDING OFFICER: This instrument is a mortgage of both real and personal property and is, among otilher things, a Security Agreement and Financing Statement under the Uniform Commercial Cc,,de. This instrument creates a lien on rights in or relating to the lands of the Mortgagor and Debtor which are described in Exhibit A hereto. This instrument was prepared outside of the State of Wyoming by and after recording should be returned to Latham & Watkins i Sears Tower, Suite 5800 ': Chicago, Illinois 60606 Attev.?fion: Annette Rivera-Zayas, Esq. CH_DOCS\323661.6 [W97] FUTURE ADVANCES OPEN END MORTGAGE, SECURITY AGREEMENT, ASSIGNMENT OF LEASES AND RENTS, FINANCING STATEMENT AND FIXTURE FILING~ THIS FUTURE ;ADVANCE OPEN END MORTGAGE, SECURITY AGREEMENT, ASSIGNMENT OF LEASES AND RENTS, FINANCING STATEMENT AND FIXTURE FILING ("MOrtgage'') is made as of /kugust 30 2001, by SCHMID OILFIELD SERVICES, INC., a ~.!;Vyoming corporation with its principal office at 333 North Main, LaBarge, Wyoming 83123 ("Mortgagor"), to GENERAL ELECTRIC CAPITAL CORPORATION, a Delaware corr.!oration, with an office at 10 South LaSalle Street, Suite 2700, Chicago, Illinois 60603, as mortgagee, assignee and secured party, in its capacity as agent on behalf of itself as lender and for.', the Lenders (as defined in the Credit Agreement described below) (together with any successors or assigns in such capacity, the "Agent" or "Mortgagee"). I. RECITALS WHEREAS, Mortgagor is the owner and holder of fee simple title in and to all of the real estate located in the County of Lincoln and State of Wyoming (the "State"), more fully described in Exhibit A attached hereto (the "Premises"), which Premises form a portion of the Property described below; WHEREAS, one Cir more advances of credit have been or will be made to Mortgagor and its affiliates, GANE Production Service, Inc., a Wyoming corporation, Busha Enterprises Inc., a Colorado ¢ort':ioration, and H.B. & R.,.. Inc., a Montana corporation (each individually a "Borrower," and .,collectively, the "Borrowers") pursuant that certain Credit Agreement by and among eaeh.~of the financial institutions named therein, the Agent, the Borrowers, the credit parties nam~:d therein (as the same may be amended, restated, modified or otherwise supplemented and in e:!'t'ect from time to time, hereinafter the "Credit Agreement") under which Lenders agreed to :make available to Borrowers certain advances of credit (the "Advances"), which Advances arei in the form of: (i) term Advances to Borrowers in the aggregate principal amount of FOURTEEN MILLION ar,,~l No/100 Dollars ($14,000,000) ("Term Loan"); (ii) term Advan.::es to Borrowers in the aggregate principal amount of EIGHT MILLION FIVE HUNDRED THOUSAND and No/100 Dollars ($8,500,000) ("Acquisition Term Loan"):; (iii) revolving credit Advances to Borrowers in the aggregate principal amount not to exceed at any time SEVEN MILLION FIVE HUNDRED THOUSAND and No/100 Dollars ($7,500,000) (the "Revolving Advances"); and CH_DOCSk323661.6 [W97] WHEREAS, Mortgagor wishes to provide further assurance and security to the Agent and the Lenders and as a Condition to the Agent and the Lenders executing the Credit Agreement, the Agent and the Len3ers are requiring that Mortgagor grant to the Agent, for the benefit of the Lenders, a security ~ interest in and a first mortgage lien upon the Property (as hereinafter defined), subject to the Permitted Encumbrances (as such term is defined in the Credit Agreement), to secure all of Mortgagor's obligations under the Credit Agreement, this Mortgage and the Loan Documents (as such term is defined in the Credit Agreement). All capitalized terms used herein but not defined .~t.erein shall have the meanings ascribed to them in the Credit Agreement. II. THE GRANT NOW, THEREFOR;5, in order to secure the payment of the Obligations ~nd the performance of all terms, covenant!!, conditions, provisions, agreements and liabilities contained in the Credit Agreement, this M~:~rtgage and in the other Loan Documents that may now or hereafter become owing from Mortgagor to Mortgagee and the Lenders (the "Secured Indebtedness"), and in consideration of Ten and No/100 Dollars ($10.00) in hand paid by Mortgagee to Mortgagor, the Recitals above stated, and ~for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Mortgagor hereby GRANTS, BARGAINS, SELLS~ ASSIGNS, RELEASES, ALIENATES, TRANSFERS, WARRANTS, DEMISES, CONVEYS and MORTGAGES to Mortgagee and its successors and assigns forever, for the benefit of,the Lenders (and grants to Mortgagee and its successors and assigns forever, for the benefit of' 'the Lenders, a continuing security interest in and to) WITH POWER OF SALE, all of Mortgagor's estate, right, claim and interest in and to the Premises, together with the following described property, all of which other property is pledged primarily on a parity with the Premises and not secondarily (the Premises and the following described rights, interests, claims and property are collectively referred to as the "Property_"): (a) All buildings, structures and other improvements of every kind and description now or herea:ii~er erected, situated, or placed upon the Premises (the "Improvements"); (b) All claims, demands, rights,, title and interest of Mortgagor, whether now owned or hereafter acquired, including without limitation, any after acquired title, franchise, license, remainder or reversion, in and to any and all (i) land or vaults lying within the right-of-way of any street, avenue, way, passage, highway, or alley, open or proposed, vacated or otherwise, adjoining the Premises, (ii) alleys, sidewalks, streets, ~ avenues, strips and gores of' land belonging, adjacent or pertaining to the Premises or the Improvements, (iii) storm ~.md sanitary sewer, water, gas, electric, railway and telephone services relating to the P~t~mises and the Improvements, (iv) development rights, air rights, water, water rights, water stock, gas, oil, minerals, coal and other substances of any kind or character un&:rlying or relating to the Premises or any part thereof, and (v) tenements, hereditaments, ~easements, appurtenances, other rights, liberties, reservations, allowances and privileges relating to the Premises or the Improvements or in any way 2 CH_DOCS~323661.6 [W97] ~ ~ ~' ~.) now or hereafter appertaini~ri~g thereto, including homestead and any other claims at law or in equity; (c) All right, tifii'.e and interest of Mortgagor, whether now owned or hereafter acquired, in and to any' and all leases, subleases, arrangements, concessions or agreements, written or oriel, relating to the use and occupancy of the Premises or the Improvements or any 'portion thereof, now or hereafter existing or entered into (collectively "Leases"); (d) All right, title and interest of Mortgagor, whether now owned or hereafter acquired, in and to any and all rents, issues, profits, royalties, revenue, advantages, .. income, avails, claims against guarantors, all cash or security deposits, advance, rentals, deposits or payments giviin and other benefits now or hereafter derived directly or indirectly from the Prenifises and Improvements under the Leases or otherwise (collectively "Rents"), sut~ject to the right, power and authority granted to Mortgagee pursuant to Section 3.9 hereof; (e) All right, tit'.ie and interest of Mortgagor, whether now owned or hereafter acquired, in and to any .'~nd all fixtures, machinery, equipment, furniture, inventory, building supplies, appliances and other articles of personal property~located in, on or about, or used or intend~id to be used in connection with or in connection with the maintenance, repair, use~, i!:peration or enjoyment of the Premises or the Improvements, whether installed in such ai:i~vay as to become a part thereof or not, all of which are hereby declared and shall be deen:iied to be fixtures and accessions to the freehold and a part of the Improvements as betv;i'een Mortgagor and Mortgagee and all persons claiming 'by, through or under them, in~i.::luding, but not limited to (i) all building materials, supplies and equipment intende{[ for construction, reconstruction, alteration, repair or incorporation in or to the ~i?nprovements, (ii) all fixtures, machinery, equipment, apparatus or articles used or usef,..d in supplying heating, gas, electricity, air-conditioning, ventilation and water to :the Improvements, including, but not limited to, furnaces, stokers, boilers, heaters, co'olers, compressors, pumps, water tanks, fuel and storage tanks, radiators, pipes, plumbing and air ducts and vents, (iii) all fixtures, machinery, equipment, apparatus or articles used or useful in maintaining the Improvements, including, but not limited to, interior and exterior cleaning equipment, drainage, sprinkler and alarm or protection systems and devices, communication systems and computers, lawn and landscaping equipment, waste and refuse removal devices and equipment, incinerators, vermin and insect exclusion devices, and fire extinguishing apparatus and equipment, and (iv)eleva:tors, escalators, ramps, partitions, storm doors and windows, ~ window screens, shades and other coverings, signs, awnings, refrigerators, ovens, ranges, dishwashers, carpeting anti.other floor coverings, furniture and light fixtures (collectively, the "Tangible Property"); (f) All right, title and interest of Mortgagor, whether now owned or hereafter acquired, in and to any intangible property which in anY way belongs, relates or appertains to the Premises, the Improvements, the Tangible Property or any part thereof, including, but not limite~ i:o, (i)all funds held by Mortgagee in any reserve replacement 3 CH_DOCS~323661.6 [W973 238 account, deferred mainten(.hce account, or in any account established for taxes or insurance payments, (ii) aW contract, rights, claims, causes of action and similar rights, 'including, but not limited :~o, warranties, guaranties, policies of insurance, tax rebate claims, and claims for damages and other compensation as a result of any taking by condemnation, eminent domain or like proceeding, (iii) all licenses, franchises, permits, approvals, variances and entitlements, (iv) all service contracts, maintenance contracts, property management ag;~C;ements, equipment leases, and plans and specifications (including working drawings), (v) all proceeds of casualty insurance in effect with respect to the Property ("Insurance ?roceeds"), (vi) all awards, judgments, settlements and other compensation made for or' ,~;0nsequent upon the taking by condemnation, eminent domain or any like proceeding, or 5:y any proceeding or purchase in lieu thereof, of the whole or any part of the Property, in~;~luding, but not limited to, awards and compensation resulting from a change of grade of.streets and awards and compensation for severance damages ("Awards"), and (vii) a!.l tradenames, trademarks, servicemarks, loges, goodwill, accounts, investment property, chattel paper and general intangibles as defined in the UnifOrm Commercial Code as enacted in the State of Wyoming (hereinafter referred to as the "UCC") (collectively, the "Intangible Property"); (g) All right, t'i~L3e and interest of Mortgagor in and to all extensions, improvements, betterment~i,,,?enewals, .substitutes and replacements of, and all additions and appurtenances to, az]y of the foregoing hereafter acquired by, or released to, Mortgagor or constructed, assembled or placed on the Premises and all conversions of the security constituted therebyl immediately upon such acquisition, release, construction, assemblage, placement or. conversion, as the case may be, which in each such case, without any further mortgage, conveyance, assignment or other act by Mortgagor, shall become subject to the lien of this Mortgage as fully and completely, and with the same effect, as though now owned by Mortgagor and specifically described herein; and (h) Ail proceeds of any of the foregoing, including, but not limited to, all property acquired with cash proceeds of any of the foregoing or proceeds thereof. TO HAVE AND TO HOLD said Property hereby mortgaged and conveyed or so intended, unto th~ Mortgagee and' its successors and assigns forever, for the benefit of the Lenders, for the uses and purposes., l~erein set forth.. Mortgagor hereby .covenants with Mortgagee: (i) that at the execution and delivery hereof, Mortgagor owns .the Property in fee simple and has good and marketable title thereto, (ii) that the Property is fre~.' from all encumbrances and exceptions to title (and any claim of any,other person) other than Pe:mitted Encumbrances, (iii) that it has good and lawful fight to sell, mortgage' and convey the P~operty, and (iv)except for the Permitted Encumbrances, that Mortgagor and its successors and assigns shall forever warrant and defend the Property against all claims and demands whatsoever. If and when Mortg~tgor has paid all of the Secured Indebtedness and has strictly performed and observed all of ti:re agreements, terms, conditions, provisions and warranties contained herein and in the Credit .Agreement and in all of the ~other Loan Documents and there 4 CH_DOCS\323661.6 [W97] exist no commitments of the Lenders under the Loan Documents which could give rise to Secured Indebtedness, then this Mgrtgage and the estate, right and interest of Mortgagee in and to the Property shall cease and shall be released at the cost of Mortgagor. GENERAL AGREEMENTS 3.1 Payment of Indebtedness. Mortgagor shall pay promptly and when due all amounts owing by Mortgagor in ":respect of the Obligations at the times and in the manner provided in the Credit Agreement, the Notes, this Mortgage, or any of the other Loan Documents. The Advances are evidenced by the Notes, each of the Notes bears interest as provided in the Credit Agreement, and the final maturities of the Notes are at various dates, but in any e. vent on or before August 30,2006. The Notes provide for a variable rate of interest. Mortgagor shall also perform or cause to be perfoi:rned punctually' all other Obligations at the times and in the manner provided in the Loan Documents. 3.2 hnpositions.. ExceP~ as otherwise permitted under Section 5.2(b) of the Credit Agreement, Mortgagor shall payi'immediately, when first due and owing, all general taxes, special taxes, special assessment~i'i water charges, sewer charges, and any other charges, fees, taxes, claims, levies, expenses, liei"~s and assessments, ordinary or extraordinary, governmental or nongovernmental, statutory or oth~.!rwise (all of the foregoing being herein collectively referred to as "Impositions"), that may be asSi:irted against the Property or any part thereof or interest therein. 3.3 Payment of Impositions and Other Claims by Mortgagee. Mortgagee is hereby authorized to make or advance, in. the place and stead of Mortgagor, unless such matter is being properly contested by Mortgagor in accordance with Section 5.2(b) of the Credit Agreement, any payment relating to Impositions Which Mortgagor has failed to make when due. Mortgagee may do so according to any bill, statement, or estimate procured from the appropriate public office without inquiry into the accura%.' or the validity of any Impositions, lien, sale, forfeiture, or related title or claim. Mortgagee ii..', further authorized to make or advance, in place of Mortgagor, unless such matter is being properly contested by Mortgagor in accordance with Section 5.2(b) of the Credit Agreement, any payment relating to any claim of adverse title, lien or encumbrance, asserted or threatened against the', Property or any part thereof or interest therein, whenever, in Mortgagee's judgment and discretion, such payment seems necessary or desirable to protect the .. full security intended to be created by this Mortgage. All such advances authorized by this Section 3.3 shall constitute Secured Indebtedness and shall be repayable by Mortgagor upon demand with interest at the Default Rate for the Loan bearing the highest rate of interest. ,, 3.4 Condemnation ant. Eminent Domain. Mortgagor shall give Mortgagee prompt notice of all proceedings, institutzd or threatened, seeking condemnation or a talcing by eminent domain or like process (herein collectively called "Taking"), of all or any part of the Property or affecting any related easement or appurtenance (including severance of, consequential damage to, or change in grade of streets), anti'shall deliver to Mortgagee copies of any and all papers served in connection with any such proceeding. Mortgagee (or, after entry of decree of foreclosure, the purchaser at the foreclosure sale oi!: decree creditor, as the case may be) is hereby authorized at its option to participate in such proc::eding and control the same and to be represented therein by 5 CH_DOCS\323661.6 [W97] counsel of its own choice, and .Mortgagor will deliver, or cause to be delivered to Mortgagee such instruments as may be requested by it from time to time to permit such participation or control. Mortgagor hereby'assigns., transfers and sets over unto Mortgagee any and all Awards resulting from any Taking. Mortgagee is hereby authorized to collect and receive from the condemnation authorities all Awards and is further authorized to give appropriate receipts and acquittances therefor. Any Award, less the amount of any expenses incurred in litigating, arbitrating, compromising, or setding any claim arising out of the subject Taking, shall be applied in the same manner as if they were Insurance Proceeds in accordance with Section 5.4 of the Credit Agreement and in accordance with SeCtion 3.5 hereof. 3.5 Restoration. In t e eyent there shall be an insured casualty or a Taking affecting the Property, and Mortgagee is required under Section 5.4 of the Credit Agreement and/or Section 3.4 hereof to cause the ap~)~icable Insurance Proceeds or Award to be applied to restore, repair or replace the Property or ~any portion thereof ("Restoration"), Mortgagee shall disburse such Insurance Proceeds or Aw!~rd in accordance with disbursement procedures reasonably acceptable to Mortgagee, including, g, without limitation, such procedures as are customarily utilized by construction lenders to :.insure the lien free completion of construction projects. No such Insurance Proceeds or Award shall be disbursed unless the following conditions are satisfied promptly upon the occurri:nce of the insured casualty or Taking (but in no event later than sixty (60) days following such~:0ccurrence): (a) Mortgagee sl;~all have received and approved complete plans and specifications for the Restoration; (b) Mortgagee sl~all have received and approved a construction contract for the work of Restoration with a contractor acceptable to Mortgagee; (c) Mortgagee ~hall be reasonably satisfied that the Restoration is permitted by all applicable legal requ'irements and that all necessary permits and approvals have been obtained; ·: (d) Mortgagee ~':hall be reasonably satisfied that the amount of the Insurance Proceeds or Award actually received and available for the Restoration, plus Borrowing Availability (exclusive of the temporary application of Insurance Proceeds or an Award to the Revolving Loan and taldng into account the ordinary working capital needs of Mortgagor) are sufficient to pay all costs of the Restoration (as evidenced by a cost estimate prepared by an arclqtect or engineer acceptable to Mortgagee); and (e) Mortgagee s?~all, be reasonably satisfied that the value of the Property, ~upon completion of the Res:~toration, will equal or exceed the value immediately prior to the applicable insured casua}ty or Taking. 3.6 Maintenance of Prol2.e.rty. Mortgagor shall: (a) promptly rel:air, restore, replace or rebuild any material portion of the Property which may become damaged, destroyed, altered, removed, severed, or 6 CH_DOCS\323661.6 [W97] demolished, whether or no'~: Insurance Proceeds or Awards are available or sufficient for the purpose, with replace~nents at least equal in quality and condition as previously existed, free from any secu!'ity interest in, encumbrances on or reservation of title thereto except the lien of this Mortgage and Permitted Encumbrances; (b) keep the Priiperty in good condition and repair, without waste,, and free from mechanics', materialmen's or like liens or claims except for Permitted Encumbrances; and (c) not make any material alterations in the Property (other than additions and improvements thereto), .except as required by law or municipal ordinance or in the ordinary course of business:? 3.7 Prohibited Liens an3 Transfers. .. (a) Liens. Exl;!:ept as otherwise permitted in Section 6.7 of the Credit Agreement, Mortgagor sh~i.'.[1 not create, suffer, or permit to be created or filed any Lien superior or inferior .to the .!.ten created by this Mortgage against all or any portion of the Property or any interest therein. , (b) Transfers. !;Except as otherwise permitted in Section 6.8 of the Credit Agreement, Mortgagor ma? not sell, lease or convey all .or any part of the Property or any interest therein. 3.8 Change in Tax Laws. If, by the laws of the United States of America, or of any state, county or municipal governmental subdivision having jurisdiction over Mortgagee, Mortgagor, or the Premises, any tax is imposed or becomes due in respect of the issuance of the Notes or the recording of this Mo:;~tgage, Mortgagee shall pay such tax in the manner required by such law. In the event that any law, statute, rule, regulation or court order has the effect of (a) deducting from the value of the Premises, for the purpose of taxation, the amount of any lien thereon, (b) imposing upon Mort~sagee the payment of all or any part of the taxes, assessments, , charges or liens required to be pair_i by Mortgagor, or (c) changing in any way the laws relating to the taxation of mortgages or debts secured by mortgages or the interest of Mortgagee in the Property, or the manner of collection of taxes, so as to adversely affect this Mortgage, the Secured Indebtedness or Mortgagee; then Mortgagor, UPon demand by Mortgagee, shall pay such taxes, assessments, charges, or 5ens or reimburse Mortgagee therefor. If, in the reasonable opinion of counsel for Mortgagee, it would be unlawful to require Mortgagor to make such payment or the making of such payment might result in the imposition of interest beyond the maximum amount permitted by ia~, then Mortgagee may elect, to the extent permitted by law, by notice in writing given to Mor;gagor, to declare all of the Secured Indebtedness to become due and payable within one hundred :{wenty (120) days after the giving of such notice. Nothing contained in this Section 3.8 shall be construed as obligating Mortgagor to pay Mortgagee's federal or state income or corporate franchise tax, excepting only that which may be levied against the income of Mortgagee as a complete or partial substitute for taxes required to be paid by Mortgagor. 7 CH_DOCSL323661.6 [W97] 3.9 Assignment of Ren!i~. (a) Absolute Pre'Sent Assignment. All right, title, and interest of Mortgagor in and to all Leases are herebT'absolutely, presently and unconditionally transferred and assigned simultaneously h(:~r, ewith to Mortgagee, for the benefit of Mortgagee and the Lenders. Mortgagor agrees :.and stipulates that the absolute, present and unconditional assignment of the Rents her~in to Mortgagee (for the benefit of Mortgagee and the Lenders) perfects and mak¢~, effective, as of the date upon which this assignment is delivered, Mortgagee's interest (on behalf of the Lenders) in the Rents. Such absolute assignment to Mortgagee (f~r the benefit of the Lenders) is independent of Mortgagee's actual or constructive poss,~i~slon of the Property (for the benefit of the Lenders). Mortgagor agrees and stipulates that Mortgagor shall hold any and all Rents, whether now due, past due, or to becom~ due, including all prepaid rems and security deposits, in trust, for application to the Secured Indebtedness and for the preservation and operation of the Property. ' (b) N° Liability. :It is understood and agreed that neither the foregoing assignment of Rents.to Moffgagee (for the benefit of the Lenders), nor the exercise by Mortgagee of any of its righlis or remedies under this Mortgage, shall impose upon Mortgagee any of the duties. :and obligations of a mortgagee-in-possessiOn or otherwise make Mortgagee responsible or liable in any manner with respect to the Property or the use, occupancy, enjoyment' or operation of all or any portion thereof, unless and until Mortgagee, in person or by agent, assumes actual possession thereof. Nor shall appointment of a receiver lbr the Property by any court at the request of Mortgagee or by agreement with Mortgagor, or the entering into possession of the Property or any part thereof by such receiver, be deemed to make Mortgagee a mortgagee-in-possession or otherwise responsible or li~.~ble in any manner with respect to the Property or the use, occupangy, enjoyment or operation of all or any portion thereof. (c) Mort~a~or'i~ License. Notwithstanding the foregoing absolute assignment of Rents, Mortgagee confers upon Mortgagor a license to collect and retain the Rents as they become due and payab~.e; provided, however, that Mortgagee may at any time after the occurrence of an Event ~}f Default and without regard to the value of the security, in Mortgagee's sole discretion(i~nd without notice to Mortgagor, revoke said license and may collect and retain any m: all of the Rents, without taking possession of all or any part of the Property. Upon such::/'evocation of Mortgagor's license, Mortgagor shall have no interest whatsoever, legal o~ economic, in the Rents or other benefits of the Property assigned hereunder, and all tach Rents and other benefits shall be received and held by Mortgagor in constructive u.ust for Mortgagee and delivered promptly in kind to Mortgagee, or to a court-appointed receiver for the Property, without the necessity for further notice to, or demand upon, Mortgagor. Additionally, upon an Event of Default, upon Mortgagee's demand therefor, Mortgagor shall immediately turn over to Mortgagee (for the benefit of the Lenders), or to a receiver appointed by the court, all of the Rents then held by Mortgagor, together with any interest accumulated thereupon. Mortgagor agrees that in the event Mortgagee seeks to trace rents and revenues assigned hereunder for a period commencing upon an Event of Default and continuing so long as the Event of 8 CIt_DOCSk323661.6 [W97] ('...~ ~' ~.~. ~ .:~ ,a Default continues and Mortgagor collects Rents from the Property, it shall be a conclusive cvidentiary presumption that funds held by or for the benefit of Mortgagor, its principals, or agents are R¢:ats belonging to Mortgagee under the terms of the Mortgage in an amount equal to the a.:~gregate of actual gross receiPts of Rents received by Mortgagor during such peri.ad. (d) Maintenanc4~ of Leases. Without the prior written consent of Mortgagee, Mortgagor shall not: (i) ac'gept prepayments of Rent exceeding one month under any Lease, (ii) take any action xmder or with respect to any Lease that would materially decrease either the obhgatr:!ns of the lessee thereunder or the rights or remedies of the lessor thereunder, (iii) modi. fy or amend in any material respect any Lease or, except where the lessee is in defarit, cancel or terminate the same or accept a surrender of the leased premises, (iv) consdi?t to the assignment of the whole or any portion of any ]essee's interest under any Lease, (¥) create or permit any Lien that, upon foreclosure, would be superior to any Lease, unless the lienor or encumbrancer provides the lessee with a nondisturbance agrcemcnt,:or (vi) in any other manner impair Mortgagec's or the Lenders' rights and:interns!:, with respect to the Rents. (e) Attornmen(~ Unless otherwise approved in writing by Mortgagee, each existing Lease of a portion?'0f the Property shall be prior to the Lien of this Mortgage. As for any leases entered into i:!by Mortgagor after the date hereof, such Leases shall contain a provision satisfactory to M:!;~rtgagee that in the event of foreclosure hereunder, such Lease, at the sole and excl,¢sive option of thc purchaser at any sale, shall not be terminated and the tenant thereunder shall attom to such purchaser and, if requested to do so, shall enter into a new Lease for the balance of the term of such Lease then remaining upon the same terms and conditions. (f) Perforrnance by Mortgagee. If Mortgagor, as lessor under any Lease, shall neglect or refuse to perfom~, observe and keep all of the covenants, provisions and agreements contained in su'ch Lease, then Mortgagee may (but shall not be obligated to) perform and comply with hny'such Lease covenants, agreements and provisions. All reasonable costs and expenses incurred by Mortgagee in complying with such covenants, agreements, and provisions shall constitute Secured Indebtedness and shall be payable upon demand with interest !payable at the Default Rate for the Loan bearing the highest .. rate of interest. (g) Indemnity. Mortgagor shall and does hereby agree, except to the extent of Mortgagee's gross negligence or willful misconduct, to indemnify and hold Mortgagee ~, harmless of and from any and all liability, loss or damage which it may or might incur under any Lease or under or by reason of its assignment hereunder to Mortgagee (for the benefit of the Lenders) and :of and from any and all claims and demands whatsoever which may be asserted agai'nst it by reason of alleged obligations or undertakings on its part to perform or discharge3 any of the terms, covenants or agreements contained in such Lease. Should Mortgagee ':.~ncur any such liability, loss or damage' under any Lease or under or by reason of its ~.Ssignment to Mortgagee, or in the defense of any claims or demands, ihe amount thereaf, including costs, expenses and reasonable attorneys' fees, CH_DOCS\323661.6 [W97] shall constitute Secured Indebtedness and shall be payable upon demand with interest payable at the Default Rateilfor the Loan bearing the highest rate of interest. Mortgagor expressly acknowledges that the foregoing obligation of Mortgagor to indemnify and hold harmless Mortgagee includes the obligation to indemnify and hold harmless Mortgagee for Mortgagee's own ac~s and; omissions including without limitation its own negligence (except gross negligence), i(n no event, however, shall the foregoing obligation to indemnify include any obligation to indemnify prohibited by Section 30 1 121 Wyoming Statutes. 3.10 Uniform Commercml Code. (a) Security Ag3eement. This Mortgage constitutes a Security Agreem. ent as that term is used in the UCC with respect to any part of the Property which may or,might now or hereafter be or be deemed to be personal property, fixtures, or property (including all replacements thereof, additions thereto and substitutions therefore) other than real estate (collectively, the "Personal Property Collateral"). All of Mortgagor's right, title and interest in the Personal Property Collateral is hereby assigned to Mortgagee to secure the payment of the Secured Indebtedness and the performance of all Mortgagor's obligations under the Credit Agreement, this Mortgage and the other Loan Documents. (b) Remedies. ,At any time after an Event of Default has occurred and shall be continuing, Mortgagee shal.'i have the remedies of a secured party under the UCC, including without limitation the right to take immediate and exclusive possession of the Personal Property Collater:~(l or any part thereof. The remedies of Mortgagee hereunder are cumulative and the exercise of any one or more of the remedies provided for herein or under the Loan Documents :'or under the UCC shall not be construed as a waiver of any of the other remedies of the Mortgagee, including having the Personal Property Collateral deemed part of the realty u.l?on any foreclosure so long as any part of the Secured Indebtedness remains unsatisfied. (c) Financing s~:atements. Mortgagor agrees that Mortgagee may file any appropriate document in tl'~.c appropriate index as a financing statement for any of the items specified above as part of the Personal Property Collateral. Mortgagor agrees to execute and deliver financing and continuation' statements covering said Personal Property Collateral from tin:ie to time and in such form as Mortgagee may require to perfect and continue the perfection of Mortgagee's lien with respect to said Personal Property Collateral. Mortgagor shall pay all costs of filing such statements and renewals and releases thereof and shall pay all reasonable costs and expenses of any record searches for financing statements Mortgagee may reasonably require. (d) Fixture Filing. This Mortgage is intended to be a "fixture filing" within the purview of Sections 9-334 and 9-502 of the UCC with respect to the items of Property which are or may become fixtures relating to the Premises upon recording of this Mortgage in the real estate records of the proper office. The addresses of Mortgagor (Debtor) and Mortgagee (Secured Party) are set forth in Section 5.1 hereof. 10 CH_DOCS\323661.6 [W97] 3.11 No Release· WithO;~at notice and without regard to the consideration therefor, and to the existence at that time of any inferior Liens affecting the Property, Mortgagee may take any of the following actions without; in any way releasing, impairing or adversely affecting the priority of the lien of this Mortgage: (a) release any Person liable for all or any portion of the Secured Indebtedness, (b) extend [i)e time or otherwise alter the terms of payment of any portion of the Secured Indebtedness, (c) agcept additional collateral as security for all or any portion of the Secured Indebtedness, (d) alte~; substitute or release any collateral securing all or any portion of the Secured Indebtedness, (e) c ::insent to the making of any map or plat of the Premises or any portion thereof, (f) join in grantin:g any easement or creating any restriction thereon, (g) join in any subordination or other agreement affecting this Mortgage or the lien hereof, and (h) release any portion of the Property from tl;e lien of this Mortgage. 3.12 Further Assurances: Mortgagor agrees that, upon request of Mortgagee from time to time, it will, at Mortgagor's sol?, cost and expense, execute, acknowledge and deliver all such additional instruments and further!:' assurances of title and will do or cause to be done all such further acts~ and things as may r?asonably be necessary to fully effectuate the intent of this Mortgage. In the event that Mort:gagor shall fail to do any of the foregoing, Mortgagee may, in its sole discretion, do so in the name of Mortgagor, and Mortgagor hereby appoints Mortgagee as its attorney-in-factto do any of tt~e foregoing, such appointment being couple, d with an interest and irrevocable. 3.13 Legal Sta. tus, Authority and Other Matters. (a) Legal Statu;i~. Mortgagor is a corporation duly incorporated and existing in good standing under the laws of the State of Wyoming, i~s duly qualified to do business and in good standing in WYoming and has the full power and authority to own the Property and carry out its business in Wyoming. (b) Cont~nuatm~:~ of Existence. Mortgagor will maintain in good standing its existence, franchises, right~? and privileges under the laws of the State of Wyoming, as applicable, and its fight to transact business in Wyoming and, except as may be permitted by the Loan Documents and. in compliance therewith, will not dissolve, liquidate, terminate or otherwise disgbse, directly or indirectly or by operation of law, of all or substantially all of the Pro[;.~rty or change its legal structure or name. (c) Due Autho:szation. The execution, delivery and performance by the Mortgagor are within sucl~ Mortgagor's corporate powers, have been duly authorized by all necessary corporate action,, and do not contravene (i) Mortgagor's charter or by laws ~ or (ii) any law, rule, regulation (including, without limitation, Regulation X of the Board of Governors of the Federal Reserve System), order, writ, judgment, injunction, degree, determination or award or i!ny contractual restriction binding on or affecting the Mortgagor or any of its praperties, and do not result in or require the creation of any lien, security interest or other charge or encumbrance (other than pursuant hereto or pursuant to any Credit Document) ~pon or with respect to any of its properties; and, except as disclosed or permitted in the Loan Documents, the Mortgagor is not in default under any such law, rule, regulation: order, writ, judgment, injunction, decree, determination, award 11 C[ I_DOCS\32366 t .6 [W97] or restriction, the violation of which might materially adversely affect the Property or the condition, financial or othe:~Wise, operations, properties or prospects of Mortgagor. (d) Consent, AP.:provals. All consents or approvals necessary to (a) authorize the execution and delivery o'fthis Mortgage, (b) perform the obligations hereunder, and (c) secure and make subject the Property to the remedies hereunder, in each have been obtained, whether from any.: Governmental Authority or any other Person. (e) Loan Documents. Mortgagor has obtained and read the Loan Documents, and, with respect to all matters affecting or involving Mortgagor or the use and operation of the Property, hereby reaffirms each and every representation, warranty and covenant contained or made therein, and promises to perform or observe each and every Ob!igation set forth in the Loan Documents with respect thereto. Notwithstanding anything to,the contrary herein, no provisii:,n of this Mortgage is intended to nor shall it be deemed to (i) waive or reduce any of Bor[owers' or Mortgagor's representations, warranties or obligations under the Loan ~i)ocuments or (ii) provide or constitute any consent or approval to any matter requ~!ring same under the Loan Documents. (f) Right of En!:[~y. Upon reasonable notice tO Mortgagor, Mortgagor will permit Agent or Lenders, o:~ithe agents of any of them, to enter (during regular business hours) upon the Property, .~i::.iid all parts thereof, for the purpose of investigating and inspecting the condition an~.!I operation thereof. EVENT'OF DEFAULT AND REMEDIES 4.1 Events of Default al:~d Acceleration. The occurrence of an "Event of Default," as such term is defined in the Credit Agreement, shall constitute an "Event of Default" under this Mortgage. If an Event of Default :~.hall have occurred, Mortgagee may (and at the written request of the Requisite Lenders shall), by notice to Mortgagor declare all or any portion of the Secured Indebtedness to be immediately due and payable, whereupon the same shall become immediately due and payable, and without presentment, protest, demand or other notice of any kind, all of which are hereby expressly waived by Mortgagor; provided, however, that Mortgagor acknowledges that as to certain Events of Default, as set forth in the Credit Agreement, the Secured Indebtedness automatically shall become and be immediately due and payable, without any declaration or other act on the part of Mortgagee or the Lenders. No omission on the part of Mortgagee to exercise such option when entitled to do so shall be construed as a waiver of such right. ~4.2 Remedies. When alii. or any part of the Secured Indebtedness shall become due, whether by acceleration or otherwise, Mortgagee shall have the right to foreclose the lien of this Mortgage for such Secured Indebtedness or part thereof by judicial action Or by advertisement and sale of the real property inclu~ed, in the Property as provided by statute (the POWER OF SALE provided for by statute, here~Oy expressly granted to Mortgagee by Mortgagor), and/or exercise any right, power or reme6.1,~ provided in this mortgage or any of the other Loan Documents It is further agreed th,,:i:iif default be made in the payment of any part of the Secured CH_DOCSX323661.6 [W97] '*LI~',:,::'? r~' ~ ~, '~ ,, ~debtedness, as alternative to the ~ight of foreclosure for the full Secured ~debtedness so in default, as if under a full foreclosm~e, and without declaring the entire Secured ~debtedness due (such proceeding being hereinafte(?efe~ed to as a "partial foreclosure"), and provided that if foreclosure sale is made because ol?.default of a part of the Secured ~debtedness, such sale may be made subject to the continuing ~ien.of this Mo~gage for the unmatured Pa~ of the Secured Indebtedness. It is fu~her agreed fhat .such sale pursuant to a partial foreclosure shall not in any ma~er affect the umatured pa~ 0fthe Secured ~debtedness, but as to sUch unmatured part, the lien hereof shall remain in ~11 for~e and effect just as though no foreclosure sale had been made under the provisions of this Section. NOtwithstanding the filing of any pa~ial foreclosure or entry of a decree of sale in co~ecfi:on therewith, Mortgagee may elect at any time prior to a foreclosure sale pursuant to such decree to discontinue such pa~ial foreclosure and to accelerate the entire Secured ~debtedness by ~reason of any uncured Event of Default and proceed ~ith full foreclosure proceedings. It is fa~lSer a~eed that several foreclosure sales may be made p~rsuant to pa~ial foreclosures without exh~.usting the right of full or pa~ial foreclosure sale for any unmatured pa~ of the Secured ~&~btedness. In the event of a foreclosure sale, Mo~gagee is hereby authorized, without the c°~ent of Mo~gagor, to assign any and all insurance policies to the purchaser at such sale, 0r to take such other steps,as Mortgagee may deem advisable to cause the interest of such purchaser to be protected by any of such insurance policies. 4.3 Remedies Cumulati~ve and Non-Waiver. No remedy or right of Mortgagee hereunder or under the Notes, or any of the Loan Documents or othe~ise, or available under applicable law, shall be exclusive 0f any other right or remedy. Each such remedy or right shall be in addition to evew other remedy or right now or hereafter existing under any such document or under applicable law. No delay~ in the exercise of, or omission to exercise, any remedy or right accruing on the occu~ence of any Event of Default shall impair any such remedy or right or be construed to be a waiver of any such Event of Default or an acquiescence therein, nor shall it affect any subsequent Event of D(fault of the same or a different nature, nor shall it extend or affect any grace period. Evew re::~}edy or right may be exercised concu~ently or independently, when and as often as may be dee~,d expedient by Mortgagee. All obligations of Mo~gagor, and all rights, powers and remedies o~f Mo~gagee shall be in addition to, and not in limitation of, those provided by law or in the >,.,otes or contained in any of the Loan Documents or any other written agreement or instrument relating to any of the Secured Indebtedness or any security therefor..~. 4.4 Expenses. In any proceeding to foreclose or partially foreclose the lien of this Mo~gage or enforce any other fer:iedy of Mo~gagee with respect to the Prope~y, there shall be allowed and included, as additional indebtedness in the jud~ent or decree resulting therefrom, all expenses paid or incu~ed by ct; on behalf of Mortgagee. Such expenses shall include, but not be li~ted to: reasonable attorney's fees, appraiser's fees, outlays for documentary and expe~ evidence, steno~apher's ch~ges, publication costs, su~ey costs, and costs (which may be estimated as to items to be expended after entw of such judgment or decree) of procuring all abstracts of title, title searches and examinations, title insurance policies, and any similar data and assurances with respect to title to the Prope~y as Mo~gagee may deem reasonably necessau either to prosecute any such proceeding or to evidence to bidders at any sale pursuant to such decree the tree condition of the title to or value of the Premises or the PropelV. All expenses and 13 CH_DOCS\323661.6 [W97] fees of the foregoing nature, and ~;uch expenses and fees as may be incurred in the protection of any of the Property and the main*l:enance of the lien of this Mortgage thereon in any litigation affecting the Notes, this Mortgage, the Loan Documents or any of the Property, including bankruptcy Proceedings, or in preparation for the commencement or defense of any proceeding or threatened suit or proceeding in connection therewith, shall be due and payable by Mortgagor upon demand with interest thereon at the Default Rate for the Loan bearing the highest rate of interest and shall constitute Secured Indebtedness. 4.5 Mortgagee's Performance of Moggagor's Obligations. Following the occurrence of an Event of Default and during the continuance thereof, Mortgagee, either before or after acceleration of the Secured Indebtedness or the foreclosure of the lien hereof and during the period of redemption, if any, may~ but shall not be required to (a) make any payment or perform any act herein, in the Notes or any other Loan Document which is required of Mortgagor. in any form and manner deemed expedien~r to Mortgagee, (b) make full or partial payments of principal or interest on any permitted p~fior mortgage or encumbrance and purchase, discharge, compromise or settle any tax lien i~:r other prior lien on title or claim thereof, or redeem from any tax sale or forfeiture affecting thc Premises, or contest any Impositions, (c) make any payment necessary to obtain and maintain :Ihe insurance required under the Credit Agreement, and (d) complete construction, furnishing. .:and equipping of the Improvements upon the Premises and rent, operate and manage the Pr<~nises and such Improvements and pay operating costs and expenses, including management fi~es, of every kind and nature in connection therewith, so that the Premises and Improvements sh~ll be operational and usable for their intended purposes. All monies paid for any of the purpgses herein authorized, and all expenses paid or incurred in connection therewith, including reasonable attorneys' fees, shall become due and payable upon demand and with interest thereon at the Default Rate for the Loan bearing the highest rate of interest and shall constitute Secured Indebtedness. Mortgagee, in making any pa)anent hereby authorized: (x) for the payment e~f Impositions, may do so according to any bill or statement, without inquiry into the validity of any tax, assessment, sale, forfeiture, tax lien or title or claim thereof, (y) for the purchase, discharge, compromise or settlement of any other prior lien, may do so without inquiry as to the validity or amount of any claim or lien which may be asserted, or (z) for the completion of construction, furnishing or equipping of the Improvements or the Premises or the rental, operation or management of the Premises or the payment of operating costs and expenses thereof (including insurance premiums), may do so in such amounts and to such persons as Mortgagee may deem appropriate and may enter into such contracts therefor as Mortgagee may deem appropriate c..r may Perform the Same itself. The exercise by Mortgagee of any of the foregoing rights shall not constitute a cure or waiver of any Event of Default. 14 CH_DOCS\323661 ~6 [W97] 4.6 A_ppointment of Re:~::eiver. Following the occurrence of an Event of Default and during the continuance thereof?' Mortgagee, upon application to a court of competent jurisdiction, shall be entitled, as ii:matter of strict right without notice and without regard to the occupancy or value of any securii:~y for the Secured Indebtedness or the solvency of any party bound for its payment, to the app!;intment of a receiver to take possession of and to operate the Property and to collect and apply i!.i'he Rents. The receiver shall have all of the rights and powers r,tate of Wyoming. Mortgagor shall pay to Mortgagee upon permitted under the laws of the ' demand all reasonable expenses, '. including receiver's fees and reasonable attorneys' fees and expenses, incurred pursuant to sm::.h appointment and all such expenses shall constitute Secured Indebtedness. " 4.7 Foreclosure Sale. In the event of any foreclosure sale, the Property may be, sold in one or more parcels. Mortgagee may bid for and acquire the Property or any part thereof at 'any sale made under or by virtue of this Mortgage and, in lieu of paying cash therefor, may make settlement for the purchase price'by crediting against the purchase price all or a portion of the unpaid amounts due and owing in respect of the Secured Indebtedness. 4.8 Application of Proceeds of Foreclosure Sale. The proceeds of any foreclosure sale of the Property shall be distri?iuted and applied in the following order of priority: fir.st, to all costs and expenses incident to .~:he foreclosure proceedings, including all iuch items as are mentioned in Section 4.4 above; isecond, to all other items which may under the terms hereof constitute Secured Indebtedness a.dditional to that evidenced by the Notes, with interest thereon as provided herein or in the other:Loan Documents; third, to all principal and interest remaining unpaid on the Notes; and fough, any surplus to Mortgagor, its successors or assigns, as their rights may appear or to any other l:~arty legally entitled thereto. 4.9 Insurance Upon Fe?..eclosure. In the event of a foreclosure sale of the Property, Mortgagee is hereby authorized, withoUt the consent of Mortgagor, to assign or cause a receiver to assign any and all insurance po'l'.i~icies to the purchaser at such sale, or to take such other steps as Mortgagee may deem advisable t{i.' cause the interest of such purchaser to be protected by any of such insurance policies. In case: of an insured loss after foreclosure proceedings have been instituted, the proceeds of any insl:~rance policy or policies, if not applied in repairing, restoring, replacing or rebuilding any port::[i:~n of the Property, shall be used to pay the amount due in accordance with any decree of foreclosure that may be entered in any such proceedings, and the balance, if any, shall be paid as tk.t~, court may direct. In case of the foreclosure of this MOrtgage, the court in its judgment may provide that the judgment creditor may cause a new or additional loss clause to be attached to each of said policies making the loss thereunder payable to said 'judgment creditor; and any such ibreclosure judgment may further provide, unless .the right of rederription has been waived, that .in case of redemption under said judgment pursuant to applicable law, then, and in every such case, the redemptor may cause the preceding loss clause attached to each insurance policy to be canceled and a new loss clause to be attached thereto, making the loss thereunder payable to such redemptor. 4.10 Waiver. Mortgagor shall not apply for or avail itself of any appraisement, valuation, stay, extension, or exe:~ption laws, or any so-called "moratorium laws," now existing or hereafter enacted, in order t:~, prevent or hinder the enforcement or foreclosure of this 15 CH_DOCSX323661.6 [W97] Mortgage, and Mortgagor hereby Waives the benefit of such laws. Mortgagor, for itself and all who may claim through or under !:it, waives any and all rights to have the property and estates comprising the Property marshaled, upon any foreclosure of the Lien of this Mortgage, and agrees that any court having jurisdictio~i: to foreclose such Lien may order the Property sold in its entirety. Mortgagor further release~ and waives, to the fullest extent permitted by law, any and all rights of reinstatement and redemption provided by applicable law. 4.11 Effect of Judgment? The obtaining of any judgment by Mortgagee and any levy of any execution under any such jud,i,nnent upon the Property shall not affect in any manner or to any extent the lien of this Mortga!'~ie upon the Property or any part thereof, or any Liens, powers, rights and remedies of Mortgage~'.i'hereunder, but such liens, powers, rights and remedies shall continue unimpaired as before untii':! such judgment or levy is satisfied. 4.12 Power of Attorney ~i!Effective upon the occurrence of an Event of Default and during the continuance thereofi(.:. Mortgagor hereby irrevocably constitutes and appoints Mortgagee as Mortgagor's true an'i~l lawful attorney-in-fact to take any action with respect to the Property to preserve, protect or realize upon Mortgagee's interest therein, each at the sole risk, cost and expense of Mortgagor, b~:l for the sole benefit of Mortgagee and the Lenders. The rights and powers granted Mortgagee (for the benefit of the Lenders) by the within appointment include, but are not limited to, thi:'~right and power to: (a)'prosecute, defend, Compromise, settle or release any action relating to ~Ihe Property, (b) endorse the name of Mortgagor in favor of Mortgagee upon any and all checks or other items constituting Rents, (c) sign and file or record on behalf of Mortgagor any financing or other statement in order to perfect or protect Mortgagee's security interest, (d) enter into leases or subleases relative to all or a portion of the Property, (e) enter into any contracts or agreements relative to, and to take all action deemed necessary in connection with, the C:Onstruction of any Improvements on the Premises, (f) manage, operate, maintain, or repair the P?operty or any portion thereof, and (g) exercise the rights of Mortgagor under any Leases or with respect to Intangible Property and Tangible Property. Mortgagee shall not be obligated to perform any of such acts or to exercise any of such powers, but if Mortgagee elects so to perf~i:>rm or exercise, Mortgagee shall not be accountable for more than it actually receives as a result of such exercise of power, and shall not be responsible to Mortgagor except for Mortgagee's .Willful misconduct or gross negligence. All powers conferred upon Mortgagee by this Mortgage, being coupled with an interest, shall be irrevocable until terminated by a written instrument executed by a duly authorized officer of Mortgagee. V. MISCELLANEOUS ~ 5.1 Notices. Except as .atherwise provided herein, whenever it is provided herein that any notice, demand, request, cons~mt, approval, declaration or other communication shall or may be given to or served upon any of:~he parties by any other parties, or whenever any of the parties desires to give or serve upon any ~ther parties any communication with respect to this Mortgage, each such notice, demand, reques:~., consent, approval, declaration or other communication shall be in writing and shall be deemed to have been validly served, given or delivered (a) upon the earlier of actual receipt and thre~:, (3) Business Days after deposit in the United States Mail, registered or certified mail, return receipt requested, with proper postage prepaid, (b) upon 16 CIt_DOCSX323661.6 [W97] transmission, when sent by tel¢co?y or other similar facsimile transmission (with such telecopy or facsimile promptly confirmed bi:/delivery of a copy by personal delivery or United States Mail as otherwise provided in this SectilPn $. 1), (c) one (1) Business Day after deposit with a reputable overnight courier with all charges prepaid or (d) when delivered, if hand-delivered by messenger, all of which shall be addressed tO~ the party to be notified and sent to the address or facsimile number indicated herein below or to such other address (or facsimile number) as may be substituted by notice given as herein provided. The giving of any notice required hereunder may be waived in writing by the party entitled to receive such notice. All notices, demands, requests, consents, approvals, declarations and other communications shall be addressed as follows: (i) If to !Mortgagor: ' Schmid Oilfield Services, Inc. c/o t~irst Energy Services Company 5445 DTC Parkway, Suite 525 Greenwood Village, Colorado 80111 Attention: Randy Spaur Tele!?hone No.: (303) 224-9710 Tele~5opier No.: (303) 224-9700 witka copy to: Holl:imd & Hart 2515 Warren Avenue State 450 P.O:'iBox 1347 Che~venne, Wyoming 82003-1347 Atte~tion: James Belcher Tel. 'No.: (307) 778-4236 Tele?opier No.: (307) 778-8175 (ii) If to Mortgagee: General Electric Capital 'Corporation " 10 South LaSalle Street ' Suite 2700 Chicago, Illinois 60603 Attention: FESCO Account Manager ~ Tel. No.: (312) 419-5900 Tel:~copier No.: (312) 419-5747 17 CH_DOCS\323661,6 [W97] Lath~.~.m & Watkins Sears~Tower, Suite 5800 ChiC~igo, Illinois 60606 Atte>~ifion Jeffrey Moran, Esq. Tel..~No.: (312) 876-7700 Tele~zopier No.: (312) 993-9767 and General Electric Capital Corporation 201 High Ridge Road Stan:iford, Connecticut 06927-5100 Attel~_tion: Corporate Counsel - Commercial Finance Tel. iNo. (203) 326-7552 Telecopier No. (203) 316-7889 5.2 Time of Essence. Time is of the essence of this Mortgage. 5.3 Covenants Run with Land. All of the covenants of this Mortgage shall run with the land constituting the Premises~. 5.4 GOVERNING LAW. THIS MORTGAGE SHALL BE CONSTRUED AND ENFORCED ACCORDING T,O THE LAWS OF THE STATE OF WYOMING (WITHOUT REFERENCE TO CONFLICTS OF LAWS PROVISIONS THEREOF). 5.5 Severabilit. y. If any:. provision of this Mortgage, or any paragraph, sentence, clause, phrase, or word, or their aplplication, in any circumstance, is held invalid, the validity of the remainderofthis Mortgage shall be construed as if such invalid part were never included. 5.6 Non-Waiver. Unless expressly provided in this Mortgage to the contrary, no consent or waiver, express or implied, by any party, to or of any breach or default by any other party shall be deemed a consent mor waiver of the performance by such defaulting party of any other obligations or the performan.:ie by any other party of the same, or of any other, obligations. 5.7 Headings. The headings of sections and paragraphs in this Mortgage are for convenience or reference only and shall not be construed in any way to limit or define the content, scope, or intent of the pro,Asions. 5.8 Grammar. As usedm this Mortgage, the singular shall include the plural, and masculine, feminine, and neuter pronouns shall be fully interchangeable, where the context so requires. 5.9 Deed in Trust. If ti~'le to the Property or any part thereof is now or hereafter becomes vested in a trustee, any prohibition or restriction against the creation of any lien on the 18 CH_DOCS\323661.6 [W97] Property shall be construed as a similar prohibition or restriction against the creation of any lien on or security interest in the beneficial interest of such trust. 5.10 Successors and Assigns. This Mortgage shall be binding upon Mortgagor, its successors, assigns, legal representatives, and all other persons or entities claiming under or through Mortgagor. "Mortgagor,". when used herein, shall include all such persons and entities and any others liable for the payment of the Secured Indebtedness, or any part thereof, whether or not they have executed the Notes .or this Mortgage. The word "Mortgagee," when used herein, shall include each of: (i) the Agem in its capacity as a Lender and as Agent for the Lenders; and (ii) the Lenders, together with each: of their successors, assigns and legal representatives. 5.11 Counterparts. This Mortgage may be executed in any number of separate counterparts, each of which shall cgllectively and separately constitute one Mortgage. 5.12 Mortgagee in Possession. Nothing contained in this Mortgage shall be construed as constituting Mortgagee a mortgagee in possession in the absence of the actual taking of possession of the Property.: 5.13 Compliance with ^.pplicable Law. Anything elsewhere herein contained to the contrary notwithstanding, (a) In the event that any provision in this Mortgage shall be inconsistent with any provision of Sections 3.4 4 101, et. seq., Wyoming Statutes (1997) (the "Act."), the provisions of the Act shall lake precedence over the provisions of this Mortgage, but shall not invalidate or render ummforceable any other provision of this Mortgage that can be construed in a manner consistent with the Act; (b) If any provision of this Mortgage shall grant to Mortgagee (including Mortgagee acting as a mortgagee-in-possession) or a receiver appointed pursuant to the provisions of this Mortgage, any rights or remedies prior to, upon or following the occurrence of an EVent of Default which are more limited than the rights that would otherwise be vested in Mortgagee or such receiver under the Act in the absence of said provision, Mortgagee and such receiver shall be vested with the rights granted under the Act to the full extent permitted by law; and " (c) Without limiting the generality of the foregoing, all reasonable expenses incurred by Mortgagee to the extent reimbursable under the Act, whether incurred before or after any decree or jud~:rnent of foreclosure, and whether or not provided for elsewhere in this Mortgage, shall be ;:~dded to the indebtedness secured by this Mortgage or by the judgment of foreclosure. 5.14 Incorporation of C'~.:idit Agreement; No Conflicts. The terms of the Credit Agreement are incorporated by rcterence herein as though set forth in full detail. In the event of any conflict between the terms an,:i provisions of Section 3.10 of this Mortgage and the Security Agreement, the terms and provis.i~ms of the Security Agreement shall control; in the event of a 19 CH_DOCSX323661,6 [W97] conflict between any other term ~:)r provision of this Mortgage and the Credit Agreement, the terms and provisions of the Credit :Agreement shall control. 5.15 No Strict Construct.ion. The parties hereto have participated jointly in the negotiation and drafting of this Mortgage. h~ the event an ambiguity or question of intent or interpretation arises, this Mortgags shall be construed as if drafted jointly by the parties hereto and no presumption or burden of )roof shall arise favoring or disfavoring any party by virtue of the authorship of this Mortgage. 5.16 Revolving Credit. 'l'his Mortgage secures the payment of future advances of Revolving Advances which may bi5 made after the date hereof to the same extent as if such future advances were made on the date t)f the execution of this Mortgage, although there mgy be no advance made on the date of the. execution of this Mortgage, and although there may, be no indebtedness outstanding at the tir:i.e any advance is made. The total principal amount of Secured Indebtedness secured by this Mor.~,,age may decrease or increase from time to time but the total unpaid principal balance so secured at any one time shall not exceed THIRTY MILLION DOLLARS AND NO CENTS ($3(11,000,000) plus interest thereon, and any and all disbursements made by Mortgagee for the' payment of taxes, special assessments or insurance on the Property, with interest on such disburseme.nts. The parties hereby acknowledge and intend that all advances of the Revolving Advanri;es, including future 'advances whenever he~-eafter made, shall be a Lien and have priority from the time this Mortgage is recorded. (SI(}NATURE PAGE FOLLOWS) 20 CH_DOCSX323661.6 [W97] IN WITNESS WHEREOF, Mortgagor has duly signed and delivered this Mortgage as 0fthe date first above 'written. ~ SCHMID OILFIELD SERVICES, INC. Name: a~ D-~,~,'~ : Title: ~a~~ S-1 STATEO~ )" COUNTY OF ) On ~ '~[') _, 12001, before me, the undersigned, a Notary Public in and for said State persona~y'"~ppeared Randy D. Spaur known to me to be the Secretary ~f Sclzmid -O~ ~ ~c., a Wyoming corporation, and acknowledged to me that such individual executed the within instrument on behalf of said corporation. WITNESS my hand and official seal. , ~oun!y'anid s~adt?~/~ My commission expires ! ~f._~ ~q . [SEAL] JANICE CT SHIGIHARA NOTARY PUBLIC, STATE OF ILLINOIS MY COMMISSION EXPIRES 10/2/2004 S-2 ,:.5 '/ EXHIBIT A Legal Description That part of Lot 6 of Section 6, T25N R112W of the 6th P.M., Lincoln County, Wyoming described as follows: Beginning at a point on the east ri~iht of way line of Highway 189, S 42039' E, 2247,6 feet from the north one-quarter comer of said Section 6 which is the point of beginning; thence S 89047, E, 630 feet along the north line of the David-Decker Subdivision to its northeast and southeast comer of this 'tract; thence northerly at right angles alol!g the northerly extension of the easterly line of the David- Decker Subdivision a dista'r~ce of 221.6 feet; thence N 89047, W, 630 feet to a point of the above-described right of way line which is S 43054, E, 1985.9 feet from the south one-quarter comer of Section 31, T27N R112W; thence S 00~13' W, 221.6 feet alor~g the said right-of-way line to the point of beginning.