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HomeMy WebLinkAbout886667RECORDATION REQUESTED BY: Western United Life Assurance Company, a Washington corporation 601 W. 1st Ave., Dept. 171000 Spokane, Washington 99201 WHEN RECORDED MAIL TO: Western United Life Assurance Company File No. 50001854 601 W. 1st Ave., Dept. 171000 Spokane, Washington 99201 SEND TAX NOTICES TO: Seven C Enterprises Inc., a Wyoming corporation Attn: Bentley D, Wilson, COO 4692 North 300 West, Suite 100 Provo, Utah 84606 886667 RECEIVED LINCOLN COUNTY CLERK BOOK ...... - PR PAGE SPACE ABOVE THIS LINE IS FOR RECORDER'S USE ONLY MORTGAGE MAXIMUM LIEN. The lien of this Mortgage shall not exceed at any one time $13,779,500. 00 THIS MORTGAGE dated December 30 ., 2002, is .made and executed between Speeay Turtle Petroleum, Inc., a Utah corporation, whose address.is At-tn: Bentley. D. Wilson, COO, 4692 North 300 West, 'Suite 100, Provo, Utah 84606 (referred to below as "Borrower"); Seven C Enterprises Inc., a Wyoming corporation, whose address is Attn: Bentley D. Wilson, COO, 4692 North 300 West, Suite .100, Provo, Utah 84606 (referred to below as "Grantor"); and Western United Life Assurance Company, a Washington corporation, whose address is 601W. 1 st Ave., Dept. 17 ! 000, Spokane, Washington 99201 (referred to below as "Lender"). THIS MORTGAGE IS INTENDED ALSO AS A FIXTURE FILING AND IS TO BE INDEXED NOT ONLY AS A MORTGAGE BUT ALSO AS A FIXTURE FILING. GRANT OF MORTGAGE. For valuable consideration, Grantor mortgages, grants, and conveys to Lender all of Grantor's right, title, and interest in and to the following described real property, together with a!l existing or subsequently erected or affixed buildings, improvements and fixtures; all appliances, furniture and furnishings affixed to the real property; all easements, fights of way, and appurtenances; all water, water fights, watercourses and ditch fights (including stock in utilities with ditch or irrigation rights); all requisite approvals, licenses, variances, cooperative agreements, tax credits, tax abatements, and land use entitlements; and all other fights, royalties, and profits relating to the real property, including without limitation all minerals, timber, oil, gas, geothermal and similar matters, recording engineering and entitlement maps, and all land-use entitlements, tax abatement benefits (if available) and tax credits (the "Real Property") located in Sweetwater, Lincoln, and Uinta Counties, State of Wyoming: See EXHIBIT A, which is attached to this Mortgage and made a part of this Mortgage as if fully set forth herein. Grantor presently assigns to Lender all of Grantor's fight, title, and interest in and to ail present and future leases of the Property and all Rents from the Property. In addition, Grantor grants to Lender a Uniform Commercial Code security interest in the Personal Property and Rents. Page 1 MORTGAGE C:\DOCUMENTS AND SETTINGS\KVANHOUIENM./XTAL SETTINGS\TEMPORARY INT£RN£I FILES\CONTENT.IE55WR~gGD4PX7C-MORTGAGE. WYO3[IIDOC 12/27/02 GI~NTOR REPI~SENTS THAT THE REAL PROPERTY IS NOT PRINCIPALLY IMPROVED OR TO BE IMPROVED BY ONE OR TWO FAMILY DWELLINGS. DEFINITIONS. The following capitalized words and terms shall have the following meanings when used in this Mortgage. Unless specifically stated to the contrary, all references to dollar amounts shall mean amounts in lawful money of the United States of America. Words and terms used in the singular shall include the plural, and the plural shall include the singular, as the context may require. Words and terms not otherwise defined in this Mortgage shall have the meanings attributed to such terms in the Uniform Commercial Code: Borrower. The word "Borrower" means Speedy Turtle Petroleum, Inc., a Utah corporation, and alt other persons and entities signing the Note in whatever capacity. Default. The word "Default" means the Defauit Set forth in this Mortgage in the section titled "Default". Environmental Laws. The words "Environmental Laws" mean any and all state, federal and :local statutes, regulations and ordinances relating to the protection of human health or the environment, including without limitation the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended, 42 U.S.C. Section 9601, et seq. ("CERCLA"), the Superfund Amendments and Reauthorization Act of 1986, Pub. L. No. 99-499 ("SARA"), the Hazardous Materials Transportation Act, 49 U.S.C. Section 1801, et seq., the Resource Conservation and Recovery Act, 42 U.S.C. Section 6901, et seq., or other applicable state or federal laws, rules, or regulations adopted pursuant thereto. Event of Default. The words "Event of Default" mean 'any of the Events of Default set forth in this Mortgage in the Events of Default section of this Mortgage. Grantor. The word "Grantor" means Seven C Enterprises Inc., a Wyoming corporation. Guaranty. The word "Guaranty" means the guaranty from guarantor, endorser, surety, or accommodation party to Le. nder, 'including without limitation a guaranty of all or part of the Note. Hazardous Substances. The words "Hazardous Substances"' mean materials that, because of their quat~tity, con6entration or physical chemical or infectious characteristics, may cause or pose a present or potential hazard to human health or the environment when improperly used, treated, stored, disposed of, generated, manufactured, transported or otherwise handled. The words "Hazardous Substances" are used in their very broadest sense and include without limitation any and all hazardous or toxic substances, materials or waste as defined by or listed under the Environmental Laws. The term "Hazardous Substances" also includes, without limitation, petroleum and petroleum by-products or any fraction thereof and asbestos. Improvements. The word "Improvements" means all existing and future improvements, buildings, structures, mobile homes affixed on the Real Property, facilities, additions, replacements and other construction on the Real Property. Indebtedness. The word "Indebtedness" means all principal, interest, and other amounts, costs and expenses payable under the Note or Related Documents, together with all renewals of, extensions of, modifications of, consolidations of and substitutions for the Note or Related Documents and any amounts expended or advanced by Lender to discharge Grantor's obligations or expenses incurred by Lender to enforce Grantor's obligations under this Mortgage, including attorneys' fees, together with interest on such amounts as provided in this Mortgage. Lender. The word "Lender" means Western United Life Assurance Company, a Washington corporation, its successors and assigns. Mortgage. The word "Mortgage" means this Mortgage between Grantor and Lender. Note. Thc word "Note" means the promissory note dated December 30 ,2002, in the original principal amount of Thirteen Million Seven Hundred Seventy-Nine Thousand Five Hundred and 00/100 Dollars ($13,779,500.00) from Borrower to Lender, together with all renewals of, extensions of, modifications of, refinancings Page 2 - MORTGAGE C:\DOCUMENIS AND SETTINGS\KVANHOUTENXLOCAL SETtINGS\TEMPORARY INTERNET FILESXCONTENT I E~WREOGD4P~7C-MORTGAGE.WYO3[ I ] DOC 12/27/02 G82 of, consolidations of, and substitutions for the promissory note or agreement. The maturity date of this Mortgage is January 1, 2004. Personal Property. The words "Personal Property" mean all equipment, fixtures, and other articles of personal property now or hereafter owned by Grantor, and now or hereafter attached or affixed to the Real Property; together with all accessions, parts, and additions to, all replacements of, and all substitutions for, any of such property; and together with all proceeds (including without limitation all insurance proceeds and refunds of premiums) from any sale or other disposition of the Property. Property. The word "Property" means collectively the Real Property and the Personal Property. Real Property. The words "Real Property" mean the real property, interests and rights, as further described in this Mortgage. Related Documents. The words "Related Documents" mean all promissory notes, credit agreements, loan agreements, environmental agreements, guaranties, security agreements, mortgages, deeds of trust, security, deeds, collateral mortgages, and all other instruments, agreements and documents, whether now or hereafter existing, executed in connection with the Indebtedness. Rents. The word "Rents" means all present and future rents, revenues, income, issues, royalties, profits, and other benefits derived from the Property. THIS MORTGAGE, INCLUDING THE ASSIGNMENT OF RENTS AND THE SECURITY INTEREST IN THE . RENTS AND PERSONAL PROPERTY, IS GIVEN TO SECURE (A) PAYMENT OF THE INDEBTEDNESS AND (B) PERFORMANCE OF .aAN'Y AND ALL OBLIGATIONS UNDER THE NOTE, THE RELATED DOCUMENTS, AND THIS MORTGAGE. THIS MORTGAGE IS GIVEN AND ACCEPTED ON THE 'FOLLOWING TERMS: PAYMENT AND PERFORMANCE.. Except as otherWise provided in this Mortgage, Borrower shall pay to Lender all amounts secured by this Mortgage as they become due, and Grantor shall strictly pedbrm all of Grantor's obligations under this Mortgage. POSSESSION AND MAINTENANCE OF THE PROPERTY. Grantor agrees that Grantor's possession and use of the Property shall be governed by the following provisions: Duty to Maintain. Grantor shall maintain the Property in tenantable condition and promptly perform all repairs, replacements, and maintenance necessary to preserve its value. Compliance With Environmental Laws. Except as disclosed to and acknowledged by Lender in writing, Grantor represents and warrants to Lender that: (1) During the period of Grantor's ownership of the Property, there has been no use, generation, manufacture, storage, treatment, disposal, release or threatened release of any Hazardous Substance by any person on, under, about or from the Property; (2) Grantor has no knowledge of, or reason to believe that there has been, except as previously disclosed to and acknowledged by Lender in writing, (a) any breach or violation of any Environmental Laws, (b) any use, generation, manufacture, storage, treatment, disposal, release, or threatened release of any Hazardous Substance on, under, about or from the Property by any prior owners or occupants of the Property; or (c) any actual or threatened litigation or claims of any kind by any person relating to such matters; and (3) Except as previously disclosed to and acknowledged by Lender in writing, (a) neither Grantor nor any tenant, contractor, agent or other authorized user of the Property shall use, generate, manufacture, store, treat, dispose of, or release any Hazardous Substance on, under, about or from the Property; and Co) any such activity shall be conducted in compliance with all applicable federal, state, and local laws, regulations and ordinances, including without limitation all Environmental Laws. Grantor authorizes Lender and its agents to enter upon the Property to make such inspections and t~ests, at Grantor's expense, as Lender may deem appropriate to determine compliance of the Property with this section of the Mortgage. Any inspections or tests made by Lender shall be for Lender's purposes only and shall not be construed to create any responsibility or liability on the part of Lender to Grantor or to any other person. The representations and warranties contained herein are based on Grantor's due diligence in investigating the Property for Hazardous Substances. Grantor hereby (1) releases and waives any future claims against Lender for indemnity or Page 3 - MORTGAGE c:x~ocu~Ems ^ND sErrn~as~cv~.otrr~oc^[ s~rrmoswmm~,av n, rr~a~-t ~rmcom~m.~e~xwaem~mc-~ogm^~-wvo~m.voc contribution in the event Grantor becomes liable for cleanup or other costs under any such laws, and (2) agrees to indemnify and hold harmless Lender against any and all claims, losses, liabilities, damages, penalties, and expenses which Lender may directly or indirectly sustain or suffer resulting from a breach of this section of the Mortgage or as a consequence of any use, generation, manufacture, storage, disposal, release or threatened release occurring prior to Grantor's ownership or interest in the Property, whether or not the same was or should have been known to Grantor. The provisions of this section of the Mortgage, including the obligation to indemnify, shall survive the payment of the Indebtedness and the satisfaction and reconveyance of the lien of this Mortgage and shall not be affected by Lender's acquisition of any interest in the Property, whether by foreclosure or otherwise. Nuisance, Waste. Grantor shall not cause, conduct or permit any nuisance nor commit, permit, or suffer any stripping of or waste on or to the Property or any portion of the Property. Without limiting the generality of the foregoing, Grantor will not remove, or grant to any other party .the tight to remove, any timber, minerals (including oil and gas), coal, clay, scoria, soil, gravel or rock products without Lender's prior written consent. Removal of Improvements. Grantor shall not demolish or remove any Improvements from the Real Property without Lender's prior written consent. As a condition to the removal of any Improvements, Lender may require Grantor to make arrangements satisfactory to Lender to replace such Improvements with Improvements of at least equal value. Lender's Right to Enter. Lender and Lender's agents and representatives may enter upon the Real Property at all reasonable times to attend to Lender's interests and to inspect the Real Property for purposes of Grantor's compliance with the terms and conditions of this Mortgage. Compliance with Governmental Requirements. Grantor shall promptly comply with all laws, ordinances, and regulations, now or hereafter ie effect, of all govemmental authorities applicable to the use or occupancy of the Property, including without limitation, the Americans With Disabilities Act. Grantor may contest in good faith any a'ach law, ardi~ance, or regulation and withhold compliance during any proceeding, including, appropriate appeals, so long as Grantor has notified Lender in writing prk~r to doing so and so long as, m Lender's sole opinion, Lender's interests in the Property are not jeopardized. Lender may require Grantor to post a~3equa~e security or a surety bond, rer~sonably satisfactory to Lender, to protect Lender's interest. Duty to Protect. Grantor agrees neither to abani:lon nor leave unattended the Property. Grantor shall do all other acts, in addition to those acts set forth above in this section, which from the character and use oftl-.e Property are reasonably necessary to protect and preserve the Property. RELEASE PROVISIONS. Grantor anticipates that it may attempt to sell some of the parcels (the "Parcel" or "Parcels") comprising the Property to various purchasers. Provided that no Event of Default exists, Grantor may request the release of the lien of this Mortgage and of any other instrument securing the Note from the Parcels described in this section upon satisfaction of all of the following conditions precedent: (a) All state, county, municipal, or other requirements regarding the sale of the Parcels shall have been satisfied and evidence thereof provided to Lender; (b). The release shall be in connection with the sale of a Parcel to a bona fide purchaser for value; (c) The purchaser of a Parcel shall have paid the full purchase price of that Pamel in cash and Lender shall have been paid the full release price (the "Release Price") calculated as follows: The greater of one hundred percent (100%) of the "Net Sale Proceeds" (as that term is defined below) or eighty percent (80%) of the approved value (the "Approved Value") as specified below. As used herein, "Net Sale Proceeds" shall mean the full purchase price for a Parcel less all customary closing costs not to exceed ten percent (10%) of the gross sale price. The Net Sale Proceeds from the sale of a Parcel cannot be less than the minimum release price (the "Minimum Release Price") as specified below for such Parcel. In the event there are insufficient sales proceeds to pay the Release Price required above, Borrower shall pay the shortfall to Lender as an additional condition to the Parcel release. The Approved Values and Minimum Release Prices for the Parcels are as follows: Page 4 - MORTGAGE c:~mcu~ts ^~o s~rrn~as~v^s,outmtoc^t strrnqasxtm~o~v r~t~T n~mcom~m.~£~w~ammmc-~o~m^aa-wvmI~l.voc For the Parcel located at 1620 Elk Street, Rock Springs, Wyoming 82901 -the Approved Value is Three Million Two Hundred Twenty Thousand and 00/100 Dollars ($3,220,000.00) and the Minimum Release Price is Two Million Five Hundred Seventy-Six Thousand and 00/100 Dollars ($2,576,000.00); ii. For the Parcel located at 749 Overthrust Road, Evanston, Wyoming 82930 - the Approved Value is Six Hundred Ten Thousand and 00/100 Dollars ($610,000.00) and the Minimum Release Price is Four ttundred Eighty-Eight Thousand and 00/100 Dollars ($488,000.00); 111, For the Parcel located at 301 Washington Street, Afion, Wyoming 83110 - the Approved.Value is Nine Hundred Ten Thousand and 00/100 Dollars ($910,000.00) and the Minimum Release Price is Seven Hundred Twenty-Eight Thousand and 00/100 Dollars ($728,000.00); (d) Lender shall have received suzh endorsements to its policy of title insurance insunng the continuing priority lien of this Moprtgage as Lender may require in its sole discretion; (e) Lender shall have received a written request for the partial release together with such documents and information as Lender may reasonably request to verify that the conditions for such release have been satisfied, including but not limited to, a copy of the purchase contract and escrow closing statement. After receipt of such notice and the satisfaction of.all conditions precedent for the partial release, including, but not limited to, the delivery of the full Release Payment or written authorization to the escrow company handling the closing of such Parcel to pay such Release Payment to Lender at closing, Lender shall deliver to the escrow company handling the closing a standard form "Request for Partial Release" for the Parcel to be released, executed by Lender; All costs and expenses of Lender relating to all partial releases shall be paid by Grantor, including but not limited to satsifaction and reconveyanee fees, title fees. recording t~es, and legal expenses; (g) No partial release 'shall impair or adversely affect Lender's security in the Property remaining subject to this Mortgage or any term or provision of this Mortgage as it pertains to the Property remaining subject to this Mortgage; and : '(h) The release of the subject Parcels shall not affect access to the remaining Parcels'subject to this Mortgage. DUE ON SALE - CONSENT BY LENDER. Lender may, at its option, (a) declare immediately due and payable all sums secured by this Mortgage or Co) increase the interest rate provided in the Note or other, document evidencing the indebtedness and impose such other conditions as Lender deems appropriate, upon the sale or transfer, without the Lender's prior written consent which consent shall not be unreasonably withheld, of all or any part of the Real Property, or any interest in the Real Property. A "sale or transfer" means the conveyance of Real Property or any right, title or interest therein; whether legal or equitable; whether voluntary or involuntary; whether by outfight sale, deed, installment sale contract, land contract, contract for deed, leasehold interest with a term greater than three (3) years, lease-option contract, or by sale, assignment, or transfer of any beneficial interest in or to any land trust holding title to the Real Property, or by any other method of conveyance of Real Property interest. If any Grantor is a corporation or partnership or limited liability company, transfer also includes any change in ownership of more than twenty-five percent (25 %) of the voting stock or partnership interests or membership interests, as the case may be, of Grantor. However, this option shall not be exercised by Lender if such exercise is prohibited by federal law. TAXES AND LIENS. The following provisions relating to the taxes and liens on the Property are part of this Mortgage: Payment. Grantor shall pay when due (and in all events prior to delinquency) all taxes, payroll taxes, special taxes, assessments, water charges and sewer service charges levied against or on account of the Property, and shall pay when due all claims for work done on or for services rendered or material furnished to the Property. Grantor shall maintain the Property free of all liens having priority over or equal to the interest of Lender under this Mortgage, except fOr the lien of taxes and assessments not due, and except as otherwise provided in the following paragraph. Page 5 - MORTGAGE C:~DOCUMENTS AND SETTINGS\KVANHOUTEN~LOCAL SETTINGS\TEMPORARY INTERNET FILES\CONTENT.IES~WRE9GD4P\7C-MORTGAGE.WYO3[ 1 ].DOC 12/27/02 Right to Contest. Grantor may withhold payment of any tax, assessment, or claim in connection with a good faith dispute over the obligation to pay, so long as Lender's interest in the Property is not jeopardized. Ifa lien arises or is filed as a result of nonpayment, Grantor shall within fifteen (15) days after the lien arises or, if a lien is filed, within fifteen (15) days after Grantor has notice of the filing, secure the discharge of the lien, or if requested by Lender, deposit with Lender cash or a sufficient corporate surety bond or other security satisfactory to Lender in an amount sufficient to discharge the lien plus any costs and reasonable attorneys' fees, or other charges that could accrue as a result of a foreclosure or sale under the lien. In any contest, Grantor shall defend itself and Lender and shall satisfy any adverse judgment before enforcement against the Property. Grantor shall name Lender as an additional obligee under any surety bond furnished in the contest proceedings. Evidence of Payment. Grantor shall upon demand furnish to Lender satisfactory evidence of payment of the taxes or assessments and shall authorize the appropriate governmental official to deliver to Lender at any time a written statement of'the taxes and assessments against the Property. · Notice of Construction. Grantor shall notify Lender at least fifteen (15) days before any work is commenced, any services are fumished, or any materials are supplied to the Property, if any mechanic's lien, materialmen's lien, or other lien could be asserted on account of the work, services, or materials and the cost exceeds $5,000.00. Grantor will upon request.of Lender furnish to Lender advance assurances satisfactory to Lender that Grantor can and will pay the cost of such improvements. PROPERTY DAMAGE INSURANCE. The following provisions relating to insuring the Property are a part of this Mortgage: Maintenance of Insurance. Grantor shall procure and maintain policies of fire insurance with standard extended coverage endorsements on a replacement basis for the full insurable value covering all'Improvements on the P.eal Property in an amount sufficient to avoid application of any coinsurance clause, and with a standard mortgagee clause in favor of Lender. Grantor shall also procure and maintain comprehensive general liability insurance iff ',~uch coverage amounts as Lender may request with Lender being.named as additional i'nsureds in such liability insurance policies. Additionally, Grantor shall maintain such other insurance, including but not limited to hazard, business interruption and boiler insurance as Lender may require. Policies shall be written by such insurance companies and in such form. as may be reasonably acceptable to Lender. Grantor shall deliver to Lender certificates of zoverage from each insurer containing a stipulation that coverage will not be cancelled or diminished without a minimum of ten (10) days' prior written notice to Lender and not containing any disclaimer of the insurer's liability for failure to give such notice. Each insurance policy also shall include an endorsement providing that coverage in favor of Lender will not be impaired in any way by any act, omission or default of Grantor or any other person. Should the Real Property be located in an area designated by the Director of the Federal Emergency Management Agency as a special flood hazard area, Grantor agrees to obtain and maintain Federal Flood Insurance, if available, within 45 days after notice is given by Lender that the Property is located in a special flood hazard area, for the full unpaid principal balance of the loan and any prior liens on the property securing the loan, up to' the maximum policy limits set under the National Flood Insurance Program, or as otherwise required by Lender, and to maintain such insurance for the term of the loan. Application of Proceeds. Grantor shall promptly notify Lender of any loss or damage to the Property if the estimated cost of repair or replacement exceeds $5,000.00. Lender may make proof of loss if Grantor fails to do so within fifteen (15) days of the casualty. Whether or not Lender's security is impaired, Lender may, at Lender's election, receive and retain the proceeds of any insurance and apply the proceeds to the reduction of the Indebtedness, payment of any lien affecting the Property, or the restoration and repair of the Property. If Lender elects to apply the proceeds to restoration and repair, Grantor shall repair or replace the damaged or destroyed Improvements in a manner satisfactory to'Lender. Lender shall, upon satisfactory proof of such expenditure, pay or reimburse Grantor from the proceeds for the reasonable cost of repair or restoration if Grantor is not in default under this Mortgage. Any proceeds which have not been disbursed within 180 days after their receipt and which Lender has not committed to the repair or restoration of the Property shall be used first to pay any amount owing to Lender under this Mortgage, then to pay accrued interest, and the remainder, if any, shall be applied to the principal balance of the Indebtedness. If Lender holds any proceeds after payment in full of the Indebtedness, such proceeds shall be paid to Grantor as Grantor's interests may appear. Page 6 - MORTGAGE C:\DOCUMENTS AND SETTINGS\KVANHOUTENXLOCAL SE'I-rINGS\TEMPORARY INTERNET FILES~,CONTENT.IES~WRE9GD4P\TC-MORTGAGE_WYO3[i} DOC 12/27/02 Unexpired Insurance at Sale. Any unexpired insurance shall inure to the benefit of, and pass to, the purchaser of the Property covered by this Mortgage at any trustee's sale or other sale held under the provisions of this Mortgage, or at any foreclosure sale of such Property. Grantor's Report on Insurance. Upon request of Lender, however not more than once a year, Grantor shall furnish to Lender a report on each existing policy of insurance showing: (1) the name of the insurer; (2) the risks insured; (3) the amount of the policy; (4) the property insured, the then current replacement value of such property, and the manner of determining that value; and (5) the expiration date of the policy. Grantor shall, upon request of Lender, have an independent appraiser satisfactory to Lender determine the cash value replacement cost of the Property. TAX AND INSURANCE RESERVES. Subject to any limitations set by applicable law, Lender may require Grantor to maintain with Lender reserves for payment of annual taxes, assessments, and insurance premiums, which reserves shall be created by advance payment or monthly payments of a sum estimated by Lender to be sufficient to produce, amounts at least equal to the taxes, assessments, and insurance premiums tO be paid. The reserve funds shall be held by Lender as a general deposit fi.om Grantor, which Lender may satisfy by payment of the taxes, assessments, and insurance premiums required to be paid by Grantor as they become due. Lender shall have the fight to draw upon the reserve funds to pay such items, and Lender shall not be required to determine the validity or accuracy of any 'item before paying it. Nothing in the Mortgage shall be construed as requiring Lender to advance other monies for such purposes, and Lender shall not incur any liability for anything it may do or omit to do with respect to the reserve account. Subject to any limitations set by applicable law, if the reserve funds disclose a shortage or deficiency, Grantor shall pay such shortage or deficiency as required by Lender. All amounts in the reserve account are hereby pledged to further secure the Indebtedness, and Lender is hereby authorized to withdraw and apply such amounts on the Indebtedness upon the occurrence of an Event of Default. LENDER'S EXPENDITURES. if any actio~l or proceeding is.ccmmenced that would-materially affect Lender'3 tnterest in ' the Property or if Grantor fails to comply with any provision of this Mortgage or any Related Documents, including but not limited to. Grantor's failure to discharge or pay when due any amounts Grantor is required to dischmge or pay under this Mortgage or any Related Documents, Lender on Grantor's behalf may (but shall not be obligated to) take any action that Lender · deems appropriate, inciuding but not linfited to discharging or paying all taxes, lien~, secarity interests, encumbrances and otEer claims, at any time levied or placed on the Prope,rt~. - and pay/ng all costs for insuring, maintaining and preserving the Property All such expenditures incurred or paid by Lender for such purposes will then bear interest at the rate chai:ged under the Note from the date incurred or paid by Lender to the d~.te of repayment by Grantor. All such expenses will become a part of the Indebtedness and, at Lender's option? will (A) be payable on demand, (B) be added to the balance of. the Note and be apportioned among and be payable with any installment payments to become due during either (1) the term of any applicable insurance policy, (2) the remaining term of the Note, or (3) be treated as a balloon payment which will be due and payable at · the Note's matarity. The Property also will secure payment of these amounts. Such right shall be in additmn to all other rights and remedies to which Lender may be entitled upon Default. WARRANTY; DEFENSE OF TITLE. The following provisions relating to Ownership of the Property are a part of this Mortgage: Title. Grantor warrants that: (a) Grantor holds good and marketable title of record to the Property in fee simple, free and clear of all liens and encumbrances other than those set forth in the Real Property description or in any title insurance policy, title report, or final title opinion issued in favor of, and accepted by, Lender in connection with this Mortgage, and (b) Grantor has the full right, power, and authority to execute and deliver this Mortgage to Lender. Defense of Title. Subject to the exception in the paragraph above, Grantor warrants and will forever defend the title to the Property against the lawful claims of all persons. In the event any action or proceeding is commenced that questions Grantor's title or the interest of Lender under this Mortgage, Grantor shall defend the action at Grantor's expense. Grantor may be the nominal party in such proceeding, but Lender shall be entitled to participate in the proceeding and to be represented in the proceeding by counsel of Lender's own choice, and Grantor will deliver, or cause to be delivered, to Lender such instruments as Lender may request from time to time to permit such participation. Compliance With Laws. Grantor warrants that the Property and Grantor's use of the Property complies with all existing applicable laws, ordinances, and regulations of governmental authorities. Page 7 - MORTGAGE C:XDOCUMENTS AND SETTINGS\KVANHOUTENXLOCAL SETTrNGS\TEMPORARY INTERNET rlI.~XCOI~TI~Iq'r.msXWI~gGI~P\TC.MOI~TG^G~-WYO~[ii. DOC ~2~27/02 Survival of Representations and Warranties. All representations, warranties, and agreements made by Grantor in this Mortgage shall survive the execution and delivery of this Mortgage, shall be continuing in nature, and shall remain in full force and effect until such time as Grantor's Indebtedness shall be paid in full. CONDEMNATION, The following provisions relating to condemnation proceedings are a part of this Mortgage: Proceedings. If any prOceeding in condemnation is filed, Grantor shall promptly notify Lender in writing, and Grantor shall promptly take such steps as may be necessary to defend the action and obtain the award. Grantor may be the nominal party in such proceeding, but Lender shall be entitled to participate in the proceeding and to be represented in the proceeding by counsel of its own choice, and Grantor will deliver or cause to be delivered to Lender such instruments and documentation as may be requested by Lender from time to time to permit such participation. Application of Net Proceeds. 1F all or any part of the Property is condemned by eminent domain proceedings or by any proceeding or purchase in lieu of condemnation, Lender may at its election require that all or any portion of the net proceeds of the award be applied to the Indebtedness or the repair or restoration of the Property. The net proceeds of the award shall mean the award after payment of all reasonable costs, expenses, and attorneys' fees incurred by Lender in connection with the condemnation. IMPOSITION OF TAXES, FEES AND CHARGES BY GOVERNMENTAL AUTHORITIES. The following provisions relating to governmental taxes, fees and charges are a part of this Mortgage: Current Taxes, Fees and Charges. Upon request by Lender, Grantor shall execute such documents in addition to this Mortgage and take whatever other action is requested by Lender to perfect and continue Lender's lien on the Real Property. Grantor shall reimburse Lender for all taxes, as described below, together with all expenses incu~ed in recording, perfecting or continuing this Mortgage, including without limitatio~ ail taxes, tees, documentary stamps, zmd other charges for recording or registering this Mortgage. Taxes. The fbtlowing shall constitute taxes to which this section applies: (1) a specific tax upon this type of Mortgage or upon all or any part of the Indebtedness secured by this Mortgage; (2) a specific tax on Grantor which Grantor is authorized or required to deduct frown payments on the Indebtedness secured by this type of Mortgage; (3) a tax on this type of Mortgage chargeable against the Lender or the holder of the Note; and (4) a specific tax on all or any portion of the Indebtedness or on payments of principal and interest made by Grantor. Subsequent Taxes. If any tax to whiCh this section applies is enacted subsequent to the date of this Mortgage,'this event shall have the same effect as an Event of Default, and Lender may exercise any or all of its available remedies for an Event of Default as provided below unless Grantor either (1) pays the tax before it becomes delinquent, or (2) contests the tax as provided above in the Taxes and Liens section and deposits with Lender cash or a sufficient corporate surety bond or other security satisfactory to Lender. SECURITY AGREEMENT; FINANCING STATEMENTS. The following provisions relating to this Mortgage as a security agreement are a part of this Mortgage: Security Agreement. This instrument shall constitute a Security Agreement to the extent any of the Property constitutes fixtures or other personal property, and Lender shall have all of the rights of a secured party under the Uniform Commercial Code as amended from time to time. Security Interest. Grantor authorizes Lender to file any number of financing statements and take whatever other action is required by Lender to perfect and continue Lender's security interest in the fixtures, Rents, and Personal Property. In addition to recording this Mortgage in the real property records, Lender may, at any time and without further authorization from Grantor, file executed counterparts, copies or reproductions of this Mortgage as a financing statement. Grantor shall reimburse Lender for all expenses incurred in perfecting or continuing this security interest. Upon default, Grantor shall assemble the Personal Property in a manner and at a place reasonably convenient to Grantor and Lender and make it available to Lender within three (3) days after receipt of written demand from Lender. Page 8 - MORTGAGE C:\DOCUMENTS AND S£TrINGS\KVANHOUT£NXLOCAL SETIINGSXl'EMPOIIARY INT£RN~T FILES\CONT£NT.IESXWREgGD4P\7C.MOIITGAG£.WYO3[ii. DOC 12127/02 Addresses. The mailing addresses of Grantor (debtor) and Lender (secured party) from which information conceming the security interest granted by this Mortgage may be obtained (each as required by the Uniform Commercial Code) are as stated on the first page of this Mortgage. FURTHER ASSURANCES; ATTORNEY-IN-FACT. The following provisions relating to further assurances and attorney-in-fact are a part of this Mortgage: Further Assurances. At any time, and from time to time, upon request of Lender, Grantor will make, execute and deliver, or will cause to be made, executed or delivered, to Lender or to Lender's designee, and when requested by Lender, cause to be filed, recorded, refiled, or rerecorded, as the case may be, at such times and in such offices and places as Lender may deem appropriate, any and all such mortgages, deeds of trust, security deeds, security agreements, financing statements, continuation statements, instruments of further assurance, certificates, and other documents as may, in the sole opinion of Lender, be necessary or desirable in order to effectuate, complete, perfect, continue, or preserve (1) Grantor's obligations under the Note, this Mortgage, and the Related Documents, and (2) the liens and security interests created by this Mortgage as first and prior liens on the Property, whether now owned or hereafter acquired by Grantor. Unless prohibited by law or Lender agrees to the contrary in writing, Grantor shall reimburse Lender for all costs and expenses incurred in connection with the matters referred to in this paragraph. Attorney-in-Fact. If Grantor fails to do.any of the things referred to in the preceding paragraph, Lender may do so for and in the name of Grantor and at Grantor's expense. For such purposes, Grantor hereby irrevocably appoints Lender as Grantor's attorney-in-fact for the purpose'of making, executing, delivering, filing, recording, and doing all other things as may be necessary or desirable, in Lender's sole opinion, to accomplish the matters referred to in the preceding paragraph. FULL PERFORMANCE. If Borrower pays all the Indebtedness when due, and Grantor otherwise performs all the obligations imposed upon Grantor under this Mortgage, Lender shall execute and deliver to Grantee a suitable Satisfaction of this Mortgage and suitable statements of termination of any financing statement on file evidencing Lender's security interest in the Rents and the Personal Property. EVENTS OF DEFAULT. Each of the following, at Lender's option, shall constitute an Event of Default under this Mortgage: .Payment Default. Grantor fails to make any payment when due under the Indebtedness. Default on Other Payments. Failure of Grantor within the time required by this Mortgage to make any payrnent for taxes or insurance, or any other payment necessary to prevent filing of or to effect discharge of any lien. Other Defaults. Borrower or Grantor fails to comply with or to perform any other term, obligation,, covenant or condition contained in this Mortgage or in any of the Related Documents or to comply with or to perform any term, obligation, covenant or condition contained in any other agreement between Lender and Borrower or Grantor. If this default is curable, and if Borrower has not been given notice of a similar breach within the preceding twelve (12) months, it may be cured if Borrower, after Lender delivers notice demanding cure of the default to Borrower, cures the default within thirty (30) days, or if the default cannot reasonably be cured within such 30-day time period, Borrower begins such cure within this 30-day period and thereafter diligently pursues such cure to completion no more than 90 days after notice is sent. False Statements. Any warranty, representation or statement made or furnished to Lender by Grantor or on Grantor's behalf under this Mortgage, the Note, or the Related Documents is false or misleading in any material respect, either now or at the time made or furnished or becomes false or misleading at any time thereafter. D6feetive Collateralization. This Mortgage or any of the Related Documents ceases to be in full force and effect (including failure of any collateral document to create a valid and perfected security interest or lien) at any time and for any reason. Death or Insolvency. The death of any Borrower or Grantor (provided, however, that if Lender determines in its reasonable discretion that its interests are not materially impaired, Lender shall permit the deceased's estate to assume Page 9 - MORTGAGE C:XDOClJM£N'rS ^NI} S£TrlNG$\KVANHOUTEN~LOC^L $£TTING$\TEMI)ORARY INTERNET HL£S\CONTENI'.t£SXWI~Gr)a~?C-MORTG^G£.WYO~[H.DOC 1v27/o2 unconditionally the obligations arising under this Note in a manner reasonably satisfactory to Lender, and, in so doing, cure the event of default), the insolvency of Borrower or Grantor, the appointment of a receiver for any part of Borrower's or Grantor's property, any assignment for the benefit of creditors, any type of creditor workout, or the commencement of any proceeding under any bankruptcy or insolvency laws by or against Borrower or Grantor. Creditor or Forfeiture Proceedings. Commencement of foreclosure or forfeiture proceedings, whether by judicial proceeding, self-help, repossession or any other method, by any creditor of Grantor or by any governmental agency against any property securing the Indebtedness. This includes a garnishment of any of Grantor's accounts, including deposit accounts, with Lender. However, this Event of Default shall not apply if there is a good faith dispute by Grantor as to the validity or reasonableness of the claim which is the basis of the creditor or forfeiture proceeding and if Grantor gives Lender written notice of the creditor or forfeiture proceeding and deposits with Lender monies or a surety bond for the creditor or forfeiture proceeding, in an amount determined by Lender, in its sole discretion, as being an adequate reserve or bond for the dispute. Breach of Other Agreement. Any breach by Grantor under the terms of any other agreement between Grantor and Lender that is not remedied within any grace period provided therein, including without limitation any agreement concerning any indebtedness or other obligation of Grantor to Lender, whether existing now or later. Events Affecting Guarantor. Any of the preceding events occurs with respect to any guarantor, endorser, surety, or accommodation party of any of the Indebtedness or any guarantor, endorser, surety, or accommodation party dies or becomes incompetent, or revokes or disputes the validity of, or liability under, any Guaranty of the Indebtedness In the event of a death, Lender, at its option, may, but shall not be required to, permit the guarantor's estate to assume unconditionally the obligations arising under the guaranty in a manner satisfactory to Lender, and, in doing so, cure any Event of Default. Adverse Change. A material adverse ci~ange occurs in Borrower's fina~cial condit/on, or Lender believes the prospect of payment or performance of the !ndebtedness is impaired. Insecurity. Lender in good fai'~b believes itself insecure. RIGHTS AND REMEDIES ON DEFAULT. Upon the occurrence of an Event of Default and at any time thereafter, Lender, at Lender's option, may exercise any one or more of the following rights and remedies, in addition to any other rights or remedies provided by law: Accelerate Indebtedness. Lender shall have the right at its option without notice to Grantor to declare the entire Indebtedness immediately due and payable, including any prepayment penalty which Grantor would be required to pay. UCC Remedies. With respect to all or any part of the Personal Property, Lender shall have all the rights and remedies of a secured party under the Uniform Commercial Code. Collect Rents. Lender shall have the right, without notice to Grantor, to take possession of the Property and collect the Rents, including amounts past due and unpaid, and apply the net proceeds, over and above Lender's costs, against the Indebtedness. In furtherance of this right, Lender may require any tenant or other user of the Property to make payments of rent or use tees directly to Lender. If the Rents are collected by Lender, then Grantor irrevocably designates Lender as Grantor's attorney-in-fact to endorse instruments received in payment thereof in the name of Grantor and to negotiate the same and collect the proceeds. Payments by tenants or other users to Lender in response to Lender's demand shall satisfy the obligations for which the payments are made, whether or not any proper grounds for the demand existed. Lender may exercise its rights under this subparagraph either in person, by agent, or through a receiver. Appoint Receiver. Lender shall have the right to have a receiver appointed to take poss..ession of all or any part of the Property, with the power to protect and preserve the Property, to operate the Property preceding foreclosure or sale, and to collect the Rents from the Property and apply the proceeds, over and above the cost of the receivership, against the Indebtedness. Lender's right to the appointment of a receiver shall exist whether or not the apparent value of the Page I0 - MORTGAGE C:\DOCUMENTS AND SE'FrINGS\KVANHOUTEN~LOCAL SETTINGS\TEMPORARY INTERNET FILES\CONTENT.IES~WREgGD4P~7C-MORTGAGE.WYO3[i].DOC I~27/02 Property exceeds the Indebtedness by a substantial amount. The right to a receiver shall be given to Lender regardless of the solvency of Grantor and without any requirement to give notice to Grantor. Judicial Foreclosure. Lender may obtain a judicial decree foreclosing Grantor's interest in all or any part of the Property. Power of Sale. If permitted by applicable law, Lender may fbreclose Grantor's interest in all or in any part of the Personal Property or the Real Property by advertisement and sale. Deficiency Judgment. If permitted by applicable law, Lender may obtain a judgment for any deficiency remaining in the Indebtedness due to Lender after application of all amounts received from the exercise of the rights prov/ded in this section. Tenancy at Sufferance. If Grantor remains in possession of the Property after the Property is sold as provided above or Lender otherwise becomes entitled to possession of the Property upon default of Grantor, Grantor shall become a tenant at sufferance of Lender or the purchaser of the Property and shall, at Lender's option, either (1) pay a reasonable rental for the use of the Property, or (2) vacate the Property immediately upon the demand of Lender. Other Remedies. Lender shall have all other rights and remedies provided in this Mortgage or the Note or available at law or in equity. Sale of the Property. To the extent permitted by applicable law, Grantor hereby waives any and all right to have the property marshalled. In exercising its fights and remedies, Lender shall be free to sell all or any part of the Property 'together or separately, in one sale or by separate sales. Lender shall be entitled to bid at any public sale on all or any portion of the Property. Notice of Sale. Lender shall give Grantor reasona'ole notice of' the time and place of any public sale of the Personal Prope~Xy or of the time after which any private sale or other intended disposition of the Personal Property. i.s to be made. Reasonable notice shall mean notice given at least ten (10) days before the time of the sale or disposition. Election' of Remedies. A waiver by rely party of a breach of a provision of this Mortgage shall not constitute a waiver of or prejudice the party's rights otherwise to demand strict compliance with that provision or any other provision. Election by Lender to pursue any remedy will not bar any other remedy, and an election to make expenditures or to take action to perform an obligation of Grantor under this Mortgage, after Grantor's failure to perform, shall not affect Lender's right to declare a default and exercise its remedies. Nothing under this Mortgage or otherwise shall be construed so as to limit or restrict the rights and remedies available to Lender following an Event of Default, or in any way to limit or restrict the rights and ability of Lender to proceed directly against Grantor and/or against any other co-maker, guarantor, surety or endorser and/or to proceed against any other collateral directly or indirectly securing the Indebtedness. Attorneys' Fees; Expenses. If Lender institutes any suit or action to enforce any of the terms of this Mortgage, Lender will be entitled to recover such sum as the court may adjudge reasonable as attorneys' fees at trial and upon any appeal. 'Whether or not any court action is involved, all reasonable expenses Lender incurs that in Lender's opinion are necessary at any time for the protection of its interest or the enforcement of its rights shall become a part of the Indebtedness. Expenses covered by this paragraph include, subject to any limits under applicable law, Lender's reasonable attorneys' fees and Lender's legal expenses whether or not there is a lawsuit, including reasonable attorneys' fees and expenses for banlmaptcy proceedings (including efforts to modify or vacate any automatic stay or injunction), appeals, and any anticipated post-judgment collection services, the cost of searching records, obtaining title reports (including foreclosure reports), surveyors' reports, and appraisal fees and title insurance, to the extent permitted by applicable law. Grantor also will pay any court costs, in addition to all other sums provided by law. NOTICES. Any notice required to be given under this Mortgage shall be given in writing, and shall be effective when actually delivered, when actually received by telefacsimile (unless otherwise required by law), when deposited with a nationally recognized ovemight courier, or, if mailed, when deposited in the United States mail, as first class certified or registered mail postage prepaid, directed to the addresses shown near the beginning of this Mortgage. Any party may change its address for Page 11 - MORTGAGE C:~DOCUMEN~I'S AND SETTINGS\KVANHOUTEN~LOCAL SETTINGS\TEMPORARY INTERNET F1LES\CONT£NT.IE~rg~.~GDaI~7¢~MORTGAGE.WYO][ ] Ir ~C IH27/02 notices under this Mortgage by giving formal written notice to the other parties, specifying that the purpose of the notice is to change the party's address. For notice purposes, Grantor agrees to keep Lender informed at all times of Grantor's current address. Unless otherwise provided or required by law, if there is more than one Grantor, any notice given by Lender to any Grantor is deemed to be notice given to all Grantors. MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part of this Mortgage: Amendments. This Mortgage, together with any Related Documents, constitutes the entire understanding and agreement of the parties as to the matters set forth in this Mortgage. No alteration of or amendment to this Mortgage shall be effective unless given in writing and signed by the party or parties sought to be charged or bound by the alteration or amendment. Annual Reports. If the Property is used for purposes other than Grantor's residence, Grantor shall furnish to Lender, upon request, a certified statement of net operating income received from the Property during Grantor's previous fiscal year in such form and detail as Lender shall require. "Net operating income" shall mean all cash receipts from the Property less all cash expenditures made in connection with the operation of the Property. Caption Headings. Caption headings in this Mortgage are for convenience purposes only and are not to be used to interpret or define the provisions of this Mortgage. Governing LaW; Jury Waiver. This Mortgage will be governed by, construed and enforced in accordance with the laws of the State of Washington, except and only to the extent of procedural matters related to the perfection and enforcement of Lender's rights and remedies against the Property, which matters shall be governed by the laws of the State of Wyoming. However, in the event that the enforceability or validity of any provision of this Mortgage is challenged or questioned, such provision shall be governed by whichever applicable state or federal law would uphold or would enforce such challenged or questioned provision. The loan transaction 'which ~.~ evidenced by the Note and this Mortgage has been applied tot, considered, approved and made, and all necessary loan documents have been accepted by Lender in the State of Washington. LENDER, BORROWER, AND GRANTOR HEREBY WAIVE THE RIGHT TO ANY JURY TRIAL IN ANY ACTION, PROCEEDING, OR COUNTERCLAIM BROUGHT BY EITHER LENDER OR GRANTOR OR BORROWER AGAINST THE OTHER. ~rHIS MORTGAGE SHALL BE GOVERNED .BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF WASHINGTON. IF THERE IS A LAWSUIT, GRANTOR AND BORROWER, AT LENDER'S OPTION, AGREE TO SUBMIT TO THE JURISDICTION OF SPOKANE COUNTY, WASHINGTON, No Waiver by Lender. Lender shall not be deemed to have waived any rights under this Mortgage unless such waiver is given in writing and signed by Lender. No delay or omission on the part of Lender in exercising any right shall operate as a waiver of such right or any other right. A waiver by Lender of a provision of this Mortgage shall not prejudice or constitute a waiver of Lender's right otherwise to demand strict compliance with that provision or any other provision of this Mortgage. No prior waiver by Lender, nor any course of dealing between Lender and Grantor, shall constitute a waiver of any of Lender's rights or of any of Grantor's obligations as to any future transactions. Whenever the consent of I Jender is required under this Mortgage, the granting of such consent by Lender in any instance shall not constitute continuing consent to subsequent instances where such consent is required and in all cases such consent may be granted or withheld in the sole discretion of Lender. Severability. If a court of competent jurisdiction finds any provision of this Mortgage to be illegal, invalid, or unenforceable as to any circumstance, that finding shall not make the offending provision illegal, invalid, or unenforceable as to any other circumstance. If feasible, the offending provision shall be considered modified so that it becomes legal, valid and enforceable. If the offending provision cannot be so modified, it shall be considered deleted from this Mortgage. Unless otherwise required by law, the illegality, invalidity, or unenforceability of any provision of this Mortgage shall not affect the legality, validity or enforceability of any other provision of this Mortgage. Merger. There shall be no merger of the interest or estate created by this Mortgage with any other interest or estate in the Property at any time held by or for the benefit of Lender in any capacity, without the written consent of Lender. Page 12 - MORTGAGE C:'~)OCUMENTS AND SETTINGS~KVANHOUTEN~LOCAL SETTINGSSTEMPORARY INTERNET F1L£S\CONTENT.IES~WR£gGD4P\TC-MORTGAG£.WYO3[ I ] DOC 12/27/02 Multiple Parties. If Grantor or Borrower consist of more' than one person or entity, all obligations of Grantor and Borrower under this Mortgage shall be joint and several, and all references to Borrower shall mean each and every Borrower, and all references to Grantor shall mean each and every Grantor. This means that each of the persons signing below is responsible for all obligations in this Mortgage. Where any one or more of the parties are corporations or partnerships or limited liability companies, it is not necessary for Lender to inquire into the powers of any of the parties or of the officers, directors, partners, agents, managers or members acting or purporting to act on their behalf. Successors and Assigns. Subject to any limitations stated in this Mortgage on transfer of Grantor's interest, this Mortgage shall be binding upon and inure to the benefit of the parties, their successors and assigns. If ownership of the Property becomes vested in a person other than Grantor, Lender, without notice to Grantor, may deal with Grantor's successors with reference to this Mortgage and the Indebtedness by way of forbearance or extension without releasing Grantor from the obligations of this Mortgage or liability under the Indebtedness. Time is of the Essence. Time is of the essence in the pertbrmance of this Mortgage. Waiver of Homestead Exetnption. Grantor hereby releases and waives all rights and benefits of any applicable homestead exemption laws as to all Indebtedness secured by this Mortgage. WAIVER OF RIGHT OF REDEMPTION. NOTWITHSTANDING ANY OF THE PROVISIONS TO THE CONTRARY CONTAINED IN THIS MORTGAGE, GRANTOR HEREBY WAIVES ANY AND ALL RIGHTS OF REDEMPTION FROM SALE UNDER ANY ORDER OR JUDGMENT OF FORECLOSURE ON GRANTOR'S BEHALF AND ON BEHALF OF EACH AND EVERY PERSON, EXCEPT JUDGMENT CREDITORS OF GRANTOR, ACQUIRING ANY 1NTEREST IN OR TITLE TO THE PROPERTY SUBSEQUENT TO THE DATE OF FHIS MORTGAGE. BORROWER AND GRANTOR ACKNOWLEDGE HAVING READ ALL THE PROVISIO'NS OF THIS MORTGAGE, AND BOg_ROWER AND GRANTOR AGREE TO ITS TERMS. BORROWER: SPEEDY TURTLE PETROLEUM, INC., Theodore L. Hansen, President GRANTOR: Theodore L. Hansen, President CORPORATE ACKNOWLEDGMENT STATE OF ~ ')'~ ea__(~k, ) ) ss COUNTYOF ( ')'{5 _x'& (k., ) On tree'ay of ~'5 o .e ,_~,.._~?~.~, 2002, before me, the undersigned, a Notary Public in and for said State, personally appeared Theodore L. Hansen, President of Speedy Turtle Petroleum, Inc., a Utah corporation, and known to me to be an authorized agent of the corporation that executed the Mortgage and acknowledged the Mortgage to be the free and voluntary act and deed of the corporation, by authority of its Bylaws or by resolution of its board of directors, for the uses and Page 13 - MORTGAGE C:\DOCUMENTS AND SETTING$\KVANHOUTEN~LOCAL SE'VrlNGS\TEM?ORARY INTE. RNET FILES'~CONq'ENT.iF_.5~WRE9GD4PWC.MORTGAGE.WYO3[ii.DOC 12/27/02 on behalf of [he corporation. ry uUlic in an~l ~y)~/State ut' purposes therein mentioned, and on oath stated that he is authorized to execute this Mortgage and in fact executed the Mortgage Residing at [ '.j)(: ~-.~ ~ My commission expires CORPORATE ACKNOWLEDGMENT .e_.~ HOLLY JASPERSOt~,.¢ NOTARY PUBLIC , STATE ot UT~ STATE OF ~. _.~4~ ~t_~ ~ ) 251 W, RIVER PARK DR. ~275 ) ss PROVO, UTAH 846~ {, CO~TY OF ~) ~.,~ ) C0M[~. EXP 1-31-200~ On the~ay of ~[.~ t~ ,2002, before me, the undersized, a Nota~ Public in and Ibr said State, personally appeared Theodore L. Hansen, President of Seven C Ente~rises hc., a Wyoming co~oration, and ~om to me to be an authorized agent of the co¢oration that executed the Mo~gage and ac~owledged the Mo~gage to be the free and vol~t~ act and deed of the co~oration, by authofi~ of its Bylaws or by resolution of its board of directors, for the uses ~d p~oses therein mentioned, ~d on oa~ stated ~at he is au~odzed to execute ~is Mo~gage ~d in fact executed the Mo~gage on behalf of the co~oration., Notary Fubli~ i'[tand fot tl~ of' · Residing at ~_~ ~-~ My commission expires 251 W. RIVER PROVO, UrAH 84604 PARK DR. #275 COM~!l. EXP 1-31-2006 Page 14 - MORTGAGE CADOCUMENT$ ^ND SETFING$'xKVANHOUTENXLOCAL SETI'ING$\TEMPORARY IN'rl~RNET F1LESXCONTENT.IEgWREgGD4PWC.MORTGAGE.WYO3[I ].DOC 12127/02 Exhibit A Parcel 14:(301 Washington Street, Afton, 'Wyoming, Lincoln County) Part of Lot 2 of Block 17 of the Townsite of Afton, Lincoln County, Wyoming, more particularly described as follows: Beginning at a point 10 rods South of the Northwest comer of said Lot 2 and running thence South 4 rods; thence East 10 rods; thence North 4 rods; thence West 10 rods to the place of beginning. ALSO: Part of Lot 2 of Block 17 of the Townsite of Afton, Lincoln County, Wyoming, more particularly described as follows: Beginning at the NorthweSt comer of said Lot 2 and running thence South 10 rods; thence East 6 2/3 rods; thence North 10 rods; thence West 6 2/3 rods to the point of beginning. . ,..