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HomeMy WebLinkAbout956940WHEN RECORDED, PLEASE RETURN TO: Mark E. Rinehart Rinehart Fetzer Simonsen Booth, P.C. 50 West Broadway Suite 1200 Salt Lake City, UT 84101 Telephone: (801) 328 -0266 Facsimile: (801) 328 -0269 WITNESSETH: ARTICLE I OBLIGATIONS SECURED RECEIVED 11/29/2010 at 4:55 PM RECEIVING 956940 BOOK: 758 PAGE: 24 JEANNE WAGNER LINCOLN COUNTY CLERK, KEMMERER, WY REAL ESTATE MORTGAGE, ASSIGNMENT OF RENTS, SECURITY AGREEMENT AND FIXTURE FILING 000024 This REAL ESTATE MORTGAGE, ASSIGNMENT OF RENTS, SECURITY AGREEMENT AND FIXTURE FILING (this "Mortgage is made effective as of the day of November, 2010, by and among STEVE TURLEY, an individual, 1480 S. State, Provo, Utah 84606 "Mortgagor and RIDGELINE CAPITAL, LC, a Utah limited liability company, 1281 West 220 North, Provo, Utah 84601 "Mortgagee For good and valuable consideration, including without limitation the indebtedness herein recited, the receipt of which is hereby acknowledged, Mortgagor and Mortgagee hereby agree as follows: This Mortgage is entered into by Mortgagor and Mortgagee for the purpose of securing full payment to Mortgagee of and performance under, in such priority as Mortgagee may elect, each of the following: 000025 1.1 The due, prompt and complete payment, observance, performance and discharge of each and every obligation, covenant and agreement contained in Mortgagor's Promissory Note of even date herewith in the principal amount of up to Three Hundred Thousand Dollars ($300,000.00) (the "Note together with interest thereon and, if applicable, late fees specified therein. The Note is payable to the order of Mortgagee. This Mortgage secures due, prompt and complete payment, observance, performance and discharge of each and every obligation, covenant and agreement contained in the Note as such Note may at any time in the future be modified, amended, extended, restated, renewed and /or replaced. This Mortgage also secures due, prompt and complete payment, observance, performance and discharge of all future advances made under the Note, if any; and 1.2 The payment of all other sums, with interest thereon at the rate of interest provided for herein or in the Note, becoming due or payable under the provisions of this Mortgage, and /or under any other instrument or instruments heretofore or hereafter executed by Mortgagor having reference to or arising out of or securing the indebtedness represented by the Note; and 1.3 The payment of such additional sums and interest thereof which may hereafter be loaned to Mortgagor, or its successors or assigns, by Mortgagee, whether or not evidenced by a promissory note or notes which are secured by this Mortgage or any other mortgage by Mortgagor for the benefit of Mortgagee; and 1.4 The due, prompt and complete observance, performance and discharge of each and every obligation, covenant and agreement of Borrower contained in the Note, and of Mortgagor contained in this Mortgage, and /or under any other document evidencing or relating in any way, directly or indirectly, to the Loan except the Unsecured Environmental Indemnity Agreement of even date herewith, executed by Mortgagor for the benefit of Mortgagee (all collectively herein, the "Loan Documents ARTICLE II GRANTING CLAUSES MORTGAGOR DOES HEREBY irrevocably grant, convey, transfer, assign and mortgage to Mortgagee, and does hereby grant to Mortgagee a security interest for the benefit and security of Mortgagee under and subject to the terms and conditions hereinafter set forth, in and to any and all of the following described property which is (except where the context otherwise requires) herein collectively called the "Mortgaged Property," whether now owned or held or hereafter acquired by Mortgagor and wherever located, including without limitation any and all proceeds of and substitutions, replacements and additions to same: 2.1 That certain real property located in Lincoln County, State of Wyoming more particularly described in Exhibit A attached hereto and incorporated herein by this reference, together with any and all of the easements, rights, privileges, franchises, appurtenances thereunto belonging or in any way appertaining to the real property, including without limitation specifically but not limited to all appurtenant oil, gas and other hydrocarbons and other minerals produced from or allocated to said real property and all products processed or obtained therefrom 2 (a) All structures, buildings and improvements of every kind and description now or at any time hereafter located on the Property "Improvements including without limitation all equipment, apparatus, machinery, fixtures, fittings, and appliances and other articles and any additions to, substitutions for, change in or replacements of the whole or any part thereof, now or at any time hereafter affixed or attached to and which are an integral part of said structures, buildings, improvements or the Property or any portion thereof, and such Improvements shall be deemed to be fixtures and an accession to the freehold and a part of the Property as between the parties hereto and all persons claiming by, through or under such parties except that same shall not include such machinery and equipment of Mortgagor, or any tenant of any portion of the Property or Improvements, which is part of and /or used in the conduct of the normal business of Mortgagor or its tenant conducted upon the Mortgaged Property, which is distinct and apart from the ownership, operation and maintenance of the Mortgaged Property. (b) All articles of tangible personal property and any additions to, substitutions for, changes in or replacements of the whole or any part thereof other than personal property which is or at any time has become toxic waste, waste products or hazardous substances (hereinafter referred to as the "Personal Property including without limitation and to the extent present or found on the Property, all wall beds, wall safes, built in furniture and installations, shelving, partitions, door tops, vaults, elevators, dumb waiters, awnings, window shades, blinds, light fixtures, fire hoses and brackets and boxes for the same, fire sprinklers, alarm systems, drapery rods and brackets, screens, water heaters, incinerators, wall coverings, carpeting, linoleum, tile, other floor coverings of whatever description, communication systems, all specifically designed installations and furnishings, office maintenance and other supplies and all of said articles of property, the specific enumerations herein not excluding the general, now or at any time hereafter placed upon or used in any way in connection with the ownership, operation or maintenance of the Property or the Improvements or any portion thereof and owned by Mortgagor or in which Mortgagor now has or 3 000026 and the proceeds thereof, all water, water rights and water shares or stock of Mortgagor related to the property or useful for the property in any way, directly or indirectly, any and all general intangibles relating to the use and /or development of the property, including without limitation development allotments, governmental permits, approvals, authorizations and entitlements, agreements to provide necessary utility or municipal services, all engineering plans and diagrams, all construction plans and specifications, surveys and /or soil and substrata studies, all architectural, engineering, construction, management, maintenance, service and other contracts, and all other rights, privileges and appurtenances related to the said property and all of the estate, right, title, interest, claim and demand whatsoever of Mortgagor therein or thereto, either in law or in equity, in possession or in expectancy, now owned or hereafter acquired (all referred to collectively herein as the "Property 000027 hereafter acquires an interest, and all building materials and equipment now or hereafter delivered to the Property and intended to be installed or placed in or about the Improvements. Such tangible, personal property shall, in addition to all other tangible, personal property herein described or defined, specifically include each and every item of tangible, personal property and any substitutions for, changes in or replacements thereof which are used in the operation of the Improvements. Notwithstanding the breadth of the foregoing, the Personal Property shall not include (i) personal property which may be owned by lessees or other occupants of the Mortgaged Property; (ii) inventory of any lessee or occupant of the Mortgaged Property used in the normal course of the business conducted thereon; (iii) material, equipment, tools, machinery, or other personal property which is brought upon the Mortgaged Property only for use in construction, maintenance or repair and which is not intended to remain after the completion of such construction, maintenance or repair, of the Mortgaged Property; or (iv) such items of tangible personal property which have not been purchased or installed with proceeds of the Note and for which Mortgagee shall have executed such documents as may be required to subordinate to the lien or security interest of any purchase money lender or supplier of such tangible personal property; (c) All right, title and interest of Mortgagor now owned or hereafter acquired in and to any and lying within the right of way of any street, road, alley or public place, opened or proposed, vacated or extinguished by law or otherwise, and all easements and rights of way, public or private, tenements, hereditaments, appendages, rights and appurtenances how or hereafter located upon the Property or now or hereafter used in connection with or now or hereafter belonging or appertaining to the Property; and all right, title and interest in Mortgagor, now owned or hereafter acquired, in and to any strips and gores adjoining or relating to the Property; (d) All judgments, awards of damages, settlements and any and all proceeds derived from such hereafter made as a result of or in lieu of any taking of the Mortgaged Property or any part thereof, any interest therein or any rights appurtenant thereto under the power of eminent domain, or by private or other purchase in lieu thereof, or for any damage (whether caused by such taking or otherwise) to the Mortgaged Property or the Improvements thereon, including without limitation change of grade of streets, curb cuts or other rights of access for any public or quasi public use or purpose under any law; (e) All rents, incomes, issues and profits, revenues, royalties, bonuses, rights, accounts, contract rights, insurance policies and proceeds thereof, general intangibles and benefits of the Mortgaged Property, or arising from any lease or similar agreement pertaining thereto (the "Rents and Profits and all right, title and interest of Mortgagor in and to all leases of the Mortgaged Property now or 4 hereafter entered into and all right, title and interest of Mortgagor thereunder, including without limitation cash or securities deposited thereunder to secure performance by the lessees of their obligations thereunder, whether said cash or securities are to be held until the expiration of the terms of said leases or applied to one or more of the installments of rent coming due immediately prior to the expiration of said terms with the right to receive and apply the same to said indebtedness, and Mortgagee or Mortgagee may demand, sue for and recover such payments but shall not be required to do so; and (f) All proceeds of the conversion, voluntary or involuntary, of any of the foregoing into cash or liquidated claims. ARTICLE III MORTGAGOR'S COVENANTS 000028 TO HAVE AND TO HOLD THE MORTGAGED PROPERTY UNTO THE MORTGAGEE, ITS SUCCESSORS AND ASSIGNS FOREVER, ALL IN ACCORDANCE WITH THE PROVISIONS HEREOF. Mortgagor covenants, warrants and agrees with Mortgagee as follows: 3.1 Payment of Note. Mortgagor shall fully pay the principal and interest and other sums coming due with respect to the Note, this Mortgage or any of the Loan Documents at the time and place in the manner specified in and according to the terms thereof. 3.2 Title. Mortgagor warrants that: (a) Mortgagor has good and marketable title to an indefeasible fee simple estate in the Property described in Exhibit A, subject only to those liens, charges or encumbrances approved by Mortgagee or described in Schedule B of the lender's policy of title insurance obtained by Mortgagee as of the date hereof or in connection herewith (the "Permitted Exceptions that Mortgagor has full power and authority to grant, bargain, sell and convey the Mortgaged Property in the manner and form herein done or intended hereafter to be done; that this Mortgage is and shall remain a valid and enforceable lien on the Mortgaged Property subject only to the Permitted Exceptions; that Mortgagor and its successors and assigns shall preserve their title and interest in and to the Mortgaged Property and shall forever warrant and defend the same and shall warrant and defend the validity and priority of the lien of this Mortgage thereon forever against any and all claims and demands of all persons whomsoever, and that this covenant shall not be extinguished by any exercise of power of sale or foreclosure sale hereof, but shall run with the land; and (b) Mortgagor has and shall maintain good and marketable title to the Improvements and Personal Property, including without limitation any additions or replacements thereto, free and clear of all security interests, liens and 5 000029 encumbrances, except for those, if any, disclosed to and accepted by Mortgagee in writing, and has good right to subject Improvements and Personal Property to the security interest created hereunder. If the lien of this Mortgage on any Improvements or Personal Property shall for any reason be subject to a lease agreement, conditional sale agreement or chattel mortgage covering such property, then in the event of any default hereunder all the rights, title and interest of Mortgagor in any and all deposits made thereon or therefore are hereby assigned to the Mortgagee, together with the benefit of any payments now or hereafter made thereon. Mortgagor also hereby assigns to Mortgagee, its successors and assigns, all of Mortgagor's right, title and interest in and to any and all documents evidencing or relating to the Improvements to be constructed on the Property (the "Project Documents and all leases and use agreements of machinery, equipment and other personal property of Mortgagor in the categories hereinabove set forth, under which Mortgagor is the lessee of, or entitled to use such items, and Mortgagor agrees to execute and deliver to Mortgagee or Mortgagee all such Project Documents, leases, assignments thereof and all other agreements when requested by Mortgagee or Mortgagee. Mortgagor hereby covenants and agrees to well and punctually perform all covenants and obligations under such Project Documents, leases or agreements, but nothing herein shall obligate Mortgagee or Mortgagee to perform any obligations of Mortgagor under such Project Documents, leases or agreements unless Mortgagee or Mortgagee shall choose to do so; and (c) Mortgagor will, at its own cost without expense to Mortgagee or Mortgagee, do, execute, acknowledge and deliver all and every such further act, deed, conveyance, mortgage, assignment, notice of assignment, transfer and assurance as Mortgagee or Mortgagee shall from time to time reasonably require for the better assuring, conveying, assigning, transferring and confirming unto Mortgagee the property and rights hereby conveyed or assigned or intended now or thereafter so to be, or which Mortgagor may be or hereafter become bound to convey or assign to Mortgagee for the intention of facilitating the performance of the terms of this Mortgage or for the filing, registering, perfecting and /or recording of this Mortgage and any other Loan Document as requested by Mortgagee and, on demand, Mortgagor will execute, deliver and file or record one or more financing statements, chattel mortgages or comparable security instruments more effectively evidencing the lien hereof upon the Personal Property. 3.3 Business Rights. Mortgagor shall do all things necessary to preserve and keep in full force and effect Mortgagor's rights and privileges to do business and to conduct Mortgagor's business in the State of Wyoming, and shall comply with all regulations, rules, ordinances, statutes, orders and decrees of any governmental authority or court applicable to Mortgagor. 6 000030 3.4 Payment of Taxes, Assessments, Insurance Premiums and Charges. Mortgagor shall pay, prior to delinquency, all insurance premiums that become due and payable on any insurance policies required to be maintained hereunder, all taxes, assessments, charges and levies imposed by any Governmental Agency which are or may become a lien affecting the Property or any part thereof, including without limitation assessments on any appurtenant water stock; except that Mortgagor shall not be required to pay and discharge any tax, assessment, charge or levy that is being actively contested in good faith by appropriate proceedings, as long as Mortgagor has established and maintains reserves adequate to pay any liabilities contested pursuant to this Section in accordance with generally accepted accounting principles and, by reason of nonpayment, none of the Mortgaged Property covered by the Loan Documents or the lien or security interest of Mortgagee is in danger of being lost or forfeited. 3.5 Maintenance and Repair. Mortgagor shall, at Mortgagor's sole cost and expense, keep the Mortgaged Property in good operating order, repair and condition and shall not commit or permit any waste thereof, which condition, during the course of any reconstruction of the Improvements, shall be subject to the normal constraints and effects of reconstruction. Mortgagor shall make all repairs, replacements, renewals, additions and improvements and complete and restore promptly and in good workmanlike manner any Improvements which may be damaged or destroyed thereon, and pay when due all costs incurred therefore. Mortgagor shall not remove or demolish any of the Mortgaged Property conveyed hereby, nor demolish or materially alter the Mortgaged Property without the prior written consent of the Mortgagee. Mortgagor shall permit Mortgagee or its agents the opportunity to inspect the Mortgaged Property at all times, including without limitation the interior of any structures, at any reasonable times. 3.6 Compliance with Laws. Mortgagor shall comply with all laws, ordinances, regulations, covenants, conditions and restrictions affecting the Mortgaged Property or the operation thereof, and shall pay all fees or charges of any kind in connection therewith. 3.7 Casualty. Mortgagor will give the Mortgagee prompt notice of damage to or destruction of any Improvements on the Property and in case of loss covered by policies of insurance, the Mortgagee is hereby authorized to make proof of loss if not made promptly by Mortgagor or any lessee. Any expenses incurred by the Mortgagee in the collection of insurance proceeds, together with interest thereon from the date of any such expense at the interest rate set forth in the Note, shall be added to and become a part of the indebtedness secured hereby and shall be paid and reimbursed to the Mortgagee, together with accrued interest thereon, immediately upon demand by Mortgagee. Upon the occurrence of damage to or destruction of any Improvements, if Mortgagee shall so elect in its sole and unfettered discretion, Mortgagor shall make the net proceeds of insurance available for repair, restoration and /or reconstruction under the conditions and in the manner specified in the next following paragraph. If Mortgagee shall otherwise determine, then the Mortgagee in reduction of the indebtedness shall be entitled to apply such insurance proceeds to reduce and repay the obligations secured by this Mortgage. If the Mortgagee shall require that the Improvements be repaired or rebuilt then the repair, restoration, replacement or rebuilding of the Improvements shall be to a condition of at least 7 000031 equal value as prior to such damage or destruction. Insurance proceeds made available for restoration, repair, replacement or rebuilding of the Improvements shall be disbursed from time to time in the manner determined by Mortgagee. The Mortgagee may require that plans and specifications for the restoration, repair, replacement or rebuilding be submitted to and approved by the Mortgagee prior to the commencement of the work. Any surplus which may remain out of said insurance proceeds after payment of costs of building and restoration may, at the option of the Mortgagee, be applied either on account of the indebtedness secured hereby or be paid to any person or persons entitled thereto. Application or release of proceeds under the provisions hereby shall not cure or waive any default or notice of default hereunder or invalidate any act done pursuant to such notice. No interest shall be allowed on account of any such proceeds or any other funds held in the hands of the Mortgagee or the disbursing party hereunder. 3.8 Condemnation. Mortgagor, immediately upon obtaining knowledge of the institution of any proceeding for the condemnation of the Mortgaged Property or any portion thereof, shall notify Mortgagee of the pendency thereof. Mortgagor hereby assigns, transfers and sets over unto the Mortgagee all compensation, rights of action and the entire proceeds of any award, up to the maximum amount of all amounts then due and payable under the Note and the Loan Documents, including without limitation all interest, costs, expenses and Advances, as that term is defined below, and any claim for damages for any of the Mortgaged Property taken or damaged under the power of eminent domain or by condemnation or by sale in lieu thereof. Mortgagee may, at its option, commence, appear in and prosecute, in its own name, any action or proceeding, or make any compromise or settlement, in connection with such condemnation, taking under the power of eminent domain or sale in lieu thereof, and hereby appoints Mortgagee as Mortgagor's true and lawful attorney for such purposes, such power being coupled with an interest. After deducting therefrom all of its expenses, including without limitation attorneys' fees, the Mortgagee may elect, in its sole discretion and notwithstanding the fact that the security given hereby may not be impaired by a partial condemnation, to apply any part or all of the proceeds of the award, in such order as Mortgagee may determine, upon or in reduction of the indebtedness secured hereby whether due or not. Any application of all or a portion of the proceeds of any such award to the indebtedness shall not cure or waive any default or notice of default hereunder or invalidate any act done pursuant to such notice. Mortgagor agrees to execute such further assignments of any compensation, award, damages, right of action and proceeds as Mortgagee may require. 3.9 Indemnification. Mortgagor shall appear in and defend any suit, action or proceeding that might in any way, in the reasonable judgment of Mortgagee, affect the value of the Mortgaged Property, the title to the Mortgaged Property or the rights and powers of Mortgagee or Mortgagee hereunder. Mortgagor shall, at all times, indemnify, hold harmless and on demand reimburse Mortgagee for any and all loss, damage, expense or cost, including without limitation cost of evidence of title and attorneys' fees, arising out of or incurred in connection with any such suit, action or proceeding, and the sum of such expenditures shall be secured by this Mortgage and shall accrue interest at the "Default Rate" as that term is defined in the Note and shall be due and payable on demand. Mortgagor shall pay costs of suit, cost of evidence of 8 9 000032 title and reasonable attorneys' fees in any proceeding or suit brought by Mortgagee or Mortgagee to foreclose this Mortgage. 3.10 Sale of Premises, Change in Ownership of Mortgagor or Additional Financing Not Permitted. Mortgagor specifically agrees that: (a) In order to induce Mortgagee to make the loan secured hereby, Mortgagor agrees that unless a request for partial release is granted by Mortgagee pursuant to Section 5.5 hereof, if the Mortgaged Property or any part thereof or any interest therein, shall be sold, assigned, transferred, conveyed, pledged, mortgaged or encumbered in any way with financing other than that secured hereby or otherwise alienated by Mortgagor in any way, whether voluntarily or involuntarily or by operation of law, except as shall be specifically hereinafter permitted or with the prior written consent of Mortgagee, then the Note secured hereby and all other obligations hereunder shall accelerate and shall automatically, without any further action on the part of Mortgagee or Mortgagee, be immediately due and payable in full. Except as shall be otherwise specifically provided herein, any (i) change in the legal or equitable ownership of the Mortgaged Property whether or not of record, or (ii) change in the form of entity of Mortgagor, or any merger of Mortgagor into any other entity, or any change, transfer, assignment in or of the ownership of Mortgagor (including without limitation the hypothecation or encumbrance of any ownership interest in Mortgagor) shall be deemed to be a transfer of an interest in the Mortgaged Property which shall cause immediate acceleration of the Note as provided in this paragraph. In connection herewith, the financial stability and managerial and operational ability of Mortgagor is a substantial and material consideration to Mortgagee in its agreement to make the loan to Mortgagor secured hereby. The transfer of an interest in Mortgagor and /or the Mortgaged Property may materially alter and reduce Mortgagee's security for the indebtedness secured hereby. Moreover, Mortgagee has agreed to make its loan to Mortgagor based upon the presumed value of the Mortgaged Property and the Rents and Profits thereof. Therefore, it will be a diminution of Mortgagee's security if junior financing, except as shall be permitted by Mortgagee, or if other liens or encumbrances should attach to the Mortgaged Property. (b) Mortgagor may request Mortgagee to approve a sale or transfer of the Mortgaged Property to a party who would become the legal and equitable owner of the Mortgaged Property and would assume any and all obligations of Mortgagor under the Loan Documents (the "Purchaser Mortgagee shall not be obligated to consider or approve any such sale, transfer or assumption or request for the same. However, upon such request, Mortgagee may impose limiting conditions and requirements to its consent to an assumption. (c) In the event ownership of the Mortgaged Property, or any part thereof, becomes vested in a person or persons other than Mortgagor, the Mortgagee may deal with such successor or successors in interest with reference to the Note and /or this Mortgage in the same manner as with Mortgagor, without in any way releasing, discharging or otherwise affecting the liability of Mortgagor under the Note, this Mortgage or any other Loan Document. No sale of Mortgagor's interest in the Mortgaged Property, no forbearance on the part of Mortgagee, no extension of the time for the payment of the Mortgage indebtedness or any change in the terms thereof consented to by Mortgagee shall in any way whatsoever operate to release, discharge, modify, change or affect the original liability of Mortgagor herein, either in whole or in part. Any deed conveying the Mortgaged Property, or any part thereof, shall provide that the grantee thereunder assumes all of Mortgagor's obligations under the Note, this Mortgage and all other Loan Documents. In the event such deed shall not contain such assumption, Mortgagee shall have all rights reserved to it hereunder in the event of a default or if Mortgagee shall not elect to exercise such rights and remedies, the grantee under such deed shall nevertheless be deemed to have assumed such obligations by acquiring the Mortgaged Property or such portion thereof subject to this Mortgage. Nothing contained in this Section shall be construed to waive the restrictions against the transfer of the Mortgaged Property contained herein. 000033 3.11 Transfer of Personal Property. Mortgagor shall not voluntarily, involuntarily or by operation of law sell, assign, transfer, hypothecate, pledge or otherwise dispose of the Personal Property or any interest therein and shall not otherwise do or permit anything to be done or occur that may impair the Personal Property as security hereunder, except that so long as this Mortgage is not in default, Mortgagor shall be permitted to sell or otherwise dispose of the Personal Property when absolutely worn out, inadequate, unserviceable or unnecessary for use in the operation of the Property or in the conduct of the business of Mortgagor, if simultaneously therewith Mortgagor replaces the same or substitutes for the same other Personal Property at least equal in value to the initial value of that Personal Property disposed of. 3.12 Title to Replacements and Substitutions. All right, title and interest of Mortgagor in and to all extensions, improvements, betterments, renewals, substitutes and replacements of, and all additions and appurtenances to the Personal Property, Improvements or the Mortgaged Property hereafter acquired by or released to Mortgagor or constructed, assembled or placed by Mortgagor on the Mortgaged Property, and all conversions of the security constituted thereby, immediately upon such acquisition, release, construction, assembling, placement or conversion, as the case may be, and in each such case, without any further Mortgage, conveyance, assignment or other act by Mortgagor, shall automatically become subject to the lien of this Mortgage as fully and completely, and with the same effect and in the same priority as the lien of this Mortgage shall have attached to the item so replaced or substituted immediately prior to such replacement of substitutions, as though now owned by Mortgagor and specifically described in the granting clause hereof, but at any and all times Mortgagor will execute and deliver to 10 000034 Mortgagee any and all such further assurances, mortgage, conveyances or assignments thereof as Mortgagee or Mortgagee may reasonably require for the purpose of expressly and specifically subjecting the same to the lien of this Mortgage. 3.13 Security Agreement. This Mortgage shall constitute a Security Agreement as that term is defined in the Wyoming Uniform Commercial Code with respect to all of those portions of the Mortgaged Property which constitute personal property or fixtures governed by the Wyoming Uniform Commercial Code, provided, however, Mortgagor hereby agrees to execute and deliver on demand and hereby irrevocably constitutes and appoints Mortgagee the attorney in -fact of Mortgagor (such power is coupled with an interest in favor Mortgagee) to execute, deliver and, if appropriate, to file any agreement, financing statement or other instruments as Mortgagee may request or require in order to impose or perfect the lien or security interest granted herein. Notwithstanding the above, this Mortgage is also intended to serve as a fixture filing pursuant to the terms of the Wyoming Uniform Commercial Code. This filing is to be recorded in the real estate records in the counties in which the Mortgaged Property is located. For purposes of that filing, the Mortgagee shall be entitled to use the names and addresses of the parties that are set forth in the first paragraph hereof. 3.14 Management. Mortgagor agrees that the Mortgagee shall have and reserves the right to install professional management of the Mortgaged Property upon the occurrence of an Event of Default as defined herein. Such installation shall be at the sole discretion of the Mortgagee and nothing herein shall obligate the Mortgagee to exercise its right to install professional management. The cost of such management shall be borne by Mortgagor and shall be treated as an Advance hereunder. Nothing contained herein shall limit Mortgagee's rights in equity to obtain a receiver for the Mortgaged Property. 3.15 Advances. If Mortgagor shall fail to perform any of the covenants herein contained or contained in any other Loan Document, the Mortgagee may, but without obligation to do so, pay any and all amounts necessary to perform the same or cause the same to be performed on behalf of Mortgagor, and all sums so expended by Mortgagee for payment of any item whatsoever, including, without limitation, payment of taxes, insurance premiums, lien claimants or assessments shall be secured by this Mortgage and each such payment shall be and all such payments are collectively referred to herein as an "Advance." Mortgagor shall repay to Mortgagee on demand each and every Advance and the sum of each such Advance shall accrue interest at the Default Rate, as that term is defined in the Note, from the date of each Advance until repaid to Mortgagee. Nothing herein contained, including without limitation the payment of such amount or amounts by Mortgagee, shall prevent any such failure to perform on the part of Mortgagor from constituting an Event of Default as defined herein. 3.16 Reimbursement for Costs. Mortgagor shall reimburse Mortgagee for all expenses Mortgagee actually incurred or shall incur for travel, lodging, or other out of pocket costs associated with Mortgagee's initial and subsequent due diligence and monitoring of the project or for due diligence relating to loans that Mortgagee may make with respect to the properties described in the preceding paragraph. Mortgagor also agrees to reimburse Mortgagee for all 1 1 12 3 costs, including without limitation reasonable attorneys' fees, relating to enforcement of this Mortgage or the Note secured hereby or administration of the loan evidenced by the Note and any and all other out of pocket expenses incurred by Mortgagee relating to any of the foregoing. 3.17 Time. Mortgagor agrees that time is of the essence hereof in connection with all obligations of Mortgagor herein, in the Note or any other Loan Documents. 3.18 Estoppel Certificates. Mortgagor within ten (10) days after written request shall furnish a duly acknowledged written statement setting forth the amount of the debt secured by this Mortgage, and stating either that no setoffs or defenses exist against the Mortgage debt, or, if such setoffs or defenses are alleged to exist, the nature thereof. 3.19 Records. Mortgagor agrees to keep adequate books and records of account of the operation of the Mortgaged Property in accordance with generally accepted accounting principles consistently applied and at any time, with or without notice, will permit the Mortgagee's agents, accountants and attorneys, to visit and inspect the Mortgaged Property and examine Mortgagor's books and records of account in respect to the Mortgaged Property, and to discuss Mortgagor's affairs, finances and accounts with Mortgagor, at such reasonable times as Mortgagee may request. 3.20 Assignment of Rents and Profits. Mortgagor does hereby assign to Mortgagee all Rents and Profits as follows: (a) The Rents and Profits are hereby unconditionally assigned, transferred, conveyed and set over to Mortgagee to be applied by Mortgagee in payment of the principal and interest and all other sums payable on the Note, and all other sums payable under this Mortgage. Prior to the happening of any Event of Default as set forth herein, Mortgagor shall have a license to collect and receive all Rents and Profits. If an Event of Default has occurred and is continuing, Mortgagor's right to collect and receive Rents and Profits shall cease and Mortgagee shall have the sole right, with or without taking possession of the Property, to collect all Rents and Profits, including without limitation those past due and unpaid. Any Rents and Profits received by Mortgagor after an Event of Default has occurred and is continuing shall be received by Mortgagor in trust as trustee for the benefit of Mortgagee. Mortgagor shall be required to account to Mortgagee for any rents and profits not applied in accordance with the provisions of the Loan Documents. Nothing contained in this Section 2.20(a) or elsewhere in this Mortgage shall be construed to make Mortgagee a "mortgagee in possession" unless and until Mortgagee actually takes possession of the Mortgaged Property either in person or through an agent or receiver. (b) Mortgagor agrees to execute such other assignments of Rents and Profits applicable to the Mortgaged Property as the Mortgagee may from time to time request while this Mortgage and the debt secured hereby are outstanding. Mortgagor shall not (i) execute (except as noted above) an assignment of any of 13 000035 Mortgagor's right, title or interest in the Rents and Profits or any portion thereof, (ii) execute any lease of any portion of the Mortgaged Property which shall not be approved in advance by Mortgagee; or (iii) in any other manner impair the value of the Mortgaged Property or the security of the Mortgagee for the payment of the indebtedness. (c) Mortgagor covenants and agrees that it shall at all times promptly and faithfully perform, or cause to be performed, all of the covenants, conditions and agreements contained in all leases of the Mortgaged Property now or hereafter existing, on the part of the lessor thereunder to be kept and performed. (d) Nothing herein shall obligate the Mortgagee to perform the duties of Mortgagor as landlord or lessor under any such leases or tenancies. (e) Mortgagor shall furnish to the Mortgagee, within fifteen (15) days after a request by the Mortgagee to do so, a written statement, certified as true and correct by Mortgagor, containing the names of all lessees or occupants of the Mortgaged Property, the terms of their respective leases or tenancies, the spaces occupied and the rentals paid. 3.21 Compliance with Covenants. Mortgagor warrants that it is not in violation of any covenant, condition or restriction regarding the ownership, use or occupancy of the Mortgaged Property and that the use of the Improvements, upon completion thereof, shall not constitute a violation of any such covenant, condition or restriction. If Mortgagor shall fail to perform any obligations set forth in such covenants, conditions or restrictions, the Mortgagee may, but without obligation to do so, pay any and all amounts necessary to perform same or cause same to be performed on behalf of Mortgagor, and all sums so expended by Mortgagee for any such payment or performance shall be secured by this Mortgage and shall be an Advance under the terms of this Mortgage. Mortgagor's failure to perform Mortgagor's obligations under any such declaration or mutual arrangement shall constitute an Event of Default. 3.22 Mortgagor represents and warrants that the following are true and accurate, and covenants and agrees that the following will continue (unless specifically waived in writing by Mortgagee) to be true and accurate during the term of this Mortgage: (a) Mortgagor has all right, power and authority to execute this Mortgage and grant the security interest in the Property created hereby. (b) Mortgagor is the sole legal owner of fee title to the Property and holds such title free and clear of liens, encumbrances and defects, except for the following (each of which is hereby expressly permitted hereunder and consented to by Mortgagee) (each, a "Permitted Exception accrued but not yet due; (1) liens for real property taxes and assessments (2) the lien of this Mortgage and other liens for the benefit of Mortgagee or any of its affiliates; and 14 000036 (3) easements, rights of way, or other similar restrictions or encumbrances currently of record and accepted specifically by Mortgagee as listed exceptions to Mortgagee's lender title policy, none of which shall (i) customarily be considered to render property uninsurable or unmarketable in the jurisdiction in which the Property is located or (ii) interfere in any material respect with Mortgagor's intended development or use of the Property. (c) There is no pending or, to the knowledge of Mortgagor, threatened action or proceeding before any court or administrative agency, and there are no final judgments of record, against Mortgagor or relating to or affecting the Property. (d) Except as disclosed in Mortgagee's title insurance policy, to Mortgagor's knowledge, the Property (1) and the present use thereof comply in all material respects with all applicable laws, (2) is not the subject of a pending or proposed condemnation or special or other assessments for public improvements or otherwise, (3) has adequate rights of access to public ways and is served by all utilities required for the current use thereof, (4) is comprised of one or more parcels which constitute separate tax lot(s) and none of which constitutes a portion of any other tax lot, and (5) is not located in a flood hazard area as designated by the Federal Emergency Management Agency. (e) Mortgagor is not a "foreign person" within the meaning of 1445(0(3) of the Internal Revenue Code of 1986, as amended, and any successor statutes thereto. (0 Mortgagor and each person or entity owning a direct or indirect interest in Mortgagor is not currently identified on the list of specially designated nationals and blocked persons subject to financial sanctions that is maintained by the U.S. Treasury Department, Office of Foreign Assets Control or any other similar restricted list and is not a person or entity subject to any other trade restriction or prohibition. (g) Neither Mortgagor nor any affiliate thereof nor any holder of direct or indirect equity interest therein is, maintains, has any obligation to contribute to, has any direct or indirect liability with respect to, or has any assets the constitute, any "employee benefit plan," "multiemployer plan," "governmental plan," any other "plan" (within the meaning of Employee Retirement Income Security Act of 1974, as amended or re- codified from time to time, and the regulations promulgated thereunder, or the Internal Revenue Code of 1986, as amended, and any 000037 successor statutes thereto) or "plan assets" (within the meaning of 29 C.F.R. Section 2510.3 -101 or otherwise). (h) There is no management agreement in effect with respect to, and no property management fee is or will be payable in connection with, the management of the Property. 3.23 Mortgagor hereby agrees that, so long as the lien of this Mortgage is not discharged in full, it will not, without the prior written consent of Mortgagee, sell, convey, mortgage, grant, bargain, encumber, pledge, assign or otherwise transfer the Property or any part thereof or permit the Property or any part thereof to be sold, conveyed, mortgaged, granted, bargained, encumbered, pledged, assigned or otherwise transferred to any person or entity other than Mortgagee. 3.24 So long as the lien of this Mortgage is not discharged in full, (1) Mortgagor shall at all times comply with the terms and conditions of the documents governing any other lien, encumbrance, charge or assessment on the Property (each, an "Other Lien" and such documents being, collectively, the "Other Lien Documents and the obligations secured thereby, (2) Mortgagor agrees that, if Mortgagor fails to so comply with the documents governing any Other Lien, Mortgagee may in its sole discretion pay or perform, on behalf of Mortgagor, the obligation of Mortgagor under the documents governing such Other Lien that Mortgagor so failed to pay or perform, in which case Mortgagor shall reimburse Mortgagee upon demand for all amounts expended by Mortgagee in connection therewith together with interest at the then applicable rate of interest under the Note (and such reimbursement obligation, together with such interest, shall constitute additional Obligations hereunder), and (3) Mortgagor agrees that, with respect to any Other Lien with priority over the lien of this Mortgage, without the prior written consent of Mortgagee, it will not amend or modify, or consent or agree to any amendment or modification, of any Other Lien Document that would operate to accelerate any due date thereunder or increase the amount of any obligations secured by any Other Lien. This Paragraph shall not be construed as permitting Mortgagor to further encumber the Property except as otherwise expressly permitted by the terms of this Mortgage. ARTICLE IV DEFAULT 4.1 Events of Default. The occurrence of any of the following events shall be an Event of Default: default in the payment or performance of any obligations secured hereby or contained herein; or the occurrence of any "Event of Default," as defined below. 4.2 Specific Events of Default. The occurrence of any one or more of the following, whatever the reason therefore, shall constitute an "Event of Default" hereunder: (a) Mortgagor shall fail to pay, when due and payable, any amount due pursuant to the Note, this Mortgage or any other Loan Document or otherwise; or 15 (b) Mortgagor shall fail to perform or observe any term, covenant or obligation under the Note, this Mortgage or any other Loan Document; or (c) any representation or warranty of Mortgagor contained in any Loan Document or in any other document made or delivered pursuant to or in connection with any of the Loan Documents proves incorrect or to have been incorrect in any material respect when made; or (d) Mortgagor shall default in any way on any other Note, Mortgage, or any other loan document in which Mortgagor and Mortgagee are parties. (e) Mortgagor (which term shall include any entity comprising or owning Mortgagor) is dissolved or liquidated, or otherwise ceases to exist, or all or substantially all of the assets of Mortgagor are sold or otherwise transferred without Mortgagee's written consent, or any merger, assignment, transfer, conveyance, assignment, contribution or other change in ownership of Mortgagor or any owner of Mortgagor occurs; or (f) Mortgagor or any guarantor of the Note is the subject of an order for relief by the bankruptcy court, or is unable or admits in writing his or her or its inability to pay the guarantor's debts as they mature, or makes an assignment for the benefit of creditors; or Mortgagor or any guarantor applies for or consents to the appointment of any receiver, Mortgagee, custodian, conservator, liquidator, rehabilitator or similar officer "Receiver or any Receiver is appointed and the appointment continues undischarged or unstayed for thirty (30) calendar days; or Mortgagor or any guarantor of the Note institutes or consents to any bankruptcy, insolvency, reorganization, arrangement, readjustment of debt, dissolution, custodianship, conservatorship, liquidation, rehabilitation or similar proceedings relating to it or to all or any part of its property under the laws of any jurisdiction; or any similar proceeding is instituted, and continues undismissed or unstayed for thirty (30) calendar days; or any judgment, writ, attachment, execution or similar process is issued or levied against all or any part of the Property or Mortgagor, and is not released, vacated or fully bonded within thirty (30) calendar days after such issue or levy; or (g) there shall occur a material adverse change in the financial condition of Mortgagor or any guarantor of the Note from their respective financial conditions as of the date of the Note, as determined by Mortgagee in its reasonable discretion; or (h) any Loan Document, at any time after its execution and delivery or for any reason other than the agreement of Mortgagee or the satisfaction in full of all indebtedness and obligations of Mortgagor under the Loan Documents, ceases to be in full force and effect or is declared to be null and void by a court of competent jurisdiction; or Mortgagor or any Mortgagee, officer, director, 16 000038 shareholder or partner of any entity comprising Mortgagor or any guarantor claims that any Loan Document is ineffective or unenforceable, in whole or in part, or denies any or further liability or obligation under any Loan Document, unless all indebtedness and obligations of Mortgagor thereunder have been fully paid and performed; or (i) an event of default or foreclosure occurs or commences under any other note, Mortgage, mortgage, document, instrument or agreement secured by or securing the Mortgaged Property or Improvements or to which Mortgagor or any guarantor of the Note is a party or by which either Mortgagor or any guarantor of the Note is bound; or (j) there occurs any Transfer of the Mortgaged Property in whole or in part, unless such Transfer is a part of a partial release of the Mortgaged Property pursuant to the terms hereof. For purposes of this Section 4.2(j), the term "Transferred" shall be defined as any sale, grant, lease, conveyance, assignment, hypothecation, or other transfer of, or any encumbrance, mortgage, lien or pledge against the Mortgaged Property, any interest in the Mortgaged Property, any interest of Mortgagor's members, managers or principals in the Mortgaged Property, or any change in Mortgagor's composition (except as expressly allowed pursuant to the provisions of this Mortgage), in each instance whether voluntary or involuntary, direct or indirect, by operation of law or otherwise and including without limitation the grant of an option or the execution of an agreement related to the foregoing matters, as well as a merger or consolidation of Mortgagor into another entity. ARTICLE V REMEDIES Upon the occurrence of any Event of Default, Mortgagee shall have the following rights and remedies: 5.1 Acceleration of Maturity. Mortgagee may declare the entire principal of the Note then outstanding (if not then due and payable thereunder) and all other obligations of Mortgagor hereunder or under the Note, to be due and payable immediately and without notice or grace period of any kind, and, subject to applicable provisions of law, upon any such declaration the principal of the Note and accrued and unpaid interest, and all other amounts to be paid under the Note, this Mortgage or any other Loan Document shall become and be immediately due and payable, anything in the Note or in this Mortgage to the contrary notwithstanding. 5.2 Default Interest. Regardless of whether Mortgagee exercises any other right set forth in this Article 5, after the Maturity Date or any acceleration thereof, or upon any Event of Default, through and including without limitation the date such default is cured, the entire principal balance under the Note shall thereafter earn interest at the Default Rate, as defined in the Note. 17 000039 18 000040 5.3 Operation of Mortgaged Property. Mortgagee in person or by its agent, without any obligation so to do, and without notice or demand upon, or consent from Mortgagor, and without releasing Mortgagor from any obligation hereunder, may and shall be entitled to: (a) make any payment or do any act which Mortgagor has failed to make or do; (b) through a receiver, enter upon, take possession of, manage and operate the Mortgaged Property or any part thereof; (c) make or enforce, or if the same be subject to modification or cancellation, modify or cancel leases upon such terms or conditions as Mortgagee deems proper; (d) obtain and evict tenants, and fix or modify rents, make repairs and alterations and do any acts which Mortgagee deems proper to protect the security hereof; and (e) with or without taking possession, in its own name or in the name of Mortgagor, use for or otherwise collect and receive the Rents and Profits and all other benefits, including without limitation those past due and unpaid, and apply the same, less costs and expenses of operation and collection, including without limitation reasonable attorneys' fees, upon any indebtedness secured hereby, and in such order as Mortgagee may determine. 5.4 Judicial Remedies. Mortgagee may bring an action in any court of competent jurisdiction to foreclose this Mortgage or to enforce any of the covenants and agreements hereof and to take such steps to protect and enforce its rights whether by action, suit or proceeding in equity or at law for the specific performance of any covenant, condition or agreement in the Note, this Mortgage or any other Loan Document, or in aid of the execution of any power herein granted, or for any foreclosure hereunder, or for the enforcement of any other appropriate legal or equitable remedy or otherwise as the Mortgagee shall elect. This Mortgage may be foreclosed in private sale or as a mortgage, as Mortgagee shall elect in Mortgagee's sole discretion. 5.5 Maintenance of Mortgaged Property. Mortgagee may have a receiver appointed by a court of competent jurisdiction for the purpose of collecting rents and managing the Mortgaged Property, and Mortgagor hereby consents in advance to such appointment. The Mortgagee or Mortgagee personally, or by its agents or attorneys, or by the receiver appointed by the court, may enter into and upon all or any part of the Mortgaged Property, and each and every part thereof, and may exclude Mortgagor, Mortgagor's agents and servants wholly therefrom, and having and holding the same, may use, operate, manage and control the Mortgaged Property and conduct the business thereof, either personally or by Mortgagor's superintendents, managers, agents, servants, attorneys or receivers. Upon every such entry, any party occupying the Mortgaged Property in accordance with this Article 5, at the expense of the Mortgaged Property or Mortgagor, may from time to time maintain and restore the Mortgaged Property or any part thereof either by purchase, repair or construction, and in the course of such purchase, repair or construction may make such changes in the Improvements as it may deem desirable and may insure the same. Likewise, from time to time, at the expense of the Mortgaged Property, the Mortgagee or Mortgagee or any such party may make all necessary or proper repairs, renewals and replacements of the Personal Property and such useful alterations, betterments and improvements thereto and thereon as to it may seem advisable. In every such case the Mortgagee or Mortgagee or any such party shall have the right to manage and operate the Mortgaged Property and to carry on the business thereof and exercise all rights and powers of Mortgagor with respect thereto either in the name of Mortgagor or otherwise, as it shall deem best, and shall (i) cause any or all of the Mortgaged Property to be sold under the power of sale granted by this Mortgage or any of the other Loan Documents in any manner permitted by applicable law, including without limitation Wyoming Code §34 -4 -101, et. seq.. For any sale under the power of sale granted by this Mortgage, Mortgagee must record and give all notices required by law and 19 000041 be entitled to collect and receive the Rents and Profits of the Mortgaged Property and every part thereof and after deducting the expenses of conducting the business thereof and of all maintenance, repairs, renewals, replacements, alterations, additions, betterments and improvements and amounts necessary to pay for taxes, assessments, insurance and prior or other proper charges upon the Mortgaged Property or any part thereof, as well as just and reasonable compensation for the agents, clerks, servants and other employees by it properly engaged and employed, the Mortgagee shall apply the monies arising as aforesaid, in the order as is set forth in the Note. 5.6 Rights of Secured Party. Mortgagee shall have all of the remedies of a Secured Party under the Wyoming Uniform Commercial Code, including without limitation, the right and power to sell, or otherwise dispose of, the Personal Property, or any part thereof, and for that purpose may take immediate and exclusive possession of the Personal Property, or any part thereof, and with or without judicial process to the extent permitted by law, enter upon any premises on which the Personal Property or any part thereof, may be situated and remove the same therefrom without being deemed guilty of trespass and without liability for damages thereby occasioned, or at Mortgagee's option Mortgagor shall assemble the Personal Property and make it available to the Mortgagee at the place and the time designated in the demand. Mortgagee shall be entitled to hold, maintain, preserve and prepare the Personal Property for sale. Mortgagee, without removal of the Personal Property from the Mortgaged Property, may render the Personal Property inoperable and dispose of the Personal Property on the Mortgaged Property. To the extent permitted by law, Mortgagor expressly waives any notice of sale or other disposition of the Personal Property and any other right or remedy of Mortgagee existing after default hereunder, and to the extent any such notice is required and cannot be waived, Mortgagor agrees that as it relates to this Section 3.6 only, if such notice is mailed, postage prepaid, to Mortgagor at the address set forth in Section 5.12 hereof at least ten (10) days before the time of the sale or disposition, such notice shall be deemed reasonable and shall fully satisfy any requirement for giving of said notice. 5.7 Foreclosure. All rights, powers and privileges granted to or conferred upon a Mortgagee under a Mortgage in accordance with the laws of the State of Wyoming are hereby adopted and incorporated into this Mortgage by this reference and in accordance with such rights, powers and privileges: (a) The Mortgagee may, and upon the written request of Mortgagee shall, with or without entry, personally or by its agents or attorneys insofar as applicable pursuant to and in accordance with the laws of Wyoming: then, upon the expiration of such time as is required by law, may sell the Mortgaged Property, and all estate, right, title, interest, claim and demand of Mortgagor therein, and all rights of redemption thereof, at one or more sales, as an entirety or in parcels, with such elements of real and /or personal property (and, to the extent permitted by applicable law, may elect to deem all of the Mortgaged Property to be real property for purposes thereof), and at such time or place and upon such terms as Mortgagee may determine and shall execute and deliver to the purchaser or purchasers thereof a deed or deeds conveying the property sold, but without any covenant or warranty, express or implied, and the recitals in the deed or deeds of any facts affecting the regularity or validity of a sale will be conclusive against all persons. In the event of a sale, by foreclosure or otherwise, of less than all of the Mortgaged Property, this Mortgage shall continue as a lien and security interest on the remaining portion of the Mortgaged Property; or (ii) institute proceedings for the complete or partial foreclosure of this Mortgage as a mortgage; and in this connection Mortgagor does hereby expressly waive to the extent permitted by law Mortgagor's right of redemption after a mortgage foreclosure sale; or (iii) apply to any court of competent jurisdiction for the appointment of a receiver or receivers for the Mortgaged Property and of all the earnings, revenues, rents, issues, profits and income thereof, which appointment is hereby consented to by Mortgagor; or (iv) take such steps to protect and enforce its rights whether by action, suit or proceeding in equity or at law for the specific performance of any covenant, condition or agreement in the Note or in this Mortgage, or in aid of the execution of any power herein granted, or for any foreclosure hereunder, or for the enforcement of any other appropriate legal or equitable remedy or otherwise as Mortgagee shall select. (b) The Mortgagee may adjourn from time to time any sale by it made under or by virtue of this Mortgage by announcement at the time and place appointed for such sale or sales and, except as otherwise provided by any applicable provision of law, the Mortgagee without further notice or publication, may make such sale at the time and place to which the sale shall be so adjourned; 20 000042 (c) Upon the completion of any sale or sale made by the Mortgagee under or by virtue of this Section, the Mortgagee shall execute and deliver to the accepted purchaser or purchasers a good and sufficient instrument, or good and sufficient instruments, conveying, assigning and transferring all estate, right, title and interest in and to the property and rights sold, but without any covenant or warranty, express or implied. The recitals in such deed of any matters or facts shall be conclusive proof of the truthfulness thereof to the extent permitted by law. Any such sale or sales made under or by virtue of this Section whether made under the power of sale herein granted or under or by virtue of judicial proceedings or of a judgment or decree of foreclosure and sale, shall operate to divest all the estate, right, title, interest, claim and demand whatsoever, whether at law or in equity, of Mortgagor in and to the properties and rights so sold, and shall be a perpetual bar both at law and in equity against Mortgagor and against any and all persons claiming or who may claim the same, or any part thereof from, through or under Mortgagor. (d) In the event of any sale made under or by virtue of this Section whether made under the power of sale herein granted or under or by virtue of judicial proceedings or of a judgment or decree of foreclosure and sale, the entire principal of and interest on the Note and all accrued interest on the Note, and all other sums required to be paid by Mortgagor pursuant to the Note and this Mortgage shall be due and payable, anything in the Note or in this Mortgage to the contrary notwithstanding. (e) The purchase money proceeds or avails of any sale made under or by virtue of this Section, together with any other sums which then may be held by the Mortgagee or Mortgagee under this Mortgage whether under the provisions of this Section or otherwise, shall be applied as directed by Mortgagee, or as required by applicable Wyoming law, if any. (f) Upon any sale made under or by virtue of this Section, whether made under the power of sale herein granted or granted in accordance with the laws of the state in which the Property is located or under or by virtue of judicial proceedings or of a judgment or decree of foreclosure and sale, the Mortgagee may bid for and acquire the Mortgaged Property or any part thereof and in lieu of paying cash therefore may make settlement for the purchase price by crediting upon the indebtedness of Mortgagor secured by this Mortgage the net sales price after deducting therefrom the expenses of the sale and the cost of the action and any other sums which the Mortgagee is authorized to deduct under this Mortgage. The Mortgagee upon so acquiring the Mortgaged Property, or any part thereof shall be entitled to hold, lease, rent, operate, manage and sell the same in any manner provided by applicable laws. 21 000043 000044 5.8 Nonjudicial Power of Sale. As provided under Wyoming Law, Mortgagee shall be entitled to exercise a nonjudicial power of sale in the event of a default. 5.9 Sales of Lots. In the event the Mortgagee shall institute judicial proceedings to foreclose the lien hereof, and shall be appointed as mortgagee -in- possession of the Mortgaged Property, the Mortgagee during such time as it shall be mortgagee -in- possession of the Mortgaged Property pursuant to an order or decree entered in such judicial proceedings, shall have, and Mortgagor hereby gives and grants to the Mortgagee, the right, power and authority to sell any of the lots comprising or a part of the Mortgaged Property "Lots" if the Property has been divided into one or more Lots, for such prices and upon conditions and provisions as such mortgagee -in- possession may deem reasonable. Mortgagor expressly acknowledges and agrees that while the Mortgagee is a mortgagee -in- possession of the Mortgaged Property pursuant to an order or decree entered in such judicial proceedings, such Mortgagee shall be deemed to be and shall be the attorney in fact of Mortgagor for the purpose of selling the Lots for the prices and upon the terms, conditions and provisions deemed reasonable to such Mortgagee and with like effect as if such sales of Lots had been made by Mortgagor as the owner in fee simple of the Mortgaged Property free and clear of any conditions or limitations established by this Mortgage. The power and authority hereby given and granted by Mortgagor to Mortgagee shall be deemed to be coupled with an interest and shall not be revocable by Mortgagor. 5.10 Action by Mortgagee or Agent. Subject to and in accordance with applicable law, any of the actions referred to in this Article IV may be taken by Mortgagee, either in person or by agent, with or without bringing any action or proceeding, or by receiver appointed by a court, and any such action may also be taken regardless of whether any notice of default or election to sell has been given hereunder and without regard to the adequacy of the security for the indebtedness hereby secured. 5.11 Marshalling of Assets. To the extent allowed by applicable law, Mortgagor on Mortgagor's own behalf and on behalf of Mortgagor's successors and assigns hereby expressly waives all rights to require a marshalling of assets by Mortgagee or Mortgagee or to require Mortgagee or Mortgagee to first resort to the sale of any portion of the Mortgaged Property which might have been retained by Mortgagor before foreclosing upon and selling any other portion as may be conveyed by Mortgagor subject to this Mortgage. 5.12 Occupancy by Mortgagor. In the event of a Mortgagee's sale hereunder, if at the time of such sale Mortgagor occupies the portion of the Mortgaged Property so sold or any part thereof, Mortgagor shall immediately become the tenant of the purchaser at such sale, which tenancy shall be a tenancy from day to day, terminable at the will of either the tenant or any such purchaser, at a reasonable rental per day based upon the value of the portion of the Mortgaged Property so occupied, such rental to be due and payable daily to the purchaser. An action of unlawful detainer shall lie if the tenant holds over after a demand in writing from the purchaser for possession of such Mortgaged Property. 5.13 Non Waiver of Default. The entering upon and taking possession of the Mortgaged Property, the collection of any Rents or Profits or other benefits and the application 22 000045 thereof, as aforesaid, shall not cure or waive any default theretofore or thereafter occurring or affect any notice of default hereunder or invalidate any act done pursuant to such notice; and, notwithstanding continuance in possession of the Mortgaged Property, or any part thereof by Mortgagee, Mortgagee or a receiver and the collection, receipt and application of Rents and Profits or other benefits, Mortgagee shall be entitled to exercise every right provided for in this Mortgage or by law upon or after the occurrence of a default, including without limitation the right to exercise the power of the sale. 5.14 Remedies Cumulative. No remedy herein conferred upon or reserved to Mortgagee or Mortgagee is intended to be exclusive of any other remedy herein or by law provided, but each shall be cumulative and shall be in addition to every other remedy given hereunder or now or hereafter existing at law or in equity or by statute. No delay or omission of Mortgagee or Mortgagee to exercise any right or power accruing upon any Event of Default shall impair any right or power or shall be construed to be a waiver of any Event of Default or any acquiescence therein; and every power and remedy given by this Mortgage to Mortgagee or Mortgagee may be exercised from time to time as often as may be deemed expedient by Mortgagee or Mortgagee. If there exists additional security for the performance of the obligations secured hereby, to the extent permitted by law, the holder of the Note, at its sole option, and without limiting or affecting any of the rights or remedies hereunder, may exercise any of the rights and remedies to which it may be entitled hereunder either concurrently with whatever rights it may have in connection with such other security or in such order as it may determine. Nothing in this Mortgage or in the Note shall affect the obligation of Mortgagor to pay the principal of, and interest on, the Note in the manner and at the time and place therein respectively expressed. ARTICLE VI MORTGAGEE PROVISIONS 6.1 Substitution of Mortgagee. From time to time with or without cause for whatever reason, by a writing signed and acknowledged by Mortgagee and filed for record in the Office of the Recorder of the County in which the Mortgaged Property is situated, Mortgagee may appoint another Mortgagee to act in the place and stead of Mortgagee or any successor and such writing shall refer to this Mortgage and set forth the date, book and page of its recordation. The recordation of such instrument of substitution shall discharge the Mortgagee herein named and shall appoint the new Mortgagee as the Mortgagee hereunder with the same effect as if originally named Mortgagee herein. A writing recorded pursuant to this paragraph shall be conclusive proof of the proper substitution of such new Mortgagee. 6.2 Mortgagee's Powers. At any time, or from time to time, without liability therefore and without notice, upon written request of Mortgagee and presentation of the Note secured hereby, and without affecting the personal liability of any person for payment of the indebtedness secured hereby or the effect of this Mortgage upon the remainder of said Mortgaged Property, Mortgagee may (a) release any part of said Mortgaged Property, (b) consent in writing to the making of any map or plat thereof, (c) join in granting any easement 23 000046 thereon, or (d) join in any extension agreement or any agreement subordinating the lien or charge hereof. 6.3 Release. Upon written request of Mortgagee stating that all sums secured hereby have been paid and upon surrender to Mortgagee of this Mortgage and the Note or notes secured hereby for cancellation and retention and payment of its fees, Mortgagee shall release, without warranty, the Mortgaged Property then held hereunder. The recitals in such release of any matters or facts shall be conclusive proof of the truthfulness thereof. The grantee in such release may be described as "the person or persons legally entitled thereto." 6.4 Partial Release. If Mortgagor wishes to sell Lots or other portions of the Property to third parties, Mortgagor shall deliver a request for partial release to the Mortgagee. When Mortgagee receives such a request from Mortgagor, Mortgagee, in its sole discretion, may accept or deny such request for partial release. If Mortgagee, in its sole discretion, elects to accept a request for partial release, then Mortgagee shall release any Lot or portion of the Mortgaged Property subject to this Mortgage as requested in Mortgagor's request for release. 6.5 Indemnification of Mortgagee. Mortgagee may rely on any document believed by Mortgagee in good faith to be genuine. All money received by Mortgagee shall, until used or applied as herein provided, be held in trust or immediately paid and delivered to Mortgagee if requested by Mortgagee, but need not be segregated (except to the extent required by law), and Mortgagee shall not be liable for interest thereon. Mortgagor shall indemnify Mortgagee against all liability and expenses which the Mortgagee may incur in the performance of its duties hereunder, except for Mortgagee's own gross negligence. ARTICLE VII MISCELLANEOUS 7.1 Non Waiver. By accepting payment of any sum secured hereby after its due date or late performance of any indebtedness secured hereby, Mortgagee shall not waive its right against any person obligated directly or indirectly hereunder or on any indebtedness hereby secured, either to require prompt payment when due of all other sums so secured or to declare a default for failure to make payment except as to such payment accepted by Mortgagee. No exercise of any right or remedy by Mortgagee or Mortgagee hereunder shall constitute a waiver of any other right or remedy herein contained or provided by law. (a) No delay or omission of the Mortgagee or Mortgagee in the exercise of any right, power or remedy accruing hereunder or arising otherwise shall impair any such right, power or remedy, or be construed to be a waiver of any default or acquiescence therein. (b) Receipts of rents, awards, and any other monies or evidences thereof, pursuant to the provisions of this Mortgage and any disposition of the same by Mortgagee or Mortgagee shall not constitute a waiver of the power of sale or right of foreclosure by Mortgagee or Mortgagee in the event of a default or 24 failure of performance by Mortgagor of any covenant or agreement contained herein or the Note secured hereby. 000047 7.2 Right to Release. Without affecting the liability of any other person for the payment of any indebtedness herein mentioned (including without limitation Mortgagor should it convey said Mortgaged Property) and without affecting the lien or priority hereof upon any property not released, Mortgagee may, without notice, release any person so liable, extend the maturity or modify the terms of any such obligation, or grant other indulgences, releases or reconveyances or cause to be released or reconveyed at any time all or any part of the Mortgaged Property, take or release any other security or make compositions or other arrangements with debtors. Mortgagee may also accept additional security, either concurrently herewith or hereafter, and sell same or otherwise realize thereon either before, concurrently with, or after sale hereunder. 7.3 Protection of Security. Should Mortgagor fail to make any payment or to perform any covenant as herein provided, Mortgagee (but without obligation so to do and without notice to or demand upon Mortgagor and without releasing Mortgagor from any obligation hereof) may: (a) make or do the same in such manner and to such extent as Mortgagee may deem necessary to protect the security hereof, Mortgagee being authorized to enter upon the Mortgaged Property for such purposes; (b) commence, appear in and defend any action or proceeding purporting to affect the security hereof or the rights or powers of Mortgagee; and /or (c) pay, purchase, contest, or compromise any encumbrance, charge or lien which in the judgment of Mortgagee is prior or superior hereto and, in exercising any such power, incur any liability and expend whatever amounts in its absolute discretion it may deem necessary therefore, including without limitation cost of evidence of title and reasonable attorneys' fee. Any expenditures in connection herewith shall be deemed an Advance and shall constitute part of the indebtedness secured by this Mortgage. 7.4 Rules of Construction. When the identity of the parties hereto or other circumstances make it appropriate, the masculine gender includes the feminine and /or neuter, and the singular number includes the plural. The headings of each article, section or paragraph are for information and convenience only and do not limit or construe the contents of any provision hereof. 7.5 Severability. If any term of this Mortgage or the application thereof to any person or circumstances, shall, to any extent, be invalid or unenforceable, the remainder of this Mortgage, or the application of such term to persons or circumstances other than those as to which it is invalid or unenforceable, shall not be affected thereby, and each term of this Mortgage shall be valid and enforceable to the fullest extent. 7.6 Successors in Interest. This Mortgage applies to, inures to the benefit of, and is binding not only on the parties hereto, but on their heirs, executors, administrators, successors and assigns. All obligations of Mortgagor hereunder are joint and several. The term "Mortgagee" shall mean the holder and owner, including without limitation pledges, of the Note secured 25 000048 hereby, whether or not named as Mortgagee herein and any owner or holder of the beneficial interest under this Mortgage. 7.7 Governing Law. THE TERMS AND PROVISIONS OF THIS MORTGAGE, SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF UTAH. COURTS WITHIN THE STATE OF UTAH SHALL HAVE JURISDICTION OVER ANY AND ALL DISPUTES BETWEEN THE PARTIES HERETO, WHETHER IN LAW OR IN EQUITY, INCLUDING, BUT NOT LIMITED TO, ANY AND ALL DISPUTES ARISING OUT OF OR RELATING TO THIS MORTGAGE; AND VENUE IN ANY SUCH DISPUTE WHETHER IN FEDERAL OR STATE COURT SHALL BE LAID IN SALT LAKE CITY, UTAH. Mortgagor and Mortgagee affirm that the Loan Documents are govern by Utah law except to the limited extent that this Mortgage may be governed by the law of the State where the real property is located solely for purposes of determining whether the transaction transfers or creates an interest in real property for security purposes or otherwise, the nature of an interest in real property that is transferred or created by a transaction, the method for foreclosure of a lien on real property including power of sale foreclosures as may be authorized by statute, the nature of an interest in real property that results from foreclosure, or the manner or effect of recording or failing to record evidence of a transaction that transfers or creates an interest in real property. 7.8 Modifications. This Mortgage may not be amended, modified or changed nor shall any waiver of any provision hereof be effective, except only by an instrument in writing and signed by the party against whom enforcement of any waiver, amendment, change, modification or discharge is sought. 7.9 No Merger. If both the Lessor's and Lessee's estates under any lease or any portion thereof which constitutes a part of the Mortgaged Property shall at any time become vested in one owner, this Mortgage and the lien created hereby shall not be destroyed or terminated by application of the doctrine of merger, and, in such event, Mortgagee shall continue to have and enjoy all of the rights and privileges of Mortgagee as to the separate estates. In addition, upon the foreclosure of the lien created by this Mortgage on the Mortgaged Property pursuant to the provisions hereof, any leases or subleases then existing shall not be destroyed or terminated by application of the law of merger or as a matter of law or as a result of such foreclosure unless Mortgagee or any purchaser at any such foreclosure sale shall so elect. No act by or on behalf of Mortgagee or any such purchaser shall constitute a termination of any lease or sublease unless Mortgagee or such purchaser shall have given written notice thereof to such tenant or subtenant. 7.10 Attorneys' Fees. Mortgagor shall pay all of Mortgagee's attorneys' fees with regard to this transaction including, but not limited to fees incurred for preparing loan documents, advice relating to administration of the Loan, title work, due diligence, and /or litigation relating to enforcement of the rights of the Lender in any way. Lender shall be entitled to pay or withhold a portion of the loan proceeds and to pay the same to Lender's attorneys as an advance for such costs or for any other costs or purpose that Lender determines, in Lender's sole 26 discretion, is necessary or proper, regardless of whether such costs relate directly or indirectly to the Loan or closing of the Loan. Additionally and without limiting the foregoing, if Mortgagee incurs any costs or expenses, including without limitation attorneys' fees, for any of the following relating to this Mortgage (or any other instrument evidencing or securing this loan): (a) the interpretation, performance or enforcement thereof; (b) the enforcement of any statute, regulation or judicial decision; (c) any collection effort; or (d) any suit or action for the interpretation, performance or enforcement thereof is commenced or defended, or, if any other judicial or nonjudicial proceeding is instituted by Mortgagee or any other person, and an attorney is employed by Mortgagee to appear in any such action or proceeding, or to reclaim, seek relief from a judicial or statutory stay, sequester, protect, preserve or enforce Mortgagee's interest in this Mortgage or any other security for the Note, including without limitation but not limited to proceedings under federal bankruptcy law, in eminent domain, under the probate code, or in connection with any state or federal tax lien, then Mortgagor agrees to pay the reasonable attorneys' fees "reasonable" being the usual hourly billing rates charged by Mortgagee's attorneys) and costs thereof, regardless of whether suit or action is commenced or defended as to (a), (b), and (c). Such fees and costs shall be added to the principal of the Note and shall bear interest at the Default Rate. The foregoing notwithstanding, in any action commenced by Mortgagor or Mortgagee against the other to enforce the provisions of this Mortgage or any other instrument evidencing or securing this loan, the prevailing party of such action shall be entitled to recover its reasonable attorneys' fees (as set forth above) from the non prevailing party and the non prevailing party shall not be entitled to recover its attorneys' fees. 7.11 Conflict. If the term of any other Loan Document, except the Note, shall be in conflict with this Mortgage, then this Mortgage shall govern to the extent of the conflict. If the term of this Mortgage shall be in conflict with the Note, the Note will then govern to the extent of the conflict. 7.12 Notices. All notices to be given pursuant to this Mortgage shall be sufficient if given by personal service, by guaranteed overnight delivery service, by telex, telecopy or telegram or by being mailed postage prepaid, certified or registered mail, return receipt requested, to the described addresses of the parties hereto as set forth below, or to such other address as a party may request in writing. Any time period provided in the giving of any notice hereunder shall commence upon the date of personal service, the date after delivery to the guaranteed overnight delivery service, the date of sending the telex, telecopy or telegram or two (2) days after mailing certified or registered mail. MORTGAGOR'S ADDRESS: MORTGAGEE'S ADDRESS: STEVE TURLEY 1480 S. State Provo, Utah 84606 RIDGELINE CAPTIAL, LLC P.O. Box 636 Provo, Utah 84603 27 000049 000050 7.13 Request for Notice of Default. Mortgagor requests that a true and correct copy of any notice of default and any notice of sale be sent to Mortgagor at the address set forth in Section 7.12 hereof. 7.14 Late Charges. As set forth and defined in the Note, there shall be due to Mortgagee a Late Charge of ten percent (10 of the then outstanding amount due under this Note if any payment which is not received on a timely basis by Mortgagee so as to incur a Late Charge, and all such Late Charges are secured hereby. 7.15 Non Assumption. Notice is hereby given that Mortgagor's obligations under this Mortgage may not be assumed except as permitted by Section 3.11 hereof. Any transfer of Mortgagor's interest in the Mortgaged Property or any attempted assumption of Mortgagor's obligations under the Mortgage not so approved shall constitute a default hereunder and shall permit Mortgagee to accelerate the Maturity Date of the Note. Reference to applicable sections of the Loan Documents must be made for the full text of such provisions. 7.16 Waivers /Further Acknowledgements. TO THE FULLEST EXTENT ALLOWED BY LAW, MORTGAGOR HEREBY WAIVES AND DISCLAIMS ANY AND ALL CLAIMS, DISSENT OR OBJECTION TO THE TERMS OR ENFORCEABILITY OF THE LOAN DOCUMENTS ON THE GROUNDS THAT THE LOAN DOCUMENTS OR THE TERMS THEREOF ARE UNCONSCIONABLE, VIOLATE PUBLIC POLICY OR ARE OTHERWISE UNENFORCEABLE ACCORDING TO THEIR TERMS. MORTGAGOR IS REPRESENTED BY LEGAL COUNSEL. MORTGAGOR UNDERSTANDS THAT THE INTEREST RATE AND FEES CHARGED HEREIN EXCEED STANDARD COMMERCIAL INTEREST RATES AND FEES AND THAT THE MORTGAGEE AND MORTGAGOR HAVE AGREED TO THESE RATES AND FEES DUE TO THE NATURE OF THE TRANSACTION. 7.17 Jury Waiver. MORTGAGOR HEREBY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING RELATING TO THIS MORTGAGE, THE NOTE AND TO ANY OF THE LOAN DOCUMENTS, THE OBLIGATIONS HEREUNDER OR THEREUNDER, ANY COLLATERAL SECURING THE OBLIGATIONS, OR ANY TRANSACTION ARISING THEREFROM OR CONNECTED THERETO. MORTGAGOR REPRESENTS THAT THIS WAIVER IS KNOWINGLY, WILLINGLY AND VOLUNTARILY GIVEN. 28 000051 IN WITNESS WHEREOF, the undersigned has caused this instrument to be signed on the date set forth below, to be effective as of the date first above written. Date: 29 MORTGAGOR: 7 STEVE URLEY ACKNOWLEDGMENT STATE OF UTAH COUNTY OF a-417 000052 On November X2/4, 2010 before me, 4:/ !A C.- personally appeared STEVE TURLEY, personally known to me (or proved on the bases of satisfactory evidence) to the person whose name is subscribed to the within instrument and acknowledged to me that he executed the same in his authorized capacity, and that by his signature on the instrument the person, or the entity upon behalf of which the person acted, executed the instrument. S ignature ,7-- WITNESS my hand and official seal. 30 (Seal) MICHAEL A. CRAN ALL TmvPUEUMa1EaFUTm 106 EAST 300 SOUTH PROVO, UTAH 54000 COMM. EXR 12011 EXHIBIT A Description Of Real Property 000053 11/29/2010 16:46 307 733 -6196 HICKMIAN LANDTITLE PAGE 01/01 File Number; 61448 Turd Titic Company warranty Deed (Individual) Pigc2 cif 2 EXHIBIT "A" 000054 PARCEL 1..A: BEGINNING at the South Quarter corner of Section 29, Township 37 North, Range 118 West of the 6 t1i P.M., Lincoln County, Wyoming and running thence West, 2,046 feet, to a point; Thence North, 680 feet, more or less, to a point; Thence North 78 °01' East, 475 feet, more or less, to the Southwest corner of Lot 310 of Lake View Estates Subdivision; Thence East., 90 feet, more or Jess, to a point; Thence North, 125 feet, to the Southwest corner of Lot 309 of Lake View Estates Subdivision; Thence North 90 °00' East, 127 feet, to the Southeast comer of said Lot 309; Thence North 85 °00' East, 117 feet, more or less, to the Southeast corner of Lot 308 of Lake View Estates Subdivision; Thence East, 800 feet, more or less; Thence South, 120 feet; Thence East, 460 feet, more or less, to point on the North -South Center line; Thence South, 750 feet, more or less, to the Point of Beginning. PARCEL 1 B: A tract of land in the Southwest Quarter of the Southwest Quarter (SW SW /a) of Section 29, Township 37 North, Range 118 West of the 6"' P.M., Lincoln County, Wyoming, described as :follows; COMMENCING West, 2,046 feet and North 00 °07' West, 830 'feet, from the South Quarter corner of said Section 29, the POINT OF BEGINNING; Thence North 75 °50° East, 290 feet; Thence South 00 °00' East, 150 feet; Thence South 75 °50' West, 290 feet; Thence North 00 °07' West, 150 :feet, to the Point of Beginning. PARCEL 2; BEGINNING at the South One- Quarter corner of Section 29, Township 37 North, Range 118 West of the 6` P.M., Lincoln County, Wyoming, marked with a Government brass cap; Thence North 23 °37'00" East, 40.46 feet, to the South corner of Grand View Enterprises Subdivision; Thence North 00 °30'00" East, 1,320 feet, along the West line of said Subdivision, to a point, 14.61 feet South, on said line from a brass cap; Thence West, 15.14 feet, to a point on the East line of the SW of said Section 29; Thence South 00 °341 1" West, 1,342.76 feet, along th.e East line of Grant. 1. Morris property, described in Warranty Deed recorded August 9, 1979, in Book 158 P.R.., on Page 465, to the S'/ corner of said Section 29, to the Point of Beginning. PARCEL 3: A tract of land in the Southeast Quarter of the Southwest. Quarter (SE 'A SW t/.) of Section 29, Township 37 North, Range 118 West of the 6 111 P.M., Lincoln County, Wyoming, described as follows: BEGINNING 50 :feet East of the Southwest corner of Lot 724 of Lake View Estates Ninth Addition and running thence East, 300 feet; Thence South, 200 feet; Thence West, 300 feet; Thence North, 200 feet, to the Point of Beginning. LESS AND EXCEPTING any land previous conveyed or lying within Grandview Enterprises Subdivision, Lake View Estates Subdivision and Lake View Estates Ninth Addition.