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HomeMy WebLinkAbout901799RECORDATION REQUESTED BY: Rocky Mountain Bank - Whilehall 101 E. Legion P.O. Box 599 Whitehall, MT 59759 WHEN RECORDED MAIL TO: Rocky Mounlain Bank - Whitehall 101 E. Legion P.O. Box 599 Whitehall, MT 59759 SEND TAX NOTICES TO: Rocky Mountain Bank - Whitehall lol E. Legion P.O. Box 599 Whit.~hall, MT 59759 9 0 i 7 9 9 BOOK RECEIVED SPACE ABOVE THIS LINE IS FOR RECORDER'S U~E ONLY CONSTRUCTION MORTGAGE MAXIMUM LIEN. The total principal indebtedness that may be outstanding at any given time which is secured by this Mortgage is $195,000.00. THIS MORTGAGE dated July 23, 2004, is made and executed between Wendell Harris Profit Sharing Plan, whose address is PO Box 977, Thayne, WY 83127 (referred to below as "Grantor") and Rocky Mountain Bank - Whitehall, whose address is 101 E. Legion, P.O. Box 599, Whitehall, MT 59759 (referred to below as "Lender"). GRANT OF MORTGAGE. For valuable consideralion, Grantor morlgages and conveys to Lender all of Grantor's right, title, and interest in and to the following described real property, together with all existing or subsequently erected or affixed buildings, improvements and fixtures; all easements, rights of way, and appurtenances; all water, water righls, watercourses and dilch rights (including stock'in utilities wilh ditch or irrigation righls); and all other rights, royalties, and profits relating to the real property, including without limitation all minerals, oil, gas, geothermal and similar mailers, (the "Real Property") located in Lincoln County, State of Wyoming: Lot 83 in Star Valley Ranch Plat 9, Lincoln County, Wyoming as described on the Official Plat thereof. The Real Property or its address is commonly known as 86 Green Canyon Drive, Thayne, WY 83127. CROSS-COLLATERALIZATION. In addition to the Nole, this Mortgage secures all obligations, debts and liabilities, plus interest thereon, ct Grantor to Lender, or any one or more of them, as well as all claims by Lender against Grantor or any one or more of them, whether now existing or hereafler arising, whether related or unrelated to the purpose of the Note, whether voluntary or otherwise, whelher due or not due, direct or indirecl, delermined or undetermined, absolute or contingent, liquidated or unliquidated whether Grantor may be liable individually or joinlly with others, whether obligated as guarantor, surety, accommodation party or otherwise, and whether recovery upon such amounts may be or hereafter may become barred by any statute of limitations, and whelher the obligation to repay such amounts may be or hereafter may become otherwise unenforceable. Grantor presenlly assigns Io Lender all of Grantor's righl, title, and interest in and to all present and future leases of the Property and all Rents from the Properly. In addition, Granlor grants to Lender a Uniform Commercial Code security interest in the Personal Properly and Renls. 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 ANY AND ALL OBLIGATIONS UNDER THE NOTE, THE RELATED DOCUMENTS, AND THIS MORTGAGE. THIS MORTGAGE, INCLUDING THE ASSIGNMENT OF RENTS AND THE SECURITY INTEREST IN THE RENTS AND PERSONAL PROPERTY, IS ALSO GIVEN TO SECURE ANY AND ALL OF GRANTOR'S OBLIGATIONS UNDER THAT CERTAIN CONSTRUCTION LOAN AGREEMENT BETWEEN GRANTOR AND LENDER OF EVEN DATE HEREWITH. ANY EVENT OF DEFAULT UNDER THE CONSTRUCTION LOAN AGREEMENT, OR ANY OF THE RELATED DOCUMENTS REFERRED TO THEREIN, SHALL ALSO BE AN EVENT OF DEFAULT UNDER THIS MORTGAGE. THIS MORTGAGE IS GIVEN AND ACCEPTED ON THE FOLLOWING TERMS: PAYMENT AND PERFORMANCE. Except as otherwise provided in Ihis Mortgage, G~antor shall pay to Lender all amounts secured by lhis Mo[tgage as they become due and shall strictly pedorm ail of Grantor's obligations under this Mortgage. CONSTRUCTION MORTGAGE. This Mortgage is a "construction mortgage" for the purposes of Sections 9-334 and 2A-309 of the Uniform Commercial Code, as those sections have been adopted by the State of Monlana. POSSESSION AND MAINTENANCE OF THE PROPERTY. Grantor agrees lhal Grantor's possession and use of the Property shall be governed by the following provisions: Possession and Use. Until lhe occurrence of an Event of Default, Grantor may (1) remain in possession and control ol the Property; (2) use, operate or manage the Property; and (3) collect the Rents from the Property. The following provisions relate Io the use of Ihe Property or to other limitations on the Property. Duty Io Maintain. Grantor shall maintain the Properly in lenantable condition and promptly perform all repairs, replacements, and maintenance necessary to preserve ils value. Compliance With Environmenlal Laws. Grantor represents and warranls to Lender that: (1) During the period of Granlor's ownersMp of the Property, there has been no use, generation, manufacture, storage, treahnent, disposal, release Or threalened release ct any Hazardous Substance by any person on, under, about or from the Property; (2) Granlor has no knowledge of, or reason to believe that lhem has been, except as previously disclosed 1o and acknowledged by Lender in writing, (a) any breach or violation of any Environmental Laws, (b) any use, generation, manufacture, storage, trealment, disposal, release Or threatened release of any Hazardous Substance on, under, about or from lhe Property by any prior owners or occupants of the Property, or (c) any aclual or Ihreatened litigation or claims of any kind by any person relating to such mailers; and (3) Except as'previously disclosed to and acknowledged by Lender in writing, (a) neither Granlor nor any lenant, contractor, agent or other authorized user of lhe Property shall use, generate, manufacture, store, treat, dispose of or release any Hazardous Substance on, under, about or from the Property; and (b) any such activity shall be conducted in compliance with all applicable federal, stale, and local taws, regulations and ordinances, including without limilation all Environmental Laws. Grantor authorizes Lender and its agenls Io enter upon the Property to make such inspections and tests, at Grantor's expense, as Lender may deem appropriate Io determine compliance of the Property with this section of the Modgage. 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 pad of Lender to Grantor or to any other person. The representations and warranlies 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 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 att claims, losses, liabilities, damages, penallies, 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 Ihrealened release occurring prior to Grantor's ownership or interest in the Property, whether or not the' same was or should have been'known lo Grantor. The provisions of this section of the Mortgage, including the obligation lo indemnify, 'shall survive the payment of the Indebtedness and the satisfaction and reconveyance of the lien of Ihi5 Mortgage and shall not be affected by Lender's acquisition of any interesl 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 skipping of or waste on or to the Property or any portion of the Property. Without limiting 'the generality of lhe foregoing, Grantor will not remove, or grant lo any other party Ihe right to remove, any timber, minerals (including oil and gas), coal, clay, scoria, soil, gravel or rock products wilhout Lender's prior written consent. Removal of Improvements. Grantor shall not demolish or remove any Improvements fr~m the Real Property without Lender's prior written consent. As a condition lo the removal of any Improvements, Lender may require Grantor to make arrangements salisfactory to Lender to replace such Improvements wilh Improvements of at leasl equal value. Lender's Right l'o Enler. Lender and Lender's agents and representatives may enter upon lhe Real Properly at all reasonable times Io altend to Lender's interesls and 1o inspect the Real Property for purposes of Grantor's compliance wilh the terms and conditions of lhis Mortgage. Loan No: 803451 (Continued) · ~) ~ 0 Page 2 Compliance wilh Governmental Requirements. Grantor shall promptly comply with all laws, ordinances, and regulations, now or hereafter in effect, of atl governmental aulhorilies applicable 1o the use or occupancy of the Property, including without limilation, the Americans With Disabilities Acl. Granlor may conlest in good faith any such law, ordinance, or regulation and withhold compliance during any proceeding, including appropriate appeals, so long as Granlor has notified Lender in wriling prior to doing so and so long as, in Lender's sole opinion, Lender's interests in the Property are not jeopardized. Lender may require Grantor to posl adequale security or a surely bond, reasonably satisfactory to Lender, 1o prolecl Lender's inleresL Duty lo Prolecl. Granlor agrees neilher 1o abandon or leave unaltended the Properly. Granlor shall do all olher acts, in addition Io lhose acts set forth above in lhis section, which from lhe characler and use of the Property are reasonably necessary to protect and preserve the Property. CONSTRUCTION LOAN. If some or all of lhe proceeds of lhe loan crealing lhe 10debledness are to be used lo consfrucl or complete construction of any Improvemeols on the Property, Ihe Improvemenls shall be completed no later~than lhe malurily date of the Note (or such earlier date as Lender may reasonably eslablish) and Granlor shall pay in full all cosls and expenses in c0nneclion with lhe work. Lender will disburse loan proceeds under such lerms and condilions as Lender may deem reasonably necessary to insure lhat fha interest created by lhis Morlgage shall have priority over all possible liens, including lhose of material suppliers and workmen. Lender may require, among other Ihings, that disbursement requests be supporled by receipted bills, expense affidavits, waivers of liens, conslruclio,~ progress reports, and such olher documentalion as Lender may reasonably request. DUE ON SALE - CONSENT BY LENDER. Lender may, at Lender's option, declare immediately due and payable all sums secured by this Mortgage upon the sale or Iransfer, withoul Lender's prior written consent, of all or any part of the Real Property, or any interest in the Real Property. A "sale or Iransfer" means the conveyance of Real Property or any righl, title or interesl in lhe Real Property; whelher legal, beneficial or equilable; whether volunlary or involunlary; whelher by outrighl sale, deed, installmenl sale contracl, land contracl, conlracl for deed, leasehold interesl wilh alerm grealer lhan lhree (3) years, lease-option conlracl, or by sale, assignment, or transfer of any beneficial interest in or ~o any land lrust holding title to lhe Real Properly, or by any olher method of conveyance of an inleresl in lhe Real Properly. However, this oplion shall not be exercised by Lender if such exercise is prohibited by federal law or by Montana law. TAXES AND LIENS. The following provisions relating to the taxes and liens on lhe Property are part of lhis Mortgage: Paymenl. Grantor shall pay when due (and in all evenls prior 1o delinquency) all laxes, payroll taxes, special faxes, assessmenls, waler charges and sewer service charges levied againsl 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 lhe Properly. Granlor shall maintain lhe Property free of any liens having priority over or equal 1o lhe interest of Lender under this Mortgage, except for those liens specifically agreed to in writing by Lender, and excepl for the lien of taxes and assessmenls not due as fudher specified in the Right to Conlesl paragraph. Rlghl !o Conlesl. Granter may wilhhold paymenl of any lax, assessment, or claim in conneclion with a good failh dispute over lhe obligalion 1o pay, so long as Lender's interest in the Properly is not jeopardized. If a lien arises or is filed as a result of nonpaymenl, Grantor shall within fifteen (t5) days afler lhe lien arises or, if a lien is filed, wilhin fifteen (15) days after Grantor has nolice of the filing, secure lhe discharge of the lien, or if requested by Lender, deposit wilh Lender cash or a sufficienl corporate surety bond or other security satisfactory 1o Lender in an amounl sufficient Io discharge lhe lien plus any costs and attorneys' fees, or olher charges lhat could accrue as a result of a foreclosure or sale under lhe lien. In any contesl, Granlor shall defend itself and Lender and shall salisfy any adverse judgment before enforcemenl against lhe Properly. Grantor shall name Lender as an addilional obligee under any surety bond furnished in Ihe conlest proceedings. Evidence of Paymenl. Grantor shall upon demand furnish 1o Lender salisfactory evidence of paymenl of lhe laxes or assessments and shall auIhorize the appropriale governmenlal official Io deliver to Lender al any time a written statement of the taxes and assessments againsl lhe Property. Nolice of Conslrucllon. Granlor shall notify Lender al leasl fifteen (15) days before any work is commenced, any services are furnished, or any malerials are supplied fo lhe Properly, if any mechanic's lien, materialmen's lien, or other lien could be asserted on account of the work, services, or malerials. Grantor will upon requesl of Lender furnish Io Lender advance assurances salisfactory to Lender thai Grantor can and will pay the cosl of such improvemenls. 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 wilh slandard exlended coverage endorsemenls on a replacemenl basis for lhe full insurable value covering all Improvemenls on the Real Property in an amounl sufficienl 1o avoid applicalion of any coinsurance clause, and wilh a standard modgagee clause in favor of Lender. Granlor shall also procure and maintain comprehensive general liability insurance in such coverage amounls as Lender may requesl with Lender being named as addilional insureds in such liability insurance policies. Addilionally, Grantor shall mainlain such olher insurance, including but not limiled to hazard, business interruption and boiler insurance as Lender may require. Policies shal'l be wrillen by such insurance companies and in such form as may be reasonably acceplable 1o Lender. Granlor shall deliver to Lender certificates of coverage from each insurer conlaining a slipulation thai coverage will nol be cancelled or diminished withotd a minimum of ten (10) days' prior written notice 1o Lender and not containing any disclaimer of lhe insurer's liabilily for failure to give such nolice. Each insurance policy also shall include an endorsement providing thai coverage in favor of Lender will not be impaired in any way by any acl, omission or defaull of Grantor or any olher person. Should the Real Properly be located in an area designated by lhe Director of lhe Federal Emergency Managemenl Agency as a special flood hazard area, Gran[or agrees to obtain and maintain Federal Flood Insurance, if available, wilhin 45 days after notice is given by Lender lha[ Ihe Property is located in a special flood hazard area, for the full unpaid principal balance of the loan and any prior liens on lhe property securing the loan, up to the maximum policy limils sel under lhe Nalional Flood Insurance Program, or as olherwise required by Lender, and fo mainlain such insurance for the term of lhe loan. Application of Proceeds. Granlor shall promplly nolily Lender of any loss or damage fo the Property. Lender may make proof of loss if Granlor fails Io do so wilhin fifteen (15) days of the casually. Whelher or nol Lender's security is impaired, Lender may, al Lender's election, receive and relain the proceeds of any insurance and apply lhe proceeds to lhe reduction of lhe Indebtedness, payment of any lien affecting the Properly, or the resloralion and repair of lhe Property. If Lender elects to apply the proceeds to resloration and repair, Grantor shall repair or replace the damaged or deslroyed improvements: in a manner satisfactory Io Lender. Lender shall, upon satisfactory proof of such expendilure, pay or reimburse Granlor from the proceeds for lhe reasonable cost of repair or restoration if Granlor is nol in default under this Mortgage. Any proceeds which have not been disbursed within 180 days after lheir receipt and which Lender has nol commilted 1o the repair or resloration of the Property shall be used firsl 1o pay any amount owing 1o Lender under this Mortgage, then to pay accrued inleresl, and the remainder, if any, shall be applied 1o lhe principal balance of lhe Indebtedness. If Lender holds any proceeds after paymenl in full of the Indebtedness, such proceeds shall be paid Io Grantor as Granlor's interests may appear. Granlor's Report on Insurance, Upon requesl of Lender, however nol more lhan once a year, Grantor shall furnish to Lender a report on each exisling policy of insurance showing: (1) Ihe name of lhe insurer; (2) the risks insured; (3) the amount of the policy; (4) lhe property insured, Ihe lhen current replacement value of such properly, and lhe manner of determining that value; and (5) lhe expiration date of the policy. Granlor shall, upon requesl of Lender, have an independenl appraiser salisfaclory fo Lender delermine the cash value replacemenl cost of lhe Property. LENDER'S EXPENDITURES. If any action or proceeding is commenced that would materially affect Lender's inlerest in lhe Property or if Grantor fails 1o comply wilh any provision of this Mortgage or any Related Documents, including bul nol limited to Grantor's failure to discharge or pay when due any amounts Granlor is required Io discharge or pay under Ihis Mortgage or any Relaled Documents, Lender on Granlor's behalf may (but shall not be obligaled to) take any aclion Ihat Lender deems appropriate, including bul not limited to discharging or paying all taxes, liens, securily inlerests, encumbrances and olher claims, al anY time levied or placed on the Property and paying all cosls for insuring, maintaining and preserving the Property. All such expendilures incurred or paid by Lender for such purposes will then bear inleresl at the tale charged under the Note from the date incurred or paid by Lender 1o the date of repaymenl by Granlor. All such expenses will become a pad of lhe Indebtedness and, al Lender's oplion~.~will (A) be payable on demand; (B) be added to the balance of lhe Nole and be apportioned among and be payable with any inslallment payments Io become due during either (1) lhe term of any applicable insurance policy; or (2) lhe remaining term of the Note; or (C) be treated as a balloon payment which will be due and payable at the Note's maturily. The Modgage also will secure payment of these amounts. Such right shall be in addition to all other rights and remedies to which Lender may be entitled upon Default. WARRANTY; DEFENSE OF TITLE. The following provisions relating Io ownership of the Property are a part of this Mortgage: Title. Grantor warrants thai: (a) Granlor holds good and marketable title of record to the Property in fee simple, free and clear of all liens and encumbrances olher Ihan lhose sel forlh in lhe Real Property descriplion or in any lille insurance policy, title report, or final lille opinion issued in favor of, and accepled by, Lender in conneclion with ~his Mortgage, and (b) Grantor hasthe full right, power, and authority to execute and deliver · lhis Morlgage 1o Lender. ' ' . Defense of Tllle. Subject fo the exception in lhe paragraph above, Granlor warrants and will forever defend lhe lille to the Property againsl the lawful claims of all persons. In the evenl any action or proceeding is commenced thai questions Grantor's title or lhe interest of Lender under this Morlgage, Granlor shall defend the action al Granlor's expense. Grantor may be the nominal party in such proceeding, but Lender shall be enlitled Io parlicipale in the proceeding and 1o be represented in the proceeding by counsel of Lender's own choice, and Grantor Will deliver, or Loan No: 803451 MORTGAGE U.~.~v~L, .~._, (Continued) L' :.,_~ '?' ~ ~ Page 3 cause to be delivered, to Lender sbch instruments as Lender may request from time to time lo permit such participation. Compliance Wllh 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. Survivai of Representations and Warranties. All representations, warranties, and agreements made by Granlor 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 holily 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 lhe proceeding by counsel of its own choice, and Granlor 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 participalion. Application of Net Proceeds. If all or any part of the Properly 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 Properly. The net proceeds of the award shall mean the award after payment of alt reasonable costs, expenses, and attorneysI fees incurred by Lender in connection with the condemnation. IMPOSITION OF TAXES, FEES AND CHARGES BY GOVERNMENTAL AUTHORITIES. The following provisions relating lo governmental taxes, fees and charges are a part ol this Mortgage: Currenl Taxes, Fees and Charges. Upon request by Lender, Grantor shall execute such documents in addition to this Morlgage 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 incurred in recording, perfecting or continuing this Modgage, including without limitation all taxes, fees, documentary stamps, and other charges for recording or registering this Mortgage. Taxes. The following shall constitute taxes to which this section applies: (1) a specific tax upon this type ol 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 from paymenls on the Indebtedness secured by lhis type of Mortgage; (3) a tax on this type of Mortgage chargeable against the Lender or Ihe holder of Ihe Note; and (4) a specific lax on all or any portion of the Indebledness or on payments of principal and interest made by Granlor. Subsequent Taxes. If any lax 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 Defaull, and Lender may exercise any or all of ils available remedies for an Event of Default as provided below unless Granlor either (1) pays lhe tax before it becomes delinquent, or (2) contests lhe tax as provided above in the Taxes and Liens section and deposits with Lender cash or a sufficienl corporate surety bond or other security satisfactory 1o Lender. SECURITY AGREEMENT; FINANCING STATEMENTS. The following provisions relaling to this Mortgage as a security agreemenl are a pad of this Mortgage: Securily Agreement. This instrument shall constitule a Security Agreement to the extent any of lhe Property constitutes fixtures, and Lender shall have all of Ihe rights of a secured party under the Uniform Commercial Code as amended from time to time. Security Interest. Upon request by Lender, Grantor shall take whatever action is requested by Lender to pertecl and conlinue Lender's security interest in the Rents and Personal Property. In addilion to recording this Mortgage in Ihe real property records, Lender may, al any time and wilhoul further authorization from Grantor, file executed counlerparts, copies or reproduclions of lhis Mortgage as a financing statement. Grantor shall reimburse Lender for all expenses incurred in perfecting or continuing this security interest. Upon defaull, Grantor shall nol remove, sever or detach lhe Personal Property from the Properly. Upon default, Granlor shall assemble any Personal Property not affixed to the Properly in a manner and at a place reasonably convenient 1o Grantor and Lender and make it available to Lender within three (3) days after receipt of wrilten demand from Lender to lhe exlent permitted by applicable law. Addresses. The mailing addresses of Grantor (debtor) and Lender (secured party) from which information concerning the security interest granted by lhis Mortgage may be obtained (each as required by the Uniform Commercial Code) are as stated on the first page ol this Mortgage. FURTHER ASSURANCES; ATTORNEY-IN-FACT. The following provisions relating to further assurances and attorney-in-fact are a part of this Morlgage: Furlher Assurances. Al any lime, and from time to time, upon requesl 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, raffled, or rerecorded, as the case may be, al such times and in such offices and places as Lender may deem appropriate, any and all such modgages, deeds of trusl, security deeds, security agreemenls, financing statements, continuation statements, instrume, nls of further assurance, certificates, and other documenls as may, in lhe sole opinion of Lender, be necessary or desirable in order lo effectuate, complete, perfect, continue, or preserve (t) Grantor's obligalions under lhe Note, this Mortgage, and lhe Related Documents, and (2) lhe liens and security interests crealed by this Mortgage as first and prior liens on the Properly, whelher now owned or hereafter acquired by Grantor. Unless prohibited by law or Lender agrees to lhe contrary in writing, Granlor shall reimburse Lender for all cosls and expenses incurred in conneclion with the matters referred to in this paragraph. Allorney-in-Facl. If Grantor fails to do any of lhe things referred to in the preceding paragraph, Lender may do so for and in the name of Granlor and at Grantor's expense. For'such purposes, Granlor hereby irrevocably appoinls Lender as Granlor's attorney-in-fact for lhe purpose ol making, execuling, delivering, filing, recording, and doing all other things as may be necessary or desirable, in Lender's sole opinion, lo accomplish the mailers referred to in the preceding paragraph. FULL PERFORMANCE. If Grantor pays all the Indebtedness v/hen due, and otherwise performs all the obligations imposed upon Grantor under this Mortgage, Lender shall execute and deliver 1o Grantor a suitable satisfaction of this Mortgage and suitable stalemenls of terminalion of any financing statement on file evidencing Lender's security interest in the Rents and lhe Personal Property. Grantor will pay, if permitted by applicable law, any reasonable termination fee as determined by Lender from time to time. EVENTS OF DEFAULT. Each of the following, al Lender's option, shall constilute an Event of Default under this Mortgage: Paymenl Defaull. Granlor iai'is to make. any payment when due under the Indebtedness. Default on Other PaymerHs. Failure of Grantor within the time required by this Mortgage 1o make any payment for taxes or insurance, or any other payment necessary to prevenl filing of or lo effecl discharge of any lien. Olher Defaults. Grantor fails to comply with or lo perform any other term, obligation, covenanl or condition contained in this Mortgage or in any of the Relaled Documents or to comply with or 1o perform any term, obligation, covenant or condition contained in any other agreement belween Lender and Grantor. False Slalemenls. Any warranty, representation or statement made or furnished to Lender by Granlor or on Grantor's behalf under this Mcr!gage or the 'Related Documents is false or misleading in any malarial respecl, either now or at lhe time made or furnished or becomes false or misleading al any time thereafter. Defective Collateralizalion. 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 seCurily inleresl or lien) at any time and for any reason. .' Insolvency. The dissolution or termination of the Trust, the insolvency of Grantor, the appointment of a receiver for any pad ol Grantor's properly, any assignment for the benefit of creditors, any type of credilor workout, or the commencement of any proceeding under any bankruptcy or insolvency laws by or against Grantor. Credilor or Forfeilure 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 properly securing the Indebledness. This includes a garnishment of any of Grantor's accounts, inclu.,ding deposit accounts, with Lender. However, this Event of Detaull shall not apply if lhere is a good faith dispute by Grantor as to the validityp[ [9~...s. 0r~a..b.!..e. qfs_s, pf the claim which is the basis of the credilor or forteilure proceeding and if Grantor g vas Lender wrillen notice of the creditor 'or forfeilu~'e proceeding and deposits with Lender monies or'a sUrety bond for the creditor or forfeiture Proceeding, in an amount determined by Lender, !n its s01e discretion, as being an adequate reserve or bond for the dispute. Breach of Olher Agreemenl. Any breach by Granlor under the terms of any other agreement between Grantor and Lender Ihal is nol remedied wilhin any grace period provided therein, including without limilation any agreemenl concerning any indebtedness or olher obligalion of Grantor Io Lender, whelher exisling now or laler. Loan No: 803451 MORTGAGE '~' · (Continued) '-'.'. ;~",., ~ ")- Page 4 Evenls Affecting Guaranlor. Any of the preceding events occurs wilh respect to any guaranlor, endorser, surety, or accommodation party of any of the Indebtedness or any guaranlor, endorser, surely, or accommodation party dies or becomes incompelent, or revokes or dispules the validily of, or liability under, any Guaranty of the Indebtedness. In the event of a death, Lender, al its oplion, may, but shall not be required lo, permit the guarantor's estate to assume uncondilionally the obligations arising under the guaranty in a manner salisfaclory Io Lender, and, in doing so, cure any Event of DefauII. Adverse Change. A malarial adverse change occurs in Granlor's financial condilion, or Lender believes the prospecl of payment or performance of the Indebledness is impaired. Insecurity. Lender in good failh believes itself insecure. Righl to Cure. If any default, other lhan a defauli in payment is curable and if Grantor has not been given a nolice of a breach of lhe same provision of lhis Mortgage wilhin the preceding lwelve (12) months, il may be cured if Grantor, afler receiving written notice from Lender demanding cure of such defaull: (1) cures lhe defauTl Within fifteen (15) days; or (2) if the cure requires more than fifleen (15) days, immediately initiales steps which Lender deems in Lender's sole discretion to be sufficient 1o cure the default and thereafter continues and completes all reasonable and necessary slaps sufficieni ~o produce compliance as soon as reasonably practical. RIGHTS AND REMEDIES ON DEFAULT. Upon the occurrence of an Event of Default and al any time thereafter, Lender, al 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 Indebledness. Lender shall have the right al ils oplion without notice lo Granlor to declare the entire Indebledness immedialely due and payable, including any prepaymenl penally which Granlor would be required 1o pay. UCC Remedies. With respecl 1o all or any part of lhe Personal Property, Lender shall have all the rights and remedies of a secured party under lhe Uniform Commercial Code. Collect Ranis. Lender shall have lhe right, wilhoul nolice lo Grantor, to take possession of Ihe Properly and collect the Rents, including amounls pasl due and unpaid, and apply lhe net proceeds, over and above Lender's costs, against the Indebtedness. In furtherance of this right, Lender may require any lenant or other user of Ihe Properly Io make payments of reel or use fees directly 1o Lender. If the Rents are collected by Lender, then Granlor irrevocably designates Lender as Granlor's altorney-in-facl to endorse instruments received in payment thereof in the name of Grantor and Io negoliale lhe same and collect lhe proceeds. Payments by tenants or olher users 1o Lender in response to Lender's demand shall salisfy Ihe obligalions for which the payments are made, whether or nol any proper grounds for lhe demand exisled. Lender may exercise !ts rights under this subparagraph either in person, by agent, or through a receiver. Appolnt Receiver. Lender shall have the righl to have a receiver appoinled 1o lake possession of all or any pad of the Property, wilh lhe power to prolecl and preserve the Properly, to operate lhe Property preceding foreclosure or sale, and ~o collect lhe Ranis from the Property and apply the proceeds, over and above the cost of the receivership, against lhe Indebledness. The receiver may serve without bond if permitted by law. Lender's right 1o the appointmenl of a receiver shall exist whether or not lhe apparent value of lhe Property exceeds the Indebtedness by a substanlial amounL Employment by Lender shall nol disqualify a person from serving as a receiver. Judicial Foreclosure. Lender may obtain a judicial decree foreclosing Grantor's interesl in all or any par! of lhe Property. Nonjudicial Sale. If permitted by applicable law, Lender may foreclose Grantor's interesl in all or in any pad of lhe Personal Properly or the Real Property by non-judicial sale. Deficiency Judgment. If permitled by applicable law, Lender may oblain a judgment for any deficiency remaining in ~he Indebtedness due to Lender after applicalion of all amounts received from the exercise of the righls provided in this section. Tenancy al Sufferance. If Gra'nior remains in possession ot the Property after lhe 'Properly is sold as provided above or Lender olherwise becomes entilled Io possession of lhe Property upon default of Grantor, Grantor shall become a tenanl at sufferance of Lender or the purchaser of lhe Property and shall, al Lender's oplion, either (1) pay a reasonable rental for lhe use of the Property, or (2) vacale lhe Property immediately upon the demand of Lender. Other Remedies. Lender shall have all other rights and remedies provided in this Mortgage or the Nole or available al law or in equity. Sale of the Properly. To ~he extent permitted by applicable law, Grantor hereby waives any and all right 1o have the Property marshalled. In exercising its righls and remedies, Lender shall be free Io sell all or any pad of the Property together or separalely, in one sale or by separale sales. Lender shall be entitled 1o bid al any public sale on alt or any podion of the Property. Notice of Sale. Lender shall give Grantor reasonable nolice ot the time and place of any public sale ol the Personal Property or of lhe time after which any privale sale or other inlended disposffion ol lhe Personal Property is ~o be made. Reasonable notice shall mean notice given at least ten (10) days before lhe time of lhe sale or disposition. Any sale of the Personal Property may be made in conjunclion wilh any sale of the Real Properly. Eleclion of Remedies. Election by Lender Io pursue any remedy shall not exclude pursuit of any other remedy, and an election 1o make expenditures or Io take aclion 1o perform an obligation of Grantor under this Mortgage, after Grantor's failure lo perform, shall nol atfecl Lender's right to declare a defautl and exercise its remedies. Nothing under this Mortgage or otherwise shall be conslrued so as 1o limit or restrict the rights and remedies available to Lender following an Evenl of Defaull, or in any way to limit or res~ricl lhe rights and ability of Lender 1o proceed directly against Grantor and/or against any olher co-maker, guaranlor, surety or endorser and/or to proceed againsl any other collateral directly or indirectly securing lhe Indebtedness. Allorneys' Fees; Expenses. If Lender institules any suil or action 1o enforce any of the terms of this Mortgage, Lender shall be enlilled to recover such sum as lhe court may adjudge reasonable as attorneys' fees al lrial and upon any appeal. Whether or not any court action is involved, and ~o the extenl nol prohibited by law, all reasonable expenses Lender incurs Ihaf in Lender's opinion are necessary at any time for the prolection of its interesl or lhe enforcemenl of ils righls shall become a pad of fha Indebtedness payable on demand and shall bear interesl al the Note rate from the dale of the expendilure unlil repaid. Expenses covered by this paragraph include, wilhoul limitalion, however subject to any limits under applicable law, Lender's altorneys' fees and Lender's legal expenses, whether or not there is a lawsuil, including attorneys' fees and expenses for bankruplcy proceedings (including efforts 1o modify or vacate any automatic slay or injunction), appeals, and any anticipaled posl-judgment coileclion services, the cosl of searching records, obtaining title reports (including foreclosure reportS), surveyors' reports, and appraisal fees and ~itle insurance, to the exlent permilted by applicable law. Granlor also will pay any court costs, in addition to all other sums provided by law. NOTICES. Any nolice required 1o be given under lhis Modgage, including withoul limitalion any notice of default and any notice of sale shall be given in wriling, and shall be effeclive when actually delivered, when actually received by telefacsimile (unless otherwise required by law), when deposited with a nalionally recognized overnigh~ courier, or, if mailed, when deposiled in Ihe Untied States mail, as first class, certified or registered mail postage prepaid, direcled to lhe addresses shown near the beginning ot this Morlgage. All copies of nolices of foreclosure from the holder of any lien which has priority over this Mortgage shall be sen~ to Lender's address, as shown near the beginning ot this Mortgage. Any party may change its address for no~ices under ~his Morlgage by giving formal wrilten notice 1o lhe other parties, specifying thai the purpose of lhe nolice is to change lhe party's address. For notice purposes, Grantor agrees Io keep Lender informed at all times of Grantor's currenl address. Unless otherwise provided or required by law, it there is more lhan one Granlor, any nolice given by Lender to any Grantor is deemed to be nolice given to all Grantors. MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a parl of this Mortgage: Amendments. This Mortgage, logether with any Related Documenls, conslitules the entire understanding and agreement of lhe parties as to the mailers set forlh in this Morlgage. No alleration of or amendmenl to lhis Mortgage shall be effective unless given in writing and ~igned by the parly or parties sought to be charged or bound by the alleralion or amendment. Annual Reports. If the Property is used Ior purposes other than Grantor's residence, Grantor shall furnish to Lender, upon requesl, a cerlified stalemenl of nel Operating income received from the Properly during Granlor's previous fiscal year in such form and detail as Lender shall require. "Net operaling income" shall mean all cash receipls from the Property less all cash expendilures made in conneclion with the operation of lhe Properly. 6apllon Headings. Caplion headings in this Mortgage are for convenience purposes only and are nol 1o be used ~o interprel or define lhe provisions of this Mortgage. Governing Law. This Morlgage will be governed by, construed and enforced in accordance wllh federal law and lhe laws of lhe Stale of Monlana. This Morlgage has been accepled by Lender in the Slale of Montana. No Waiver by Lender. Lender shall not be deemed Io have waived any rights under lhis Mortgage unless such waiver is given in writing and signed by Lender, No delay or omission on Ihe 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 Morlgage shall nol prejudice or constitute a waiver of Lender's right olherwise Io demand strict compliance Loan No: 803451 ..... ,,-..,, MORTGAGE ,. ,., ~,, ~ ,h (Continued) ~.. '~ o ,J Page 5 with thal 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 Lender is required under this Morlgage, the granting of such consent by Lender in any instance shall not constitute conlinuing 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 Io any circumstance, that finding shall not make the offending provision illegal, invalid, or unenforceable as to any other circumstance. It feasible, the offending provision shall be considered modified so that it becomes legal, valid and enforceable. If lhe offending provision cannot be so modified, il shall be considered deleted from this Mortgage. Unless otherwise required by law, the illegalily, invalidity, or unenforceability of any provision of this Mortgage shall not aflect 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 wJlh any other interesl or eslate in the Property at any time held by or for the benefit of Lender in any capacity, without the written consent of Lender. Successors and Assigns. Subjecl lo 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 padies, 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 Ihe 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 essen,ce in the performance of this Mortgage. Waiver of Homestead Exemption. Grantor hereby releases and waives all rights and benefits of lhe homestead exemption laws gl the State of Montana as to all Indebtedness secured by this Mortgage. DEFINITIONS. The following capitalized words and terms shall have the following meanings when used in this Mortgage. Unless specifically slated to the contrary, all references to dollar amounts shall mean amounts i.n lawful money of the United Slates 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 Wendell Harris Profit Sharing Plan and includes all co-signers and co-makers signing the Note. Default. The word "Default" means the Default set forth in this Mortgage in the section titled "Default". Environmental Laws. The words "Environmental Laws" mean any an.d all state, federal and local statutes, regulations and ordinances relating to the protection of human health or the environment, including without limitation lhe Comprehensive. Environmental Response, Compensation, and Liability Act of 1980, as amended, 42 U.S.C. Section 9601, et seq. ("CERCLA"), lhe Superfund Amehdmenls and Reauthodzation Act of 1986, Pub. L. No. 99-499 ("SARA"), the Hazardous Materials Transportation Act, 49 U.S.C. Section 1801, et seq., the Resource Conservalion and Recovery Act, 42 U.S.C. Section 6901, et seq., or other applicable state or federal laws, rules, or regulations adopted pursuant the[elo. 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 Wendell Harris Profit Sharing Plan. Guaranty. The word "Guaranty" means the guaranty from guaranlor, endorser, surety, or accommodation parly to Lender, including without limitation a guaranty of ail or part of the Note. Hazardous Substances. The words "Hazardous Subslances" mean materials that, because gl their quantity, concentration or physical, chemical or infectious characteristics, may cause or pose a present or potential hazard to human health or the environment when improperly used, Ireated, 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, malerials or waste as defined by or listed under the Environmenlal Laws. The term "Hazardous Substances" also includes, without limitation, petroleum and pelroleum by-products or any traction thereof and asbestos. Improvements. The word "Improvements" means all existing and future improvements, buildings, structures, mobile homes affixed on the Real Properly, facilities, additions, replacements and other construction on the Real Properly. 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 Documenls 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, together with interest on such amounts as provided in this Mortgage. Specifically, withoul limitation, Indebtedness includes all amounts that may be indirectly secured by the Cross-Collateralization provision of this Mortgage. Lender. The word "Lender" means Rocky Mountain Bank - Whitehall, ils successors and assigns. Mortgage. The word "Mortgage" means lhis Mortgage between Grantor and Lender, Note. The word "Note" means the promissory note dated July 23, 2004, in the original principal amount of $111,674.00 from Grantor to Lender, together with all renewals of, extensions of, modifications of, refinancing5 ol, consolidations of, and substitutions for the promissory note or agreement. Personal Property. The words "Personal Property" mean all equipment, fixtures, and other articles of personal property now or hereafter owned by Granlor, and now or hereafter attached or a/fixed to the Real Properly; together with all accessions, pads, and additions to, all ~eplacemenls of, and all substitutions for, any of such property; and together wilh all proceeds (including without limitation all insurance proceeds and refunds of premiums) from any sale or other disposition of the Property. Property. The word "Properly" means collectively the Real Property and the Personal Property. Real Property. The words "Real Property" mean the real property, interests and rights, as furlher described in this Modgage. Related Documents. The words "Relaled Documents" mean all promissory notes, credil agreements, loan agreements, environmental agreements, guaranties, security agreements, mortgages, deeds of Irusf, security deeds, collateral modgages, and all other insirumenls, agreemenls and documents, whelher now or hereafter existing, execuled in connection with 113e Indebledness. Rents. The word "Ranis" means all presenl and future renls, revenues, income, issues, royalties, profils, and other benefits derived from the Properly. GRANTOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS MORTGAGE, AND GRANTOR AGREES TO ITS TERMS. GRANTOI:~ .Iii Loan No: 803451 MORTGAGE (Continued) Page 6 TRUST ACKNOWLEDGMENT COUNTY OF -\ y_~ {~ ~ '1~ This inslrumenl was acknowledged before me on Harris Profil Sharing Plan. , (Seal) , 20 U._.~_~ by,Wendell Harris, Truslee of Wendell [Type or Print Name] Notary Public for the ~lale of Montana