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HomeMy WebLinkAbout90008130580 BOOK REOEIVED 'LINCOLN COUNTY OLERK State of Wyoming Space Above This Line For Recording Data REAL ESTATE MORTGAGE {With Future Advance Clause) DATE AND PARTIES. The date cf this Mortgage is 06-08.2004 are as follows: and the parties and their addresses MORTGAGOR: THOMAS DRILLING LLC, A WYOMING LlfviITED LIABILITY COMPANY 86637HWY89 ~ AFTON, WY 8311~ [] Refer to the Addendum which is attached and incorporated herein for additional Mortgagors. LENDER: THE BANK OF STAt{ VALLEY Organized and exis'.,ing under the laws of the state of Wyoming 384 WASHINGTON STREET PO BOX 8007 AF!0N, WY 83110 83-0315143 MORTGAGE. For good and valueble consideration, the receipt and sufficiency of which is acknowledged, and to secure the Secured Debt {hereafter defir, ed). Mortgagor grants, bargains, conveys, mortgages and warrants to Lender, with the power of sale, the following described property: SEE EXHIBIT A ATTACHED HERETO AND MADE APART HEREOF The property is located in LINCOLN at 86637 HIGHWAY 89 {County} · AETON , Wyoming 83110 (Address) ; {City} (Zip Code) Together with all rights, easements, appurtenances, royalties, mineral rights, oil and gas rights, crops, timber, all diversion payments or third party payments made to crop producers, and all existing and future ~mprovements, structures, fixtures, and replacements that may now, or at any time in the future, be part of the real estate described above (all referred [o as "Prope:[y"h The term Property also includes, but is not limited to, any and all water wells, water, ditches· reservoirs· reserwir sites and dams located on the real estate and all riparian and water rights associated with the Property, however established. WYOMING - AGRICULTURAL/COMMERCIALREAL ESTATE SECURITY INSTRUMENT INOTFORFNMA, FHLMC, FHA ORVA USE, ANDNOTFOR.CONSi~MERPURPOSE$} ~ ~_1993, 2001 Bankers Sy$1em$, hc., SI. Cloud. MN Form AGCO-RESI-WY II1§12003 (page I o! 8) 588 3. MAXIMUM OBLIGATION LIMIT. The total principal amount of the Secured Debt (hereafter defined) secured by this Mortgage at any one time shalll no.t exceed $ 750,000.00 . This limitation of amount does not include interest, oan charges, ccmmitment fees, brokerage commissions, attorneys' fees and other charges validly made pursuant to this Mortgage and does not apply to advances (or interest accrued on such advances) made under the terms of this Mortgage to protect Lender's security and to perform any of the covenants contained in this Mortgage. Future advances are contemplated and, along with other future obligations, are secured by this Mortgage even though all or part may not yet be advanced. Nothing;in this Mortgage, however, shall constitute a commitment to make additional or future loans or advances in any a:mollnt. Any such Commitment would need to be agreed to in a separate writing. 4. SECURED DEBT DEFINED. The t~;rm~"Secured Debt" includes, but is not limited to, the following: A. The promissory note(s), contract(s), guaranty(les) or other evidence of debt described below and all extensions, renewals, modifications or substitutions. [When referencing lhe debts below it is suggested tha~ you include items such as borrowers' names and addresses, no¢e principal amounts, commercial revolving loan agreement's maximum amount, interes:t re?,es, variable rate terms, maturity dares, etc.) ONE PROMISSORY NOTE DATED 6-8-04 IN THE AMOUNT OF $750,000.00 ,~ . B. All future advances from' Lender to Mortgagor or other future obligations of Mortgagor to Lender under any promissory note, contract, guaranty, or other evidence of debt existing now or executed after this Mortgage whether or not this Mortgage is specifically referred to in the evidence of debt. C; All obligations Mortgagor owes to Lender, which now exist or may later arise, to the extent not prohibited by law, including, but not limited to, liabilities for overdrafts relating to any deposit account agreement between Mortgagor and Lender D. All additional sums advanced:and expenses incurred by Lender for insuring, preserving or otherwise protecting the Property and its value a~d any other sums advanced and expenses incurred by Lender under the terms of this Mortgage, plus interest at the highest rate in effect, from time to time, as provided in the Evidence of Debt. E; Mortgager's performance' under the terms of any instrument evidencing a debt by Mortgagor to Lender and any Mortgage securing, guarar~tying, or otherwise relating to the debt. If more than one person signs ~his Mortgage as Mortgagor, each Mortgagor agrees that this Mortgage will secure all future advances and future obligations described above that are given to or incurred by any one or more Mortgagor, or any one or more Mortgagor and ~thers. This Mortgage will not secure any other debt if Lender fails, with respect to such other debt, to make any required disclosure about this Mortgage or if Lender fails to give any required notice of the right of rescission. 5. PAYMENTS. Mortgagor agrees t'~ make all payments on the Secured Debt when due and in accordance with the terms of the Evidence of Debt or this Mortgage. 6. CLAIMS AGAINST TITLE. Mortgagor will pay all taxes, assessments, liens, encumbrances, lease payments, grouted rents, utilitieS, and other charges, relating to the Property when due. Lender may require Mortgagor to provide to Lender copies of all notices that such armu~ts are due and the receipts evidencing Mortgager's payment. Mortgagor will defend title to the Property against an'/ cl'aims that would impair the lien of this Mortgage. Mortgagor agrees to assign to Lender, as requested by Lender, any rights, claims or defenses which Mortgagor may have against parties who supply labor or materials to improve or maintain the Property. 7. PRIOR SECURITY INTERESTS. 'Nith regard to any other mortgage, deed Of trust, security agreement or other lien document that created a prior security interest or encumbrance on the Property and that may have priority over this Mortgage, Mortgagor agrees: A. To ~ake all payments when due and to perform or comply with all covenants. B. To promptly deliver to Let,der any notices that Mortgagor receives from the holder. C. Not to make or permit any modification or e~tension, ot,,and not to request or accept any future advances under any note or agreement .~ecured-'by, the other mortgage, .deed of trust or security agreement unless Lender consents in writing. : -' .~ 8. DUE ON SALE OR ENCUMBRAHCE: Lender may, at its 'option, declare the entire balance of the Secured Debt to be immediately due and payable upon the creation of any lien, encumbrance, transfer, or sale, or contract for any of these on the Property. However, if the Property includes Mortga'gor's residence, this section shall be subject to the restrictions imposed by federal law (12 C.F.R. 591), as applicable. For the purposes of this section, the term "Property" also includes any interest to all or a!w part of the Property. This covenant shall run with the Property and shall remain in effect until the Secured Debt is I:aid in full and this Mortgage is released. · {page 2 of 8) ~F__X'J~'/~" © 1993, 200 ! aa~ke~'s Syslems, :~c:, SI. Cloud. MN Fearn AGCO-R~SI-WY ~/t 612003 TRANSFER OF AN INTEREST INiTHE MORTGAGOR. If Mortgagor is an entity other than a natural person (such as a corporation or other organization) Lender may demand immediate payment if (1) a beneficial interest in Mortgagor is sold or transferred; (2) there is a chargelin either the identity or number of members of a partnership or similar entity; or (3) there is a change in ownership of more than 25 percent of the voting stock of a corporation or similar entity. However, Lender may not demand payment'in!the above situations if it is prohibited by law as of the date of this Mortgage. 10. ENTITY WARRANTIES AND RE¢~R.ESENTATIONS. If Mortgagor is an entity other than a natural person (such as a corporation or other organization), Mortgagor makes to Lender the following warranties and representations which shall be continuing as long as the Secu, red Debt remains outstanding: A. Mortgagor is an entity w~ich is duly organized and validly existing in the Mortgagor's state of incorporation (or organization). Mortgagor i.~ i0 good standing in all states in which Mortgagor transacts business. Mortgagor has the power and authority to,:own the Property and to carry on its business as now being conducted and, as applicable, is qualified to co so in each state in which Mortgagor operates. B. The execution, delivery a~nd, performance of this Mortgage by Mortgagor and the obligation evidenced by the Evidence of Debt are withid the power of Mortgagor, have been duly authorized, have received all necessary governmental approval, and Will not violate any provision of law, or order of court or governmental agency. C. Other than disclosed in w. riting Mortgagor has not changed its name within the last ten years and has not used any other trade or fictitious name. Without Lender's prior written consent, Mortgagor does not and will not use any other name and will~, p~eserve its existing name, trade names and franchises until the Secured Debt is satisfied. ~ 11. PROPERTY CONDITION, ALTERATIONS AND INspEcTION. Mortgagor will keep the Property in good condition and make all repairs that are reasonably r,ecessary. Mortgagor will give Lender prompt notice of any loss or damage to the Property. Mortgagor will keep tl-e ~roperty free of noxious weeds and grasses. Mortgagor will not initiate, join in or consent to any change in any pri,za~e restrictive covenant, zoning ordinance or other public or private restriction limiting or defining the uses which may be made of the Property or any part of the Property, without Lender's prior written consent. Mortgagor will notify Lender of all demands, proceedings, claims, and actions against Mortgagor or any other owner made under law or regulation regarding use, ownership and occupancy of the Property. Mortgagor will comply with all legal requirements and restrictions, whether public or private, with respect to the use of the Property. Mortgagor also agrees that the nature of the occupancy and use will not change without Lender's prior written consent. N° portion of the Property will belremoved, demolished or materially altered without Lender's prior written consent except that Mortgagor has the ri!~ht to remove items of personal property comprising a part of the Property that become worn or obsolete, provided that suc,5 personal property is replaced with other personal property at least equal in value to the replaced personal property, free from any title retention device, security' agreement or other encumbrance. Such replacement of personal property, will be deemed subject to the security interest created by this Mortgage. Mortgagor shall not partition or subdivide the Property without Lender's prior written consent. Lender or Lender's agents may, at Lender's option, enter the Property at any reasonable time for the purpose of inspecting the Property. Any inspection of the Property shall be entirely for Lender's benefit and Mortgagor will in no way rely on Lender's inspection. 12. AUTHORITY TO PERFORM. If Mortgagor fails to perform any of Mortgagor's duties under this Mortgage, or any mortgage, deed of trust, securit,' agreement or other lien document that has priority over this Mortgage, Lender~l~, without notice, perform the duties or cause them to be performed. Mortgagor appoints Lender as attorney in fac~t~to sign Mortgagor's name or pay any arr;ount necessary for performance. If any construction on the Property is discontinued or not carried on in a reasonab e m~nner, Lender maydo whatever is necessary to Protect Lender's security interest in the Property. This may include compl ~,ting the construction. Lender's right to perform for Mortgagor shall not create an obligation to perform, and Lender's failure to perform will not preclude Lender from exercising;,ar~y of Lender's other rights under the law or this Mortgage. Any amounts paid by Lender for insuring, preserving or otherwise protecting the Property and Lender's security interest will be due on demand and will bear interest from the ,Jate of the payment until paid in full at the interest rate in effect from time to time according to the terms of the Evidence of Debt. 13. ASSIGNMENT OF LEASES AND RENTS. Mortgagor assigns, grants, bargains, conveys, mortgages and warrants to Lender as additional security all tl~e right, title and interest in the following (Property). A. Existing or future leases, ~ubleases, licenses, guaranties and any other written or verbal agreements for the use and occupancy of the Property, including but not limited to, any extensions, renewals, modifications or replacements (Leases). B. Rents, issues and profit-'.I, i'hcluding but not limited to, security deposits, minimum rents, percentage rents, additional rents, common.area maintenance charges, parking charges, real estate taxes, other applicable taxes, insurance premium contributions, liquidated damages following default, Cancellation premiums, "loss of rents" insurance, guest receipts,~ire~enues, royalties, proceeds, bonuses, accounts, contract rights, general intangibles, and all rights and claims which Mortgagor may have that in any way pertain to or are on account of the use or occupancy of the whole o.', any part of the Property (Rents). In the event any item listed as Leases or Rents is determined to be personal property, this Assignment will also be regarded as a security agreement. 0 00081 570 Mortgagor will promptly provid~ Lender with copies of the Leases and will certify these Leases are true and correct copies. The existing Leases will be orovided on execution of the Assignment, and all of the future Leases and any other information with respect to the~e L~ases will be provided immediately after they are executed. Mortgagor may collect, receive, enjoy and use the Rent.~ so long as Mortgagor is not in default. Mortgagor will not collect in advance any Rents due in future lease periods, unless Mortgagor first obtains Lender's written consent Upon default, Mortgagor will receive any Rents in trust for Lender anc Mortgagor will not commingle the Rents with any other funds. When Lender so directs, Mortgagor will endorse and delwer any payments of Rents from the Property to Lender. Amounts collected will be applied at Lender's discretion to~ the' Secured Debts, the costs of managing, protecting and preserving the Property, and other necessary expenses. Mort.~ag.or agrees that this Security Instrument is immediately effective between Mortgagor and Lender. This Security Instrument will remain effective during any statutory redemption period until the Secured Debts are satisfied. Unless otherwise prohibited or prescribed by state law, Mortgagor agrees that Lender may take actual possession of the Property without the necessity of commencing any legal action or proceeding. Mortgagor agrees that actual possession of the Property is deemed to occur when Lender notifies Mortgagor of Mortgager's default and demands that Mortgagor and M,~rtcjagor's tenants pay all Rents due or to become due directly to Lender. Immediately after Lender gives Mortgagor the, notice of default, Mortgagor agrees that either Lender or Mortgagor may immediately notify the tenants and demand t~'~,at all future Rents be paid directly to Lender. As long as this Assignment is in effect, Mortgagor warrants and represents that no default exists under the Leases, and the parties subject to the Leases h~ave not violated any applicable law on leases, licenses and landlords and tenants. Mortgagor, at its sole cost and ~xpi~nse, will keep, observe and perform, and require all other parties to the Leases to comply with the Leases and any applicable law. If Mortgagor or any party to the Lease defaults or fails to observe any applicable law, Mortgagor will p~o~ptly notify Lender. If Mortgagor neglects or refuses to enforce compliance with the terms of the Leases, then Lender'may, at Lender's option, enforce compliance. Mortgagor will not sublet, modif"/, extend, cancel, or otherwise alter the Leases, or accept the surrender of the Propert'~;' covered by the Leases (unless the Leases so require) without Lender's consent. Mortgagor will not assign, compromise, subordinate or encumber the b;ases and Rents without Lender's prior written consent. Lender does not assume or become liable for the Property's maintenance, depreciation, or other losses or damages when Lender acts to manage, protect or preserve the Property, except for losses and damages due to Lender's gross negligence or intentional torts. Otherwise, Mortgagor will indemnify Lender and hold Lender harmless for all liability, loss or damage that Lender may incur when Lender opts to exercise any of its remedies against any party obligated under the Leases. 14. CONDOMINIUMS; PLANNED UNIT DEVELOPMENTS. If the Property includes a unit in a condominium or a planned unit development, Mortgagor will perform all of Mortgager's duties under the covenants, by~laws, or regulations of the condominium or planned unit dele opment. 15. DEFAULT. Mor~gagor will be in cefa~Jlt if anY of the following occur: A. Any party obligated on th~ Secured Debt fails to make payment when due; B. A breach of any term or covenant in this Mortgage, any prior mortgage or any construction loan agreement, security agreement or an~ other document evidencing, guarantying, securing or otherwise relating to the Secured Debt; C. The making or furnishing:.of' any verbal or written representation, statement or warranty tO Lender that is false or incorrect in any material r~spect by Mortgagor or any person or entity obligated on the Secured Debt; D. The death, dissolution, oL insolvency of, appointment of a receiver for, or application of any deb,tot relief law to, Mortgagor or any person ~r e~tity obligated on the Secured Debt; E. A good faith belief by Lerder. at any time that Lender is insecure with respect to any person or entity obligated on the Secured Debt or that .:he prospect of any payment is impaired or the value of the Property is impaired; F. A material adverse change ih Mortgager's business including ownership, management, and financial conditions, which Lender in its opinioq believes impairs the value of the Property or repayment of the Secured Debt; or G.: Any loan proceeds are used for a purpose that will contribute to excessive erosion of highly erodible land or to the conversion Of wetlands to produce an agricultural commodity, as further explained in 7 C.F.R. Part 1940, Subpart G, Exhibit_ M. 16. REMEDIES ON DEFAULT. In son~,e instances, federal and state law will require Lender to provide Mortgagor with notice of the right to cure, mediation notices or other notices and may establish time schedules for foreclosure actions. Subject to these limitations, if any, Lender may accelerate the Secured Debt and foreclose this Mortgage in a manner provided by law if this Mortgagor is in defaull. At the option of Lender, all or anyi part of the agreed fees and charges, accrued interest and principal shall become immediately due and payable, .~fte~ giving notice if required by law, upon the occurrence of a default or anytime thereafter. In addition, Lender shall be entitled to ali the remedies provided bylaw, the Evidence of Debt, other evidences of debt, this Mortgage and am., re!lated documents including without limitation, the power to sell the Property. All remedies are distinct, cumulative; an~d not exclusive, and the Lender is entitled to all remedies provided at law or equity, whether expressly set forth or n;~t. The acceptance by Lender of any sum in payment or partial payment on the Secured Debt after the balance is due otis a~ccelerated or after foreclosure proceedings are filed shall not constitute a waiver of Lender's right to require full an~ comp ete cure of any existing default. By not exercising any remedy on Mortgager's default, Lender does not waive L~ndbr's right to later consider the event a default if it continues or happens again. . (page 4 of 8) ~ © 1993, 2001 ~anke~'s Systems, nc., St. Cloud, UN Fo~m AGCO-RESI-WY. I/1§12003 .; 09000S L 57:£ 17. EXPENSES; ADVANCES ON COVi:.NANTS; ATTORNEYS' FEES; COLLECTION COSTS. Except when prohibited by law, Mortgagor agrees to pay all of Lend6r's expenses if Mortgagor breaches any covenant in this Mortgage. Mortgagor will also pay on demand all o! Lender's expenses incurred in collecting, insuring, preserving or protecting the Property or in any inventories, audits, inspection~ clr other examination by Lender in respect to the Property. Mortgagor agrees to pay all costs and expenses incurred b'.., Lender in enforcing or protecting Lender's rights and remedies under this Mortgage, including, but not limited to, attor~eys' fees, court costs, and other legal expenses. Once the Secured Debt is fully and finally paid, Lender agrees to release this Mortgage and Mortgagor agrees to pay for any recordation costs. All such amounts are due on demand and ~vlll bear Interest from the time of the advance at the highest rate in effect, from time to time, as provided in the Evidenc~ of Debt and as permitted by law. 18. ENVIRONMENTAL LAWS AND HI'~ZARDOUS SUBSTANCES. As used in this section, (1) "Environmental Law" means, without limitation, the, Comprehensive Environmental Response, Compensation and Liability Act {CERCLA, 42 U.S.C. 9601 et seq.), all other federal, state and local laws, regulations, ordinances, court orders, attorney general opinions or interpretive letters concerning the public health, safety, welfare, environment or a hazardous substance; and (2) "Hazardous Substance" means an~ toxic, radioactive or hazardous material, waste, pollutant or contaminant which has characteristics which render the .-ubStance dangerous or potentially dangerous to the public health, safety, welfare or environment. The term includes, ~ ithout limitation, any substances defined as "hazardous material," "toxic substances," "hazardous waste" or "hazardous substance" under any Environmental Law. Mortgagor represents, warrants and agrees that, except as previously disclosed ahd acknowledged in writing: .A. No Hazardous Substance h'~s 'been, is, or will be located, transported, manufactured, treated, refined, or handled by any person on, under or' ab'out the Property, except in the ordinary course of business and in strict compliance with all applicable Environrr'en:tal Law. B. Mortgagor has not and wil! not cause, contribute to, or permit the release of any Hazardous Substance on the Property. C. Mortgagor will immediately notify Lender if (1) a release or threatened release of Hazardous Substance occurs on, under or about the Property or migrates or threatens to migrate from nearby property; or (2) there is a violation of any Environmental Law ccncerning the Property. In such an event, Mortgagor will take all necessary remedial action in accordance with Environmental Law. D. Mortgagor has no knowled3e :'of or reason to believe there is any pending or threatened investigation, claim, or proceeding of any kind relating to (1) any Hazardous Substance located on, under or about the Property; or 12) any violation by Mortgagor'ror any tenant of any Environmental LaW. Mortgagor will immediately notify Lender in writing as soon as Mortgagor.has reason to believe there is any such pending or threatened investigation, claim, or proceeding. In such an ezeP. t, Lender has the right, but not the obligation, to participate in any such proceeding including the right to receiv:e copies of any documents relating to such proceedings. E. Mortgagor and every renan-.' have been, are and shall remain in full compliance with any applicable Environmental Law. F. There are no underground %torrage tanks, private dumps or open wells located on or under the Property and no such tank, dump or well wi'l be added unless Lender first consents in writing. G. Mortgagor will regularly in.'pect the Property, monitor the activities and operations on the Property, and confirm that all permits, licenses or approvals required by any applicable Environmental Law are obtained and complied with. H. Mortgagor will permit, or cause any tenant to permit, Lender or Lender's agent to enter and inspect the Property and review all records at a~y reasonable time to determine (1) the existence, location and nature of any Hazardous Substance on, under or about the Property; (2) the existence, location, nature, and magnitude of any Hazardous Substance that has been released on, under or about the Property; or (3) whether or not Mortgagor and any tenant are in comp'.iance with applicable Environmental Law. I. Upon Lender's request ar, d at any time, Mortgagor agrees, at Mortgagor's expense, to engage a qualified environmental engineer to i)re~)are an environmental audit of ~he Property and to submit the results of such audit to Lender. The choice of 'th~. environmental engineer who will perform such audit is subject to Lender's approval. J. Lender has the right, but not the obligation, to perform any of Mortgagor's obligations under this section at Mortgagor's expense. ;' K. As a consequence of any [.reach of any representation, warranty or promise made in this section, (1) Mortgagor will indemnify and hold Lender and Lender's successors or assigns harmless ·from and against all losses, claims, 'demands, liabilities, dama~les, cleanup, response and remediation costs, penalties and expenses, including without limitation all costs of litigation and attorneys' fees, which Lender and Lender's successors or assigns may sustain; and (2) at Lender's discretion, Lender may release this Mortgage and in return Mortgagor will provide Lender with collateral of at leaSt equal value to the Property secured by this Mortgage without prejudice to any of Lender's rights under this IVlort, gage. L. Notwithstanding any of th,.· la~nguage contained in this Mortgage to the contrary, the terms of this section shall survive any foreclosure ol setisfaction of this Mortgage regardless of any passage of title to Lender or any disposition by Lender of an'/orf all of the Property. Any claims and defenses to the contrary are hereby waived. 19. CONDEMNATION. Mortgagor wil give Lender Prompt notice of any action, real or threatened, by private or public entities to purchase or take any o: all of the Property, including any easements, through condemnation, eminent domain, or any other means. Mortgagor furthe.r agrees to notify Lender of any proceedings instituted for the establishment of any sewer, water, conservation, ditch, drainage, or other district relating to or binding upon the Property or any part of it. Mortgagor authorizes Lender to ir. teryene in Mortgagor's name in any of the above described actions or claims and to collect and receive all sums resulting from the action or claim. Mortgagor assigns to Lender the proceeds of any award or claim for damages connected witf a condemnation or other taking of all or any part of the Property. Such proceeds shall be considered payments and will be applied as provided in this Mortgage. This assignmen,t,o( prz)ceeds is subject to the terms of any prior mortgage, deed!of ~rust, security agreement or other lien document.. (page 5 of 8) ~ ;,~_ ! , ..~. In~., SI. Cloud, MN :. , O O00 :L 20. INSURANCE. Mortgagor a]r~s t~ maintain insuran~ as follows: A. Mort0a0of shal] k~ep the~Pf6p~rt~ insured a0ainst loss b~ fire, theft and other hazards and risks reasonabl~ associated with th~ Prop{:.~rt~ due to its t~p~ and location Other hazards and dsks may in~lud~, for ~xampl~, ~owra0e a0ainst loss du~ to'floods o~ floodino. This insurance shall b~ maintained in the amounts and for th~ pedods that Lende~ requires. What Lender r~qui~s pursuant to th~ ~c~c~din0 two s~nt~nc~s ~an chan0~ ducin] th~ t~rm of tho S~cured D~bt. Th~ ~nsuranc~ ca~ci~{ pcovidin0 th~ inauran~ shall b~ chosen by Mort0aOor to L~nd~r'a approval, which :shatl not b~ unr~aaonab[~ withh~ld. If Mortgagor fail~ to maintain the d~acfib~d abo~, L~nder '~a~, at Lender's option, obtain cov~fa~ to protect Lend~{'s d0hts in th~ Property ac~ordin0 to th~ t~rms of t,hia :Mort0a~. All insurance policies and -en~wals shall be acceptable to Lender and shall include a standard "mortgage clause" and, where applicable, "lende~ loss payee clause." Mortgagor shall immediately notify Lender of cancellation or termination of the insuran~ce. Lender shall have the right to hold the policies and renewals. If Lender requires, Mortgagor shal immediately give to Lender all receipts of paid premiums and renewal notices. Upon loss, Mortgagor shall give immediate notice to the insurance carnet and Lender. Lender may make proof of loss if not made immediately by Mort~aag.or. Unless Lender and Mortg~;gor otherwise agree in writing, ~nsurance proceeds shall be applied to restoration or repair of the Property damaged if the restoration or repair is economically feasible and Lender's security is not lessened, f the restoratio3 or repair is not economical y feasible or Lender's security would be lessened, the insurance proceeds shall ~e applied to the Secured Debt, whether or not then due, with any excess paid to Mortgagor. If Mortgagor abandons the Property, or does not answer within 30 days a notice from Lender that the insurance carrier has offered 1:o settle a claim, then Lender may collect the insurance proceeds. Lende~ may use the proceeds to repair or ~estore the Property or to pay the Secured Debt whether o1 not then due. The 30-day period will begin when the notice is given. Unless Lender and Mortgatjor otherwise agree in writing, any application of proceeds to principal shall not extend or postpone the due date of' scheduled payments or change the amount of the payments. If the Property is acquired by Lender, Mortgagor's right to any insurance policies and proceeds resulting from damage to the Property before the acqui.';ition shall pass to Lender [o the extent of the Secured Debt immediately before the acquisition. B. Mortgagor agrees to maint, ain comprehensive general liability insurance naming Lender as an additional insured in an amount acceptable to Lender, ~nsuring against claims arising from any accident or occurrence in or on the Property. C. Mortgagor agrees to maintain rental loss or business interruption insurance, as required by Lender, in an amount equal to at least coverac, e ef one year's debt serwce, and required escrow account deposits (if agreed to separately in writing), und~-r a form of policy acceptable to Lender. 21. NO ESCROW FOR TAXES AND IHSURANCE. Unless otherwise provided in a separate agreement, Mortgagor will not be required to pay to Lender funds for taxes and insurance in escrow. 22. FINANCIAL REPORTS AND ADD TIONAL DOCUMENTS. Mortgagor will provide to Lender upon request, any financial statement or information Lender may' deem necessary. Mortgagor warrants that all financial statements and information Mortgagor provides to Lender are, or will be, accurate, correct, and complete. Mortgagor agrees to sign, deliver, and file as Lender may reasonably reque;t ~ny additional documents or certifications that Lender may consider necessary to perfect, continue, and preserve IV ortgagor's obligations under this Mortgage and Lender's lien status on the Property. If Mortgagor fails to do so, Lender ma, y sign, deliver, and file such documents or certificates in Mortgagor's name and Mortgagor hereby irrevocably appoints Lender or Lender's agent as attorney in fact to do the things necessary to comply with this section. 23. JOINT AND INDIVIDUAL LIABILITY; ~O-SlGNERS; SUCCESSORS AND ASSIGNS BOUND. All duties under this Mortgage are joint and individual. If Mortga.c or ~igns this Mortgage but does not sign the Evidence of Debt, Mortgagor does so only to mortgage Mortgagor's interest in the Property to secure payment of the Secured Debt and Mortgagor does not agree to be personally liable on the Sec'ure~ Debt. Mortgagor agrees that Lender and any party to this Mortgage may extend, modify or make any change itl the te~ms of this Mortgage or the Evidence of Debt without Mortgagor's consent. Such a change will not release Mortgago' from the terms of this Mortgage. The duties and benefits of this Mortgage shall bind and benefit the successors and assigns of MOrtgagor and Lender. If this Mortgage secures a guarapty b, etween Lender and Mortgagor and does not directly secure the obligation which is guarantied, Mortgagor agrees to wa!ve any rights that may prevent Lender from bringing any action or claim against Mortgagor orany party indebted ~nder the obligation including, but not limited to, anti-deficiency or one-action laws. ©1993, 2001 Bankers Syslems, Inc., St. Cloud, MN Folm AGCO-RESI-WY 1/1§12003 (page 6 of 8) O O008Z 573 24. APPLICABLE LAW; SEVERABILI~Y;!' INTERPRETATION. This Mortgage is governed by the laws of the jurisdiction in which Lender is located, except ':o the extent otherwise required by the laws of the iurisdiction where the Property is located. This Mortgage is comp, eta and fully integrated. This Mortgage may not be amended or modified by oral agreement. Any section or claus~] in this Mortgage, attachments, or any agreement related to the Secured Debt that conflicts with applicable law will not be effective, unless that law expressly or impliedly permits the variations by written agreement. I! any section or clause, of [his Mortgage cannot be enforced according to its terms, that section or clause wil be severed and will not affec! the enforceability of the remainder of this Mortgage. Whenever used, the singular shall include the plural and the plural the singular. The captions and headings of the sections of this Mortgage are for convenience only and are not to be used to interpret or define the terms of this Mortgage. Time is of the essence in this Mortgage. 25. NOTICE. Unless otherwise required ~.~y law, any notice shall be given by delivering it or by mailing it by first class mail to the appropriate party's address o~'~ page 1 of this Mortgage, or to any other address designated in writing. Notice to one mortgagor will be deemed to be n,)tii:e to all mortgagors. 26. WAIVERS. Except to the extent prohibited by law, Mortgagor wmves any right regarding the marshalling Of liens and assets and all homestead exemption rights relating to the Property. 27. U.C.C. PROVISIONS. If checked, the following are applicable to, but do not limit, this Mortgage: Construction Loan. This Mortgage secures an obligation incurred for the construction of an improvement on the Property. Fixture Filing. Mortgagor jr~,nts to Lender a security interest in all goods that Mortgagor owns now or In the future and that are or will i~ecome fixtures related to the Property. Crops; Timber; Minerals; llents, Issues and Profits. Mortgagor grants to Lender a security interest in all crops, timber and minerals Iocat~d on the Property as well as all rents, issues, and profits of them including, but not limited to, all Conservatior R~serve Program (CRP) and Payment in Kind {PIK) payments and similar governmental programs (all of which shal also be included in the term "Property"). Personal Property. Mortga§o~ grants to Lender a security interest in all personal property located on or connected with the Property. This se:cu'rity interest includes all farm products, inventory, equipment, accounts, documents, instruments, chattel paper! ganeral intangibles, and all other items of personal property Mortgagor owns now or the future and that are ushd or useful in the construction, ownership, operation, management, or maintenance of the Property. The term "Fersonal property" specifically excludes that property described as "household goods" secured in connection wi~h a "consumer" loan as those terms are defined in aPPlicable federal regulations governing unfair and deco[rove credit practices. Filing As Financing Statement. Mortgagor agrees and acknowledges that. this Mortgage also suffices as a financing statement and as such, may be filed of record as a financing statement for purposes of Article 9 of the Uniform Commercial Code,. A carbon, photographic, image or other reproduction of this Mortgage is sufficient as a financing statement. 28. OTHER TERMS. If checked, the f(HI0wing are applicable to this Mortgage: [] Line of Credit. The Secured Debt includes a revolving line of credit provision. Although the Secured Debt may be reduced to a zero balance,;this Mortgage will remain in effect until released. [] Separate Assi0nment. Th~ Mortgagor has executed or will execute a separate assignment of leases and rents. If the separate assignment o~ leases and rents is properly executed and recorded, then the separate assignment will supersede this Security Ins'trument's "Assignment of Leases and Rents" section. I-i, Additional Terms. ~--(~ lClCl3, 2001 Bankecs Syslems, Ir:c., SI. Cloud. MN Form AGC~ 1/1612003 ~ii!!:!:: :'i: :::; .... (page ? of 81 0 0008 . 574 SIGNATURES: By signing below, Mor.tgagor agrees to the terms and covenants contained in this Mortgage and in any attachments. Mortgagor also acknowledges receipt of a copy of this Mortgage on the date stated above on Page 1. [] Actual authority was granted ~to the parties signing below by resolution signed and dated. Entity Name: THOMAS DRILLING, LLC ~tureiTYSON V. THOMAS, MANAGING MEMBER (DeteJ (Signature) (Date) (Signature) (Date) (Signature} (Dale) [] Refer to the Addendum' which is attached and incorporated herein for additional Mortgagors, signatures and acknowledgments. : ACKNOWLEDGMENT: STATE OF '. , COUNTY OF This instrument was acknowledged before me this by day of SS. My commission expires: {Notary Public) STATE OF W.0min ' , COUNTY OF This instrument was acknowledged before me this 8th by TYSON V. THOMAS } SS. day of June, 2004 MANAGING MEMBER (Titlels)) ^,k,ow,°oe .... , of THOMAS ,DRILLING, LLC . a Wyominfl LIMITE..D LIABILITY CO~IPANY My commission expires: ~~My Commission Expires July 8, 2006 (Name of Business or Entity) on behalf of ~e business or entity. (Notary PubLic) F--~----'~ © 1993, 2001 Bankers Sys[ems, I~$c., St. Cloud, MN From AGCO-RESI*WY ti16/2003 (page 8 of 8) DE3CAIPTI0~ I'OR ~ILE HIG'~ THOMA3 DRILLING TRACT Tha'c part of the SE'~NE~ o2 Section 2%, T]IN, RllBW, Lincoln Of£ice~ bh~nc~ ~0O'-17'-0O-~, 3?~.ie ge~, along aa~ caa~ linc, thence N00=-17,_00.N, 75..0) feat, along Ch· w=sc line o~ said mouth·est bathey o~ thac trot: o~ record in Book 233 o~ Pho~omcac£c Records on Dage 4%0; 'line of .aid erect in Book 233 to ~he norchwest'bauhe¥ chenc~ S~'-~o'-3o-w, l~.3'] ~eec. mloug an ex/~tLng fence line. to a point; Chence S00'-27'-46.E, 518.7; feet, to a point; thence N89'-07. 97'E, 54~.2~ fee~. to the SPIKE OF Section 24, T32N, RI19W, be:lng N00'-iT'-00-W; SUBJECT TO a right-of-way ~s~m=~ for U.S. Highway each 'spike" marked by a ]/~' x 12' iCael ~@ike and referenced inscribed, "SURVEYOR'SCHE~BEL LTD AFTON WY PiS $]68' wi~h ap~roDriaKm.deKa£1~: metal cap inscribed, "eAUL ~ SCHERBE~ RLS [64 SUR~ each ,point" ~rked by a S/I" x 24' steel reinforcing rod w/ch ~ PLS 5368", or, 'S~VEYOR S~E~L h~ ~TON WY O~fice of ~he Clerk of Linc:lB Co~y titled, "HOgACK SE~[ON 2~ 'L'J2N Rll~w bL~t~UN~, WYOmiNG', dac~d'20 .--57.5