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HomeMy WebLinkAbout90714850191 0131 WHEN RECORDED MAIL TO: Lewlalen 8tale Bank ~.qaln Office 17 East Cenler PO BoX 32 Lewlston, UT a432o SEND TAX NOTICES TO: RIRIG ENTERPRISES, U..C. 3192 EAST RIVERDALE ROAD RECEIVED 3/18/2005 at 1:58 PM RECEIVING # 907148 BOOK: 581 PAGE: 131 JEANNE WAGNER LINCOLN COUNTY CLERK, KEMMERER, WY MORTGAGE THIS MORTGAGE dated March 11, 2005, is made and executed between RING ENTERPRISES, L.L.C,, an Idaho Limited Liability Company, whose address Is 3192 EAST RIVERDALE ROAD, PRESTON, ID 83263 (referred to below as "Grantor") and LewJston State Bank, whose address Is 17 East Center, PO Box 32, Lewlston, UT 84320 (referred to below as "Lender"). GRANT OF MORTGAGE. For valuable consideration, Grantor mortgagee and conveys lo Lender all nf Greeter's righl, lille, and Inlerest in and to the/oJlowing dascrFoed real properly, together wllh all ' tin rJ0hfs e! way, and appurtenances: all ~..,.,..._~,_ax?_.g ar subsequenlly ereclad or affixed buildings, Improvemenls end fixtures; all easements, · Wa_., ...... .~.~, watercourses and dilch rights [including stock in ulllJlies with dJlch or irrigation dghis); and olher rights, royallies .and profits relalJng Io Ihs mai properly, includln without Ilmltalien all minerals, o11, gas, geothermal and similar matters, (the "Real Pro · " p rty ~ located in LINCOLN County, State o}gWyoming: N1/2S1/2 OF THE SW1/4NW1/4, SECTION 19,TOWNSHIP $2 NORTH, RANGE 118 WEST OF THE 6TH P.M., LINCOLN COUNTY, WYOMING, LESS ANY LAND LYING WITHIN U.S. HIGHWAY 89. The Real Properht or its address is commonl ~.3110. The Re 's, . · known as 681 NOR WASHINGTON AFFON, WY al I roperty tax Identification number is 32181920000700 TH STREET, Grantor presently assigns to Lender all of Grantors right, lille and Interest in end to all present and future leases of [he Properly and Properly. In addilfon, Grantor grants Ia Lender a Un form Commercial Code secudty inlerasl in the Personal Properly end Rents, all Rents &nm 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 lB) PERFORMANCE OF ANY AND AIL OBLIGATIONS UNDER THE NOTE. THE RELATED DOCUMENTS, AND THtS 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 this Mortgage, Grantor shall pay lo Lender all amounts secured by Ibis Mortgage as they baaome due end shall slrictiy perform all of Greeter's obligations under ibis Modgage. POSSESSION AND MAINTENANCE OF THE PROPERTY. Grantor agrees thai Grantor% possession and use ot the Properly shall be governed by the following provisions: · Possession an6 Use. Until the occurrence of an Event of DeMult, Grantor may (1) remain in possession and conlrol of the Properly; (2) USe, operate Or manage Ihs Property: end (3) collect Ihs Rents &om the Properly. Duly to MaJnleln. Grenlar shall malnb, in the Properly In tenantable condition and promptly per/ora all repairs, replacements, end maJnlenance necessary !o preserve Its value. Compliance WXh Envlronmenlal Laws. Grantor reprasenls end warrants to Lender that: (1) During the period aP Greeter's ownership of Ihs P~operty, there has been no usa, generation, manuPaclure, storage, treatment, disposal, release or lhreMened release of any Hazardous Substance by any person on, Under, aboul or [rom lhe Properly; [2) Grantor has no knowledge of, or reason to believe thai Ihere has been, except as Previously ~Jsclosed Io end acknowledged by Lender Jn writing, (a) any breach er violation of any Environmental Laws, (b) generation, manu~a~lure, storage, treatment, disposal release ,Properly by any prior owners or ocou,mnts of ...... '-~. .or. lhrealsn,ed.release of ~[ny Hazardous Subsla an_y use, ,.. r'~u . or ace on under, aboul er fro m such matters; and (3) Except as previousl,, dl.~Pcl~r~ ,_(~).._.nny_.,¢,u~ o.r Ih.re. arched I. itigaIIo, or claims of an kind b , m contraclor, anent ar .*~ .... ,~ ....... x _ u ,u -.a ecKnowleanea ,.,, / ..... ,...._. ...... ,Y. _ Y ns' person relalln ....... u,nunz~a user of [ne ~'roperly shall usa enerale"m n~~ ........ wn~g, la) nelm. or 6ranlor nor any tenantg, Substance on, under, ebouL or from the Properly; and (b) any such activity shall be conducted In compliance wJlh all applicable Mderal, slate, g a ufactura, store, Irual, dispose or or re ease any Hazardous and local laws, ragulMtons end ordinances, including wilhout limitation all Environmental L~ws. Granlor aulhorizes Lender and Its agents to enter upon the Property to make such inspeclfons and Pasts, al Granlor's expense, es Lender may deem appropri~le ~o delermlne oompliance o~ the Properly with this section of the Mortgage. Any inspections or lasts made by Lender shall be for Lender's purposes only and shall not be oonsfrued Io ornate any responsibility or IlablJily on Ihs part et Land r containe~ here~n are based on Granlor's due dill ese I I .,...~t~o,,.G_renlor er fo any other_p, em. on. The represenlatlons and w ranlies waives any future claims against Lender for Indemnity ~ar contribution in Ihs event Grantor becomes liable for cleanup or other costs under any g e I1 nvestl. ..... u ,-,, ,-.uperly for Hazardous ~Ul~slances. Grantor hereby (1) reis s andor such I~w$; and (~} agrees Io indemnify and hold harmless Lender againsl any and all claims, losses, liabilities, damages, penalties, ~nd expenses Which Lender may dlrnctiy or Incllrectly sustain or suffer resulting ~rom a b._~p~af this section af the Martgage or as a canssc -.- .....any Loan No: 139039 MORTGAGE (Continued) ~.,: "' 0 ~_ 3 2 Page 2 generation, manufacture, storage, disposal, release or threatened release occurring prior to Grantor's ownership or interest in the Properly, 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 Modgage 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 podion of the Properly. Without limiting the generality of the foregoing, Grantor Will not remove, or grant to any other party the right 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 Granlor's compliance with the terms and conditions of this Modgage. Compliance with Governmental Requirements. Grantor shall promptly comply with all laws, ordinances, and regulations, now or hereafter in effect, of all governmental 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 such law, ordinance, or regulation and withhold compliance during any proceeding, including appropriate appeals, so long as Grantor has notified Lender in writing 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 post adequate security or a surety bond, reasonably satisfactory to Lender, to protect Lender's interest. Duty to Protect. Grantor agrees neither to abandon or leave unattended the Properly. Grantor shall do all other acts, in addition to those acts set forth above in this section, which from the character and use of the Property are reasonably necessary to protect and preserve the Property. CONSTRUCTION LOAN. If some or all of the proceeds of the loan creating the Indebtedness are to be used to construct or complete construction of any Improvements on the Properly, the Improvements shall be completed no later than the maturity date of the Note (or such earlier date as Lender may reasonably establish) and Grantor shall pay in full all costs and expenses in connection with the work. Lender will disburse loan proceeds under such terms and conditions as Lender may deem reasonably necessary to insure that the interest crealed by this Modgage shall have priority over all possible liens, including those of material suppliers and workmen. Lender may require, among other things, that disbursement requests be suppoded by receipted bills, expense affidavits, waivers of liens, construction progress reports, and such other documentation as Lender may reasonably request. TAXES AND LIENS. The following provisions relating to the taxes and liens on the Property are pad of this Modgage: 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 any liens having priority over or equal to the interest of Lender under this Mortgage, except for those liens specifically agreed to in writing by Lender, and except for the lien of taxes and assessments not due as fudher specified in the Right to Contest paragraph. Right lo Contest. Granter 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. If a 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 corporale surety bond or other security satisfactory to Lender in an amount sufficient to discharge the lien plus any costs and 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 lhe appropriate governmental official to deliver to Lender at any time a written statement of lhe taxes and assessmenls against the Property. Notice of Construction. Grantor shall notify Lender at least fifteen (15) days before any work is commenced, any services are furnished, or any materials are supplied to the Property, if any mechanic's lien, malerialmen's lien, or other lien could be asseded on account of the work, services, or materials. 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 pad of this Modgage: 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 Real Properly in an amount sufficient to avoid application of any coinsurance clause, and with a standard modgagee clause in favor of Lender. Grantor shall also procure and maintain comprehensive general liability insurance in such coverage amounts as Lender may request with Lender being named as additional insureds 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 cedificates of coverage 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 Properly 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 lo the Property. Lender may make proof of loss if Grantor fails to do so within fiffeen (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 Modgage. Any proceeds Loan No: 139039 MORTGAGE (Continued) O~O'~'~"~S'~ Page 3 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 Modgage, 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. Grantor's Report on Insurance. Upon request of Lender, however not more than once a year, Grantor shall furnish to Lender a repod 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 properly insured, the then current replacement value of such properly, 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. LENDER'S EXPENDITURES. If any action or proceeding is commenced that would materially affect Lender's interest in the Properly or if Grantor fails to comply with any provision of this Modgage or any Related Documents, including but not limited to Grantor's failure to discharge or pay when due any amounts Grantor is required to discharge or pay under this Modgage or any Related Documents, Lender on Grantor's behalf may (but shall not be obligated to) take any action that Lender deems appropriate, including but not limited to discharging or paying all taxes, liens, security interests, encumbrances and other claims, at any time levied or placed on the Property and paying all costs for insuring, maintaining and preserving the Properly. All such expenditures incurred or paid by Lender for such purposes will then bear interest at the rate charged under the Note from the date incurred or paid by Lender to the date of repayment by Grantor. All such expenses will become a pad of the Indebledness and, at Lender's option, will (A) be payable on demand; (B) be added to the balance of the Note and be appodioned among and be payable with any installment payments to become due during either (1) the term of any applicable insurance policy; or (2) the remaining term of the Note; or (C) be treated as a balloon payment which will be due and payable at the Note's maturity. 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 to ownership of the Property are a pad of this Modgage: 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 fodh in the Real Property description or in any title insurance policy, title repod, 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 Modgage 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 padicipate 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 lhat the Property and Grantor's use of the Properly complies with all existing applicable laws, ordinances, and regulations of governmental authorities. Survival of Representations and Warranties. All representations, warranties, and agreements made by Grantor in this Modgage 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 pad of this Mortgage: Proceedings. If any proceeding in condemnation is filed, Grantor shall promptly notify Lender in writing, and Grantor shall promptly take such sleps 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 padicipate 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 padicipation. Application of Net Proceeds. If all or any pad 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 podion 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 Modgage: Current Taxes, Fees and Charges. Upon request by Lender, Grantor shall execute such documents in addition to this Modgage 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 of Modgage or upon all or any part of the Indebtedness secured by this Modgage; (2) a specific tax on Grantor which Grantor is authorized or required to deduct from payments on the Indebtedness secured by this type of Modgage; (3) a tax on this type of Modgage 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 Modgage, 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 Modgage: Security Agreement. This instrument shall constitute a Security Agreement to the extent any of the Properly constitutes fixtures, 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. Upon request by Lender, Grantor shall take whatever action is requested by Lender to perfect and continue Lender's security interest in the Rents and Personal Property. In addition to recording this Modgage Jn the real property records, Lender may, at any time and without further authorization from Grantor, file executed counterpads, 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 not remove, sever or detach the Personal Property from the Property. Upon default, Grantor shall assemble any Personal Property not affixed to the Properly in a LOan No: 139039 MORTGAGE (Continued) 0134 Page 4 manner and at a place reasonably convenient to Grantor and Lender and make it available 1o Lender within three (3) days after receipt of writlen demand from Lender to the extent permitted by applicable law. Addresses. The mailing addresses of Grantor (debtor) and Lender (secured party) from which information concerning the security interest granted by this Morlgage may be obtained (each as required by the Uniform Commercial Code) are as stated on the first page of this Modgage; FURTHER ASSURANCES; ATTORNEY-IN-FACT. The following provisions relating to fudher assurances and attorney-in-fact are a pad of this Modgage: 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 modgages, deeds of trust, security deeds, security agreements, financing statements, continuation statements, instruments of fudher 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 Modgage as first and prior liens on the Property, whether now owned or hereafter acquired by Grantor. Unless prohibited by law or Lender agrees 1o the contrary in writing, Grantor shall reimburse Lender for all costs and expenses incurred in connection with the matters referred 1o 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 Grantor pays all the Indebtedness when due, and otherwise performs all the obligations imposed upon Grantor under this Modgage, Lender shall execute and deliver to Grantor a suitable satisfaction of this Modgage and suitable statements of termination of any financing statement on file evidencing Lender's security interest in the Rents and the 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, 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 Modgage to make any payment for taxes or insurance, or any other payment necessary to prevent filing of or to effect discharge of any lien. Other Defaults. 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 Grantor. False Statements. Any warranty, representation or statement made or furnished lo Lender by Grantor or on Grantor's behalf under this Modgage 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 al any time thereafter. Defective Collaterallzation. 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 dissolution of Grantor's (regardless of whether election to continue is made), any member withdraws from the limited liability company, or any olher termination of Grantor's existence as a going business or the death of any member, the insolvency of Grantor, the appointment of a receiver for any part of 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 Grantor. Creditor 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 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 lhere 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 lhe 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 wilh respect to any Guarantor of any of the indebtedness or any Guarantor 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 change occurs in Grantor's financial condition, or Lender believes the prospect of payment or performance of the Indebtedness is impaired. Insecurity. Lender in good faith believes itself insecure. Right to Cure. If any default, other than a default in payment is curable and if Grantor has not been given a notice of a breach of the same provision of this Modgage within the preceding twelve (12) months, it may be cured if Grantor, after receiving written notice from Lender demanding cure of such default: (1) cures the default within fifteen (15) days; or (2) if the cure requires more than fifteen (15) days, immediately initiates steps which Lender deems in Lender's sole discretion to be sufficient to cure the default and thereafter continues and completes all reasonable and necessary steps sufficient to produce compliance as soon as reasonably practical. 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: Accelerale 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. Lo'an No: 139039 ,- s 0135 MORTGAGE 09:~ ~ "" (Continued) Page 5 ucc Remedies. With respect to all or any pad 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, including during the pendency of foreclosure, whether judicial or non-judicial, 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 fees 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. Lander 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 possession of all or any pad of the Properly, with the power to protect and preserve the Property, to operate the Properly 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. The receiver may serve without bond if permitted by law. Lender's right to the appointment of a receiver shall exist whether or not the apparent value of the Property exceeds the Indebtedness by a substantial amount. Employment by Lender shall not disqualify a person from serving as a receiver. Judicial Foreclosure. Lender may obtain a judicial decree foreclosing Grantor's interest in all or any pad of the Property. Nonjudicial Sale. Lender may foreclose Grantor's interest in all or in any pad of the Properly by non-judicial sale, and specifically by "poWer of sale" or "advedisement and sale" foreclosure as provided by statute. Deficiency Judgment. If permitted by applicable law, Lender may obtain a judgment for any deficiency remaining in the Indebtedness due to Lender affer application of all amounts received from the exercise of the rights provided in this section. Tenancy al 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 Modgage 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 Properly marshalled. In exercising its rights 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 podion of the Property. Notice of Sale. Lender shall give Grantor reasonable notice of the time and place of any public sale of the Personal Property or of the time after which any private sale or other intended disposition of the Personal Property is to be made. Reasonable notice shall mean notice given at least ten (tO) days before the time of the sale or disposition. Any sate of the Personal Properly may be made in conjunction with any sale of the Real Property. Eteclion of Remedies. Election by Lender to pursue any remedy shall not exclude pursuit of any other remedy, and an election lo make expenditures or to take action to perform an obligation of Grantor under this Modgage, after Grantor's failure to perform, shall not affect Lender's right to declare a default and exercise its remedies. Nothing under this Modgage 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 Modgage, Lender shall be entitled to recover such sum as the coud may adjudge reasonable as attorneys' fees at trial and upon any appeal. Whether or not any coud action is involved, and to the extent not prohibited by law, 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 payable on demand and shall bear interest at the Note rate from the date of the expenditure until repaid. Expenses covered by this paragraph include, without limitation, however subject to any limits under applicable law, Lender's attorneys' fees and Lender's legal expenses whether or not there is a lawsuit, including attorneys' fees and expenses for bankruptcy proceedings (including effods 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 repods), surveyors' repods, 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 Modgage, including without limitation any notice of default and any notice of sale 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 overnight courier, or, if mailed, when deposited in the United States mail, as first class, cedified or registered mail postage prepaid, directed to the addresses shown near the beginning of this Mortgage. All copies of notices of foreclosure from the holder of any lien which has priority over this Modgage shall be sent to Lender's address, as shown near the beginning of this Modgage. Any party may change its address for notices under this Modgage 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 Modgage: Amendments. This Modgage, together with any Related Documents, constitutes the entire understanding and agreement of the padies as to the matters set fodh in this Modgage. No alteration of or amendment to this Mortgage shall be effective unless given in writing and signed by the party or padies 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 cedified 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 Modgage are for convenience purposes only and are not to be used to interpret or define the provisions of this Mortgage. Governing Law. With respect to procedural matters related to the perfection and enforcement of Lender's rights against the Property, Loan No: 139039 (Continued) Page 6 this Mortgage will be governed by federal law applicable to Lender and Io the extent not preempted by federal law, the laws of the State of Wyoming. In all other respects, this Mortgage will be governed by federal law applicable to Lender and, to lhe extent not preempted by federal law, the laws of the State of Utah without regard to ils conflicts of law provisions. However, if lhere ever Is a question about whether any provision of this Mortgage is valid or enforceable, the provision that is queslloned will be governed by whichever state or federal law would find the provision to be valid and enforceable. The loan transaction that is evidenced by the Note and this Mortgage has been applied for, considered, approved and made, and all necessary loan documents have been accepled by Lender In the State of Utah. Choice of Venue. If there is a lawsuit, Grantor agrees upon Lender's request to submit to the jurisdiction of the courts of Cache County, State of Utah. 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 Lender is required under this Mortgage, the granting of such consent by Lender in any instance shall not constitute continuing consent to subsequen~ 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 ot competent jurisdiction finds any provision of lhis 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. 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 Granlor, 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 performance of this Mortgage. Waiver of Homestead Exemption. Grantor hereby releases and waives all rights and benefits of the homestead exemption laws of the State of Wyoming 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 staled 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 lhe Uniform Commercial Code: Borrower. The word "Borrower" means RING ENTERPRISES, L.L.C. 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 and all state, federal and local statutes, regulations and ordinances relating to the proteclion 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 RING ENTERPRISES, L.L.C.. Guarantor. The word "Guarantor" means any guarantor, surety, or accommodation party of any or all of the Indebtedness. Guaranty. The word "Guaranty" means the guaranty from Guarantor to Lender, including without limitation a guaranty of all or part of the Note. Hazardous Substances. The words "Hazardous Substances" mean materials that, because of 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, 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 Relaled 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, together with interest on such amounts as provided in this Mortgage. Lender. The word "Lender" means Lewiston State Bank, its successors and assigns. Mortgage. The word "Mortgage" means this Mortgage between Grantor and Lender. Nole. The word "Nole" means the promissory note dated March 11, 2005, in the original principal amount of $963,720.00 from Grantor to Lender, together with all renewals of, extensions of, modifications of, refinancJngs of, consolidations of, and substitutions for the promissory note or agreement. The maturity date of this Mortgage is December 11, 2005. 'L(~an No: 139039 MORTGAGE 09'~71~ (Continued) Page 7 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. Relaled 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, royaJties, profits, and other benefits derived from the Property. GRANTOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS MORTGAGE, AND GRANTOR AGREES TO ITS TERMS. GRANTOR: RING~PRISES, L.~~ ,~.L.c.S S. READ, Member of RING ENTERPRISES, LIMITED LIABILITY COMPANY ACKNOWLEDGMENT STATE OF UTAH ) ) SS COUNTY OF CACHE ) On this //¢'7~/3 day of March , 20 05 , before me, the undersigned Notary Public, personally appeared JAMES S. READ, Member and PAUL KING, Member of RING ENTERPRISES, L.L.C., and known to me to be members or designated agents of the limited liability company that executed the Mortgage and acknowledged the Mortgage to be the free and voluntary act and deed of the limited liability company, by authority of statute, its articles of organization or its operating agreement', for the uses and purposes therein mentioned, and on oat~te._d that .they are authorized to e/xecute this Modgage and in tact executed the Mortgage on behalf of the limited liability company. Notary Public in and for the Stale of Utah My commission expires ~ -~-:~ --O ~ , , ARY PUBLIC b CENTER LEWISTON UT 84320 STATE OF UTAH