HomeMy WebLinkAbout95- Farmhouse Partners-Bozeman Limited Partnership Promissory Note
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PROMISSORY NOTE
$50,000.00 );It. Bo~an, Montana
IIJV~ ~u--; 1995
THE UNDERSIGNED, FARMHOUSE PARTNERS-BOlEMAN LIMITED PARTNERSHIP
PROMISES TO PAY TO THE ORDER OF: CITY OF BOlEMAN, Bozeman, Montana, the sum
of Fiftv Thousand and noll00 Dollars ($50.000.00), for value received, together with simple
interest at the rate of 6% (4.18% compounded) thereon according to the following schedule:
The Debtor and the Lender agree that the first payment will be a lump sum payment
of $21 ,000.00, constituting interest only on the loan for the first seven years of the loan. This
first payment will be made upon completion of the project and after 90% occupancy has
been achieved for four months but in no event later than eighteen months from the date of
the loan. This interest is prepaid simple interest. Payments of both principal and interest are
then deferred for seven years from the date the first interest payment is due. Beginning in that
eighth year, the loan will be amortized according to "Schedule A" attached and incorporated
herein by reference. Each annual payment is due on or before the anniversary of the first
payment. The Debtor will pay a late charge of two percent of the scheduled payment
compounded monthly for any payment not made on the date due. In the fifteenth year, the
remainder of the principal, as well as any interest and penalties previously unpaid or
accruing, will be due and payable on or before December 31,2011, and shall be paid in full
or new payment terms negotiated prior to the anniversary date. Failure to make the final
payment on or before the anniversary date shall result in the accrual of 10% interest per
annum upon the remaining balance until paid in full, but in no event to extend more than
three years beyond December 31, 2011. All payments will be applied first to accrued
penalties, then accrued interest and thereafter principal, and shall be credited as of the date
such payment is received. Payment received on a day which is not a Business Day shall be
credited on the next Business Day. Business Day means any day other than those on which
commercial banks andlor the City of Bozeman are authorized to be closed. Any portion or
all of the unpaid balance may be prepaid without penalty. If the loan is prepaid within the
first seven (7) years, the Lender agrees that there will be a credit against the principal balance
in the amount of prepaid but unearned interest as shown by the first payment in Schedule A.
Such prepayment shall not relieve Debtor from making the next regularly scheduled payment
pursuant to the terms of the agreement should a balance be left owing.
In the event of default in the payment of any installment of principal or interest, and
if the default remains uncured for more than Thirty (30) days after written notice to Debtor,
then upon nonpayment thereof after notice in writing to Debtor, the entire balance due
hereunder shall become due and payable in full within thirty (30) days from said second
notice. Failure to exercise this option shall not constitute waiver of the right to exercise the
same in the event of any subsequent default. In the event of default, it is agreed that the
Holder of this Note may recover such necessary expenses as may be incurred in collection,
including reasonable attorney's fees, which reasonable attorney's fees include expenses and
fees of the City Attorney, including fees on appeal. The maker consents to any and all
extensions of time, removals, waivers and modifications that may be granted by the Holder
hereof with respect to payment of security or any part thereof, with or without substitution,
without such extension of time releasing Farmhouse Partners - Bozeman Limited Partnership
from liability hereon.
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FARMHOUSE PARTNERS -
BOZEMAN LIMITED PAR ERSHIP
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By: The Dabney Company, its
General partner
By: William C. Dabney, III
President
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LOAN AGREEMENT J
THIS AGREEMENT is made and entered into this'1/V day Of~ 1995, by
and between FARMHOUSE PARTNERS-BOZEMAN LIMITED PARTNERSHIP w ose mailing
address is 9581 Forest Creek Drive, Bozeman, Montana, hereinafter referred to as "Debtor"
and the CITY OF BOZEMAN, a Montana municipal corporation, whose mailing address is
P.O. Box 640, Bozeman, Montana, 59771-0640, hereinafter referred to as "Lender",
according to the following terms and conditions:
1. Amount of loan
The Debtor agrees to pay the sum of Fifty Thousand and no/1 00 Dollars ($50,000.00)
plus simple interest computed at 6% (or 4.18% compounded) according to Schedule A
referenced in section 2 below. This loan is evidenced by a Promissory Note, attached as
Exhibit A and incorporated herein by reference, and a Fourth Position Montana Trust
Indenture, attached as Exhibit B and incorporated herein by reference, executed by the
Debtor and originates from funds through the Housing Revolving Loan Committee.
The Lender agrees that this security interest in property known as Comstock
Apartments, and identified more fully in Exhibit B, is subordinate to a first mortgage loan,
a contract land seller's second position trust indenture, and a water main extension third
position agreement and trust indenture. Should Debtor default in repayment of the loan,
the Lender may resort to the property secured by the agreement and fourth position trust
indenture and engage in any remedies provided by the laws of the State of Montana,
including foreclosure.
2. Terms for Repayment
The Debtor and the Lender agree that the first payment will be a lump sum payment
of $21,000.00, constituting interest only on the loan for the first seven years of the loan.
This first payment will be made upon completion of the project and after 90% occupancy
has been achieved for four months but in no event later than eighteen months from the date
of the loan. This interest is prepaid simple interest. Payments of both principal and interest
are then deferred for seven years from the date the first interest payment is due. Beginning
in that eighth year, the loan will be amortized according to "Schedule A" attached and
incorporated herein by reference. Each annual payment is due on or before the anniversary
of the fi rst payment. The Debtor will pay a late charge of two percent of the scheduled
payment compounded monthly for any payment not made on the date due. In the fifteenth
year, the remainder ofthe principal (balloon payment), as well as any interest and penalties
previously unpaid or accruing, will be due and payable on or before December 31, 2011,
and shall be paid in full or new payment terms negotiated prior to the due date. Failure to
make the final payment on or before the due date shall result in the accrual of 10% interest
per annum upon the remaining balance until paid in full, but in no event to extend more
than three years beyond December 31,2011. All payments will be applied first to accrued
penalties, then accrued interest and thereafter principal, and shall be credited as of the date
such payment is received. Payment received on a day which is not a Business Day shall
be credited on the next Business Day. Business Day means any day other than those on
which commercial banks and/or the City of Bozeman are authorized to be closed. Any
Farmhouse/City of BozefTUln Loan Agreement p. 1
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portion or all of the unpaid balance may be prepaid without penalty. If the loan is prepaid
within the first seven (7) years, the Lender agrees that there will be a credit against the
principal balance in the amount of prepaid but unearned interest as shown by the first
payment in Schedule A. Such prepayment shall not relieve Debtor from making the next
regularly scheduled payment pursuant to the terms of the agreement should a balance be
left owing.
The Debtor further agrees that a notice shall be given to the Lender upon
commencement of construction. A copy of the Certificate of Occupancy, reflecting
compliance with all applicable Building Codes, when issued, shall be delivered to the
lender. The Debtor shall deliver these items within five days of the event.
3. Entity
By its signature below, the Debtor HEREBY CERTIFIES that FARMHOUSE PARTNERS-
BOZEMAN LIMITED PARTNERSHIP is organized and existing as a Limited Partnership under
and by virtue of the laws of the State of Montana with its principal office at 9581 Forest
Creek Drive, Bozeman, Montana 59715, and is duly authorized to transact business in the
State of Montana.
4. Authorizations
Debtor certifies and lender understands that Farmhouse Partners Limited Partnership,
general partner of the Debtor, is the authorized agent for Debtor. The Dabney Company,
William C,. Dabney, President, is the general partner for Farmhouse Partners Limited
Partnersh i p. Farmhouse Partners limited Partnership is fully empowered to act for and on
behalf of Debtor.
5. Conditions of Loan
During the term of indebtedness, the Debtor will deliver to the Lender, upon request,
annual balance sheets, profit and loss statements, and other financial records pertaining to
the project. The Debtor will make all operating statements and other reasonably identified
records relating to this agreement available for inspection during normal business hours to
the lender.
The parties understand that, during the term of indebtedness, the financial statements
are subject to review by a certified public accountant. Full disclosure is required when
such review is requested. The Debtor will not be required to pay for a duplication of effort
unless some irregularity appears requiring a second opinion. Copies of all summary sheets
and written opinions and reports generated by a certified public accountant during an audit
must be forwarded to the Lender following an audit.
The Debtor will submit status reports on the project on a semi-annual basis unless
sooner requested by the lender. The status report shall included a construction progress
report and an occupancy update. Other information pertaining to the project may be
requested by the lender upon reasonable notice prior to submission of the report.
6. Insurance
Farmhouse/City of Bozeman Loan Agreement p. 2
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Debtor will maintain insurance on the property and the project at all times sufficient
to cover loss by fire, theft or other hazard sufficient to protect Lender's interest in said
property or project. Insurance proceeds shall be payable to Lender for the monetary amount
of Debtor's obligation to Lender. However, the Debtor may, upon written approval of the
Lender, in the event of loss by fire, theft or other hazard, apply insurance proceeds received
by the Lender towards the payment of the loan or use the proceeds to rebuild the
improvements destroyed or damaged. If Debtor chooses this later option, the Lender
understands that the first priority lender will hold the insurance proceeds and pay them to
materialmen, contractors, and laborers for services rendered and materials furnished and
delivered in the rebuilding or the improvements on behalf of the Lender, City of Bozeman.
It is understood that it is the Debtors duty to see that no I iens are fi led upon the premises
by reason of any rebuilding. The Debtor will place copies of the insurance policy or
policies with the Lender within thirty days of the start of construction. Lender shall have
no liability whatsoever for any loss that may occur by reason of the omission or lack of
coverage of any such insurance.
During the term of this loan agreement, when the Debtor renews the insurance policy by
payment of an additional year's premium, the Debtor will provide proof of payment of the
premium to the Lender so as to keep the Lender advised at all times that the property is
insured. Failure to so notify the Lender is an event of default of this agreement.
7. Non-discrimination
The Debtor agrees to abide by the provisions of Title VI of the Civil Rights Act of
1964, section 109 of the Housing and Community Development Act of 1974, the Age
Discrimination Act of 1974, and section 504 of the Rehabilitation Act of 1973 regarding
discrimination based upon race, color, national origin, sex, age or physical challenge.
8. Additional Assurances
The Debtor will remain fully obligated under the provision of this agreement
notwithstanding its designation of any third party or parties with written approval of the
Lender for the undertaking of all or any part of the program with respect to which assistance
is being provided under this agreement. Lender acknowledges that H RDC has a
management agreement with the Debtor. The Debtor will comply with all applicable laws,
rules and regulations of the Lender, the State of Montana, and the United States
Government.
9. Litigation
The Debtor states that to the best of its knowledge and belief there are no suits or
proceedings pending or threatened against or effecting it which, if adversely determined,
would have a material adverse effect on its financial condition. In addition, to the
knowledge of the Debtor, there are no proceedings by or before any governmental
commission, board, bureau or other administrative agency pending or threatened against the
Debtor.
10. Default
The parties agree that time is of the essence in this agreement. Debtor shall be in
Farmhouse/City of Bozeman Loan Agreement p. 3
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default under this agreement upon the happening of any of the following events or
conditions:
a. Debtor defaults in the payment or performance of any obligation, covenant or
liability contained or referred to herein or in any note evidencing the same;
b. Any warranty, representation or statement made or furnished to Lender by or on
behalf of Debtor proves to have been false in any respect when made or furnished;
c. Any event which results in the acceleration of the maturity of the indebtedness
of Debtor to others under any indenture, agreement or undertaking;
d. Death, dissolution, termination of existence, insolvency, business failure,
appointment of a receiver of any part of the property of, assignment for the benefit
of creditors by, or the commencement of any proceeding under any bankruptcy or
insolvency laws by or against, Debtor or any guarantor or surety for Debtor, or entry
of any judgment against them, or failure of any guarantor or surety for Debtor to
provide Lender with financial information promptly when requested by Lender.
e. Debtor fails to pay any local, real, or personal property taxes, to include special
assessments, specific to the property;
11. Notice of Default
Upon the occurrence of any default hereunder and at any time thereafter, the Lender
may declare Debtor to be in default and thereafter give Debtor written notice setting forth
the action or inaction which constitutes the default and giving Debtor thirty (30) days in
which to correct the default. If Debtor fails to correct the default within thirty (30) days of
this notice, the Lender may notify Debtor in writing that the full balance due upon the note
is then due and payable in full within thirty (30) days. It is agreed by the parties hereto that
the provisions of this Agreement provide reasonable and sufficient notice to be given to
Debtor in case of Debtor's failure to perform any of its covenants and that this notice is
sufficient for Debtor to rectify its actions or inactions of default.
12. Demand
Any demand upon or notice to either party shall be addressed and mailed to the
address as identified at the top of page one of this agreement or by personal service.
Mailing shall be by certified mail, return receipt requested, and shall be effective when
served or three days after deposit in the United States Mail, whichever occurs first.
13. Waiver
No waiver of any defau It shall constitute a waiver of any other defau It, nor shall such
waiver constitute a continuing waiver. No waiver of any term or condition of this
agreement shall constitute a waiver of any other term or condition, whether or not similar,
nor shall such waiver constitute a continuing waiver.
14. Amendments
Farmhouse/City of Bozeman Loan Agreement p. 4
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This agreement may not be altered or amended except by a writing signed by the
Debtor, accepted by Lender, and attached hereto.
15. Severability
If one or more provisions of this agreement is deemed to be unlawful or
unconstitutional or stricken by a court of law, all valid provisions that are severable from
the invalid provisions shall remain in effect and be valid and binding on the parties. If any
provision is in conflict with any applicable statute, rule of law, court order or judgment,
then such provision shall be deemed to be modified to conform with such statute, rule or
law, court order or judgment.
16. Construction and Venue
This agreement shall be interpreted according to the laws of the State of Montana.
Venue in any dispute arising from this agreement shall be in the Eighteenth Judicial District,
Gallatin County, Montana.
1 7. Attorney's Fees
In the event that it becomes necessary for any party to this Agreement to retain an
attorney to enforce any terms or conditions of this Agreement, then the prevailing party or
parties shall be entitled to costs and reasonable attorney's fees, including fees of in-house
counselor City Attorney costs and including fees on appeal.
18. Hold Harmless
The Debtor waives any and all claims and recourse against the Lender, including the
right of contribution for loss and damage to persons or property arising from, growing out
of, or in any way connected with or incident to this agreement. Further, the Debtor will
indemnify, hold harmless, and defend the Lender against any and all claims, demands,
damages, costs, expenses or liability arising out of the performance of the Debtor.
19 Assignment
This agreement is not assignable by Debtor without written consent of the Lender, said
consent not to be unreasonably withheld.
20. Titles
The titles used in this agreement are for reference purposes only.
21. Transferability
This Agreement shall be binding upon the heirs, personal representatives, successors
and assigns of the parties. This Agreement and the contemporaneous Promissory Note are
not transferrable without written permission from the Lender, and are subject to the
condition that the Debtor, FARMHOUSE PARTNERS - BOZEMAN LIMITED PARTNERSHIP,
own the property described as the Comstock Apartments for the term of the loan and that
the property remain affordable to persons below 60% of the area median income as defined
and updated annually by the Montana Board of Housing or their successors. Should the
property be sold or not maintained for the designated income group, the Note shall become
due and payable on demand.
Farmhouse/City of Bozeman Loan Agreement p, 5
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FARMHOUSE PARTNERS-
BOZEMAN LIMITED P NERSHIP
By:
Far r I e
Partnership; its General Partner
By: The Dabney Company, its
General Partner
By: William C. Dabney, III
President
STATE OF MONTANA )
) ss.
County of Gallatin )
On this~ day of November 1995, before me, the undersigned, a Notary Public
for the State of Montana, personally appeared William C. Dabney III, known to me to be
the President of the Dabney Company, a General Partner of Farmhouse Partners Limited
Partnership, a General Partner of Farmhouse Partners - Bozeman Limited Partnership,
and acknowledged to me that he executed the within instrument for an on behalf of such
Limited Partnership.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my Notarial
Seal the day and year first above written.
(SEAL)
Notary Public for the State of
Montana, residing at Bozeman
My Commission Expires 6/15/99
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CITY OF BOZEMAN
By:
ATTEST:
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(tJ: ~ JJJIt~
Robin L. Sullivan
Clerk of Commission
STATE OF MONTANA )
) ss.
County of Gallatin )
On this~ day of November 1995, before me, the undersigned, a Notary Public
for the State of Montana, personally appeared RONALD F. BREY and ROBIN L.
SULLIVAN, known to me to be the Assistant City Manager and the Clerk of Commission
of the City of Bozeman and the persons whose names are subscribed to the within
instrument and acknowledged to me that they executed the same for and on behalf of
the City of Bozeman.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my Notarial
Seal the day and year first above written.
(SEAb)
otary Public for the State of
Montana, residing at Bozeman
My Commission Expires 6/15/99
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SCHEDULE A
Initial Annual Ending
Loan Loan Principal Loan
Balance Payments Interest Reduction Balance
YR. 1 50,000. 20,000. 21,000. 0 50,000.
YR. 2 50,000. 0 0 0 50,000.
YR. 3 50,000. 0 0 0 50,000.
YR. 4 50,000. 0 0 0 50,000.
YR. 5 50,000. 0 0 0 50,000.
YR. 6 50,000. 0 0 0 50,000.
YR. 7 50,000. 0 0 0 50,000.
YR. 8 50,000. 3,500. 3,000. 500. 49,500.
YR. 9 49,500. 4,000. 2,970. 1,030. 48,470.
YR.l0 48,470. 5,000. 2,908. 2,092. 46,378.
YR.ll 46,378. 5,000. 2,783. 2,217. 44, 1 61.
YR.12 44, 1 61. 5,000. 2,650. 2,350. 41,811 .
YR.13 41,811. 5,000. 2,509. 2,491. 39,319.
YR.14 39,319. 5,000. 2,359. 2,641. 36,678.
YR.15 36,678. 5,000. 2,201. 2,799. 33,879.
TOTAL PAYMENTS 58,500. 42,379. 16,121.
BALANCE DUE: $33,879.00
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FORM 2$-STOCl[ FORM nur ',nUt""'. e... "UUI... ".IIIT.
MONTANA TRUST INDENTURE
THIS TRUST INDENTURE, Made thiB.);;;t:!!day of........jj}iletait2b-........................., 199t:-
between...Ear.mh.o.u.se...}?ax.tnfD;J;s.....B.g.zqlma,n,...I"im,i.t,ed....P-a;r::l;:.n€-E-8fl'1 Ip>se mailing ad dress is
~.LQ...._.B.Qx...~].&.6.,....EQz.em.an.,...l1antalla...5.9..7.1.l::.1.2.4.6.........................................................................
................................................................, as GRAN TOR, ...l'.aJJ..l. ...J..~....Lu.w.e.,....Bo.z..em.an.. .Ci.ty... ................
At.f:. o.r n.e~ ......... ......... ...................... ... ....... ..... ... ................_.... .......... .. .... ................ ........ ................. .................... ... .. ..n....
......................................:::.......:..........:...., with pr In Ci pal. 0 ffi ce a t....!1.1~:::Eas..'f..:jd.a.i" ll...S.UB f=.t..,. ...B..o~ ~n a n
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M on tana, as TR US TEE, an d.....Ci.t.y...o;f.. ..So.z.em an....... .;. ....... ...... ..................... ..... ......... ......... ................ ........,
-....--------------.....-.........--...........--......-------------..------............-----------........--.......---..--............................_~..........._...................._-------_.._........-----.......--.------------------
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with principal offi ce a t..........4.lL.Ea.s:t....M.ail1...S t.r.ee.t.,....SO.z.eman.T...Mo~.ta.IHi..._59.:].J..5............,
as BENEFICIARY,
WITNESSETH: That Grantor hereby irrevocably GRANTS, BARGAINS, SELLS, CONVEYS
AND WARRANTS TO TRUSTEE IN TRUST, nevertheless, WITH POWER OF SALE that certain
thirty (30)
real property, which docs not excced ~:rm;:~;l5:.): acres in area, situated in the County of..........................
.__............................_...................................., State of Montana, particularly deseribed as follows, to-wit:
Lot 1 of Minor Subdivision #162, situated in the
Southeast Quarter of Section 8, Township 2 South,
Range 6 East, P.M.M., Gallatin County, Montana
according La ~he official plat uf record with the
County Clerk and Recorder
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TOGETHER WITH: (1) All buildings, fixtures and improvements thereon and all water rights,
rights-of-way, tenements, hereditaments, privileges and appurtenances thereunto belonging, now owned
or hereafter acquired, however evidenced, used or enjoyed with said premises or belonging to the
same i (2) All right, title and interest hereafter acquired in or to any of said premises, hereby also re-
leasing, relinquishh.g and waiving all exemptions, rights of dower and homcstead, in or to said premo
ises, vested or inchoate i (3) All heating, air eonditioning, plumbing and lighting facilities, equipment
and fixtures now or hereafter installed upon or within said premises, used or proper or necessary to con-
stitute the said premiBes a habitable, usable or operating unit-all of said property being designated
and deemed for the purposes of this instnlment a part of the realty i and (4) All of the rents, issues and
profits of said premises, SUBJECT, HOWEVER, to the right, power and authority hereinafter con-
ferred upon Beneficiary to collect and apply such rents, issues and profits i
.
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flLH 158 PACf18(l2
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J~'OR THE PURPOSE OF SECURING; (1) Payment of the principal sum of.Eif.t.y....T.housand
and..liJQI1D.0..........~~.............................Dollars ($..5.0....0.0.0.....0.0.........) with interest thereon according to
the terms of a promissory - note, clated...................................................................., 19...90. (and any extensions
and/or renew a!::.; or modifications thereof), made by Grantor payable to the order of Beneficiary in in-
stallments, the last of which, unless sooner paid, will bc due and payable on....D.e.c.embe.l;....3.l.,....ZQ.J..l
19........ ; (2) Payment of all sums expended or advanced by Beneficiary under or pursuant to the
terms hereof, together with interest thereon as herein provided; (3) Performance of each agreement
of Grantor herein and in said note contained; and (4) Payment of any future advances, in no event
cxcccding............................................................Dollars, now in contemplation of the partics, if the Beneficiary
at its sole option elects to make any advanccs whatsoever.
_ TO J>RO'l'k~C1' THRBECURlTY- OF THIS 'l'Ill.T$'J;' INm~l"~~'U:RE-;--ANJ)--l<'0H.-{)'1'IIgH PUgpm;BS,
GRANTOR AGHEES;
1. To keep said properth in good condition and repair: not to remove or demolish ant building thereon: to
complete and restore srompt y and in a good and workmanlike manner any buildinK whicmay be constructe~
damaled or destroye thereon, and to pay when due all claims for labor performed and materials furnishe
there or: to comply with all laws, covenants and restrictions affecting said property: not to commit or permit
waste thereof: not commit, suffer or permit any act upon said property in violation of tbe law: to do all other acta
which from the character or use of said property may be reasonably necessary, the specific enumerations herein
not excluding the general; and if the loan secured hereby or any part thereof is being obtained for the purpose of
financing construction of improvements on said property, Grantor further agrees:
(a) To commence construction promptly and to pursue the same with reasonable diligence to completion in
accordance with plans and specifications satisfactory to the Beneficiary, and
(b) To allow Beneficiary to inspect said property at all times during construction.
Trustee, ua,on ~resentation to it of an affidavit signed by Beneficiary, setting forth facts showing a default
by Grantor un er t is numbered paragraph, is authorized to accept as true and conclusive all facts and statements
therein, and to act thereon as provided in this instrument, and as allowed by law.
2. To provide, maintain and deliver to Beneficiary, insurance of such type or types and amounts as Benefi-
ciary may require, on the improvements now existing or hereafter erected or placed on said property. Such insur.
ance shall be carried in companies approved by the Beneficiary with loss payable clause in favor of and in form
acceptable to Beneficiary. In the event of loss, Grantor shall give immediate notice to Beneficiary, who may
make proof of loss and each insurance company concerned is hereby authorized and directed to make payment for
such loss directly to Beneficiary instead of to Grantor and Beneficiary jointly, and the insurance proceeds, or
any part thereof, may be applied by Beneficiary, at its option, to the reduction of the indebtness hereby secured
or to the restoration or repair of the property damaged.
3. To deliver to, pay for and maintain with Beneficiary until the indebtness secured hereby is paid in full,
such evidence of title as Beneficiary may require, inc:1uding abstracts of titie or- polices of tit.le insurance and all)'
extensions or renewals thereof or supplements thereto.
4. To pay before delinquent all taxes and assessments, including interest and penalities, affecting said prem-
ises and improvements; to promptly pay and discharge all encumbrances, charges and liens on said property
which at any time are, or appear to be, prior or superior hereto. In addition to the payments due in accordance
with the terms of the note hereby secured, Grantor shall, at the option and on demand of the Beneficiary, pay to
the Beneficiary monthly and concurrently with payment of prinCipal and interest, a sum equal to one-twelfth
(l/12th) of the annual taxes, assessments, insurance premiums, maintenance and other charges upon the property,
as estimated by the Beneficiary, in trust nevertheless for Grantor's Use and benefit and for payment by Benefi-
ciary of any such items when due. The failure of Grantor to make any of such payments shall constitute a default
under this trust.
5. Except as otherwise expressly provided herein, to pay all costs fees and expenses of this trust, includ-
ing cost of search and evidence of title, advertising and recording expense, documentary taxes and Trustee's and at-
torney's fees as allowed by law.
6. Should Grantor fail to make any payment or to do any act as herein provided, then Beneficiary or Trustee,
without obligation so to do and without notice to or demand upon Grantor and without releasing Grantor from any
obligation hereof, may make or do the same in such manner and to such extent as either may deem necessary to
protect the security hereof, Beneficiary or Trustee be,ing authorized to enter upon said property for such purposes.
7. To pay immediately and without demand all sums expended hereunder by Beneficiary or Trustee, with in.
terest from date of expenditure at thc rate of eight per cent (8%) per annum until paid, and the payment thereof
shall be secured hereby.
IT IS MUTUALLY AGREED THAT:
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8. Without affecting the liability of any person, includinl; Grantor, for the payment of any indebtedness
secured hereby, or the lien of this Trust Indenture on the remamder of the Eroperty for the full amount of any in.
debtedness unpaid, Beneficiary and Trustee are respectively empowered as ollows; Beneficiary may from time to
time and without notice:
(a) Release any pres on liable for payment of any of the indebtedness,
(b) Extend the time or otherwise alter the terms of paymcnt of any of the indebtedness,
(c) Alter, substitute or release any property securing the indebtedness:
Trustee may, at any time and from time to time, upon the written request of Beneficiary:
(a) Consent to the making of any map or plat of the property,
(b) Join in granting any easement or creating any restriction thereon,
(c) Join in any subordination or other agreement affecting this Trust Indenture or lien or charge thereof,
(d) Reconvey, without warranty, all or any part of the property.
9a. Both parties agree that Beneficiary may, if Beneficiary so elects, procure and thereafter continue during
the term of this Indenture, for as long as Beneficiary desires, a form of insurance'acceptable to Beneficiary insur-
ing Beneficiary against any loss sustained by Beneficiary by reason of any default in payment by Grantor of the se-
cured indebtedness. If Beneficiary elects to procure such insurance, Grantor shall promptly reimburse Beneficiary the
full amount of the initTal premium for such insurance. During- the term of this Indenture, Grantor shall each month
deposit in escrow with Beneficiary 1/12th of the next following anticipated annual premium for such insurance, said
deposit to be made at the same time and place as Grantor makes monthly payments on the aforementioned promis-
. -
.1 .' .~ . . . FltII'158fACU603 .
sOr)' note. Beneficiary may thereafter pay all annual renewal premiums from such escrow. Should the amount de.
posited in escrow be insufficient to pay any renewal premium in full as the same become (~e, Grantor shall immedi-
~telYuPondemand deposit with or pay to Beneficiary such additional amount as may be sufficient to pay the re.
newal premium iri full. Failure of Grantor to payor deposit any of the amounts referred to herein shall constitute
a default of the terms of this Indenture, Mortgagor further agrees to deposit in escrow with Beneficiary 1/12 of the
annual premium for hazard insurance coverage and annual taxes and assessments each month. Failure of the Grantor
to deposit any of the above amounts in the escrow account shall constitute a default of the terms of this indenture.
9b. Upon written request of Beneficiary stating that all sums secured hereby have been paid, and upon surrender
of this Trust Indenture and said note to Trustee for cancellation and retention and upon payment by Beneficiary of
its fees, Trustee shall reconvey to Grantor, without warranty, the property then held hereunder.
10. As additional security, Grantor hereby assigns to Beneficiary, during the continuance of these trusts, all
rents, issues, royalties, and profits of the property affected by this Trust Indenture and of any personal property
located thereon. Until GI..ntor shall default in the payment of any indebtedness secured hereby or in the per-
formance of any agreemen. hereunder, Grantor shall have the right to collect all such rents, issues, royalties, and
profits earned prior to default as they become due and payable. If Grantor shall default as aforesaid, Grantor's right
to collect any of such monies shall cease and Beneficiary shaU have the right, with or without taking possession
of the property affected hereby, to collect all rents, royalties, issues, and profits. Failure or discontinuance of
Beneficiary at any time or from time to time to collect any such monies shall not in any manner affect the subse-
quent enforcement by Beneficiary of the right, power, and authority to collect the same. Nothing contained
herein. nor the exercise of the right by Beneficiary to coUect, shall be, or be construed to be, an affirmation by
Beneficiary of any tenancy, lease or option, nor an assumption of liability undcr, nor subordination of the lien
or charge of this Trust Indenture to any such tenancy, lease or option.
11. Upon anydefa~Jt by__ Gr~ntor hereunder, Beneficiary may at any time without notice, either in person, by
a~ent, or by a receiver to be appointed by a court (Grantor- hereby consenting to the appoiritment of Beneficial Y liS
such receiver), and without re~ard to the adequacy of anl. security for the indebtedness hereby secured, enter upon
and take possession of said property or any part thereo , in its own name sue for or otherwise collect said rents,
issues, and profits, including those past due and unpaid, and apply the same, less cost and expenses of operation
and collection, including reasonable attorney's fees, upon any indebtedness secured hereby, and in such order as Bene_
ficiary may determine.
12. The entering upon and taking possession of said property, the collection of such rents, issues. and profits,
or the proceeds of fire or other insurance policies, or compensation or awards for any taking or damage of said
property. and the application or release thereof as aforesaid, shall not cure or waive any default or notice of de-
fault hereunder or invalidate any act done pursuant to such notice.
13. Time is of the essence hereof. Upon default by Grantor in the payment of any indebtedness secured here-
by or in the performance of any agreement hereunder, all sums secured herebr shall immediately become due and
payable at the option of the Beneficiary. In the event of such default, Beneficiary may execute or cause Trustee
to execute a written notice of default and of election to cause such property to be sold to satisfy the obligations
hereof, and Trustee or Beneficiary shall file such notice for record, in each county wherein said property or some
part thereof is situated. Beneficiary shall also deposit with Trustee, the note and all documents evidencing expendi-
tures secured hereby.
14. After the lapse of such time as may then be required by law following the recordation of said notidlof de-
fault and of election to cause said property to be sold, and notice of default and notice of sale havinKlleeri~iX\C}l; as
then required by law, Trustee, or its attorney, without demand on Grantor, shan sen said propertx. \Qlr'the da'~"I1
at the time and place designated in said notice of sale, either as a whole or in separate Parcels; .and in'"!\ucth.
order as it may determine (but subject to any statutory right of Grantor to direct the order in which sjJCh properw;' .
if consistin~ of several known lots or parcels, shan be sold), at public auction to the highost.Jlidder...the pitrthase-,
price payable in cash in lawful money of the United States at the time of sale. The '}ll',oon c8fldilcting the'...
sale may. for any cause he deems expedient, postpone the sale for a period not exceeding f~een (15) days by
public proclamation by such person at the time and place fixed in the notice of sale, and no othl!f notice-of the .post-'
poned sale need be given. Trustee shall execute and deliver to the purchaser its deed conveying said pro1"ertyso s(lld~
but with out any covenant of warranty, express or implied. The recitals in- the-deed -of. anymatteJ;& Qr (il...ta ~Y_'- -
conclusive proof of the truthfulness thereof. Any person includin~ Beneficiary (but excluding Tru'ste~) may bid\'at
the sale. Alter deducting all costs and expenses of exercising the power of sale and of the sale, including COst of
search and evidence of title, advertising and recording expense, documentary taxes and Trustees' and attorney's fees.
Trustee shall apply the proceeds of sale to ~ayment of all amounts secured hereby and due hereunder, including an
Bums expended by the Trustee and BenefiCiary, or either of them, with accrued interest thereon at the rate of
eight per cent (8%) per annum from the date of expenditure thereof, and the surplus, if any, to the person or per-
sons legally entitled thereto; provided that the Trustee, in its discretion, may deposit such surplus with the County
Clerk and Recorder of the county in which the sale took place.
15. Grantor agrees to surrender possession of the hereinabove described trust property to the purchaser at the
aforsaid sale on the tenth (10th) day following said sale, in the event such possession has not previously been de-
livered by Grantor.
16. Each abstract of title, title insurance policy and aU other evidences of title, and an hazard insurance
policies placed or deposited with the Beneficiary shall be deemed an incident to the title to the trust property and
upon foreclosure by exercise of power of sale. or otherwise. shall pass to the purchaser and the same are hereby
. pledged as additio,nal security for payment of the indebtedness secured hereby.
~,' 17. Upon the occurrence of any default hereunder, Beneficiary shaU have the option to declare aU sums se-
.' ~'cured hereby immediately due and payable and foreclose this Trust Indenture in the manner provided by law for
., . the foreclosure of mortgages on real property and Beneficiary shall be entitled to recover in such proceedings aU
costs and expenses incident thereto, including a reasonable attorney's fee in such amount as shall be fixed by the
_:. :'Court.
18. Except as may be otherwise provided herein, Grantor agrees to pay to Beneficiary or Trustee the costs and
~'upenses, including- a reasonable attorney's fee, incurred by either of them in instituting, prosecuting or defending
. any Court action 10 which Grantor does not prevail, if such action involves the interpretation hereof or perform-
ance hereunder by a party hereto or the breach of anYjrovision hereof by a party hereto, including but not limited
'to an action to obtain possession of the above describe property after exercise of the power of sale granted here-
under.
,l '" 19. This Trust Indenture shall apply to, inure to the benefit of and bind all parties hereto, their heirs, legatees,
devisees, administrators, executors, successors and assigns. All obligations of Grantor hereunder are joint and sev-
eral. The term "Beneficiary" shall mean the owner and holder, including any pledgee, of the note secured hereby.
In this Trust Indenture, whenever the context so requires, the masculine gender includes the feminine and/or neu-
ter, and the singular number includes the plural.
20. Trustee accepts this Trust when this Trust Indenture, ,duly executed and acknowledged, is made a public
record as provided by law. Trustee is not obligated to notify any party hereto of a pending sale under any othe.f
trust indenture or of any action or proceeding in which Grantor, Beneficiary, or Trustee shall be a party, unles,s
brought by Trustee. .,
'1"..
21. This Trust Indenture is made within the State of Montana pursuant to the Small Tract Financing Act of
Montana and is not made or taken in substitution for any mortgage In existence on the effective date of sai(Act.
22. Grantor requests that a copy of any notice of default and of any notice of sale hereunder be mailed to him
at the address hereinabove set tllh..__
(has) (have) hereunto set (his) (her) (its) (their) hands
th
F armh a Lite d P ~'~'t;~;~'h'ip"".'''''''''''--'''''''''''''''''''''''''''''.h'.h'''''''''
b y-:....F.a..~&~...P.aJ;.t.~an;.s....L.i.m.i.t.9Q,...P.ar t n &E.sJ.::l4..f>'..............................................................~............
by: The Dabney Company, its General Partner
by: william C. Dabney III, its President
~ -
.. ~: )'
" .<i, . ..
, ',I .
~ J
filM 158 fAtE 1804
STATE OF MONTANA 1
" ' , ., .' tss.
County of._....G.allat.i..l1.........................................
, On this..._...__.~.....~...day of..._..............................._............................, 19........, before me, a Notary Public
for the S ta te of Montana, personally a ppeared.........._................_........__........................-....................-........-...,
known to me to be the person(s) whose name(s) is (are) subscribed to the within instrument, and
acknowledged to me that (he) (she) (they) executed the same.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my Notarial Seal the day
and year first above written.
..._----.--..----....--_...........--_.................--......----....-.......----........................-......--....
Notary Public for the State of Montana.
(Notarial Seal) Residing at........................ ........................ ........ ........ ..........
My Co m 1'1 issi 0 n ex pires................................ ....................
STATE OF MONTANA, }
ss.
County of..._..G.a.l.la:t..in....._.._.............................
On this...~~_....day of.i!2~.........................-..., 19&2..-: before me, a Notary Public
for the State of Montana, personally appeared....Yii.l.liam...C.....Dahn.e.jl...~I,I..................................m....
p ;::.id-~t-..;fth~-..~.~-b~;......c~.:.......81~r~~T1i~}f~~.~lfTnmr.s"'LI~ro~d top ~ifon~erth~i p
__..........______..._...._.IT.._.......J......._......_... ..........................1...~..G.Efneill...Ji!.a...:I;..n.Qx...Q~...
. Bozema~ Li~~tea Partnels~~
oL..E1tmhnlls~ P.az:t.ue.r.s.:_, the :RW.RmH!l'Jkthat executed t e WIt In InS rumen an ac wI.
edged 0 me, ~,:such ~~:"~.xexecuted the same.
',~
, . ",~:F-,i\' limited fartnership
" II ~REOF. have hereunto aet my h d and r Notarial Seal the day
e wrItten. . . ........_........... ...... ...............~.._...
Resid::ta::..~.~~for t~~ ..S~.~~:..:~..~~::~::::......_..
My Commission e pircs......a..::I.l.2::-:2!..-;_...............
-- --- -..---.., - ... ..-..-
REQUEST FOR FULL RECONVEYANCE
TO: TRUSTEE ......._..... ...... ...............:.. ....._.. ....... ....... ......., 19........
The undersigned is the legal owner and holder of the note and all other indebtedness secured by
the within Trust Indenture. Said notc, together with all other indebtedness secured by said Trust In-
denture, has been fully paid and satisfied and you are hereby requested and directed on payment to
you of any sums owing to you under the terms of said Trust Indenture, to cancel said note above men-
tioned and all other evidences of indebtedncss secured by said Trust Indenture delivered to you
herewith, together with said Trust Indenture, and to reconvey, without warranty, to the parties desig.
nated by the terms of said Trust Indenture, all the estate now held by you thereunder. .
, =::~~~~~=::~~~-~~::=~:::~=:::~~::~~~:::::~~~~=:::]:i
Mail reconveyance '0_________.________________________,______...__.__...____-------"'---I.i
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