Cleo State Bank v. Austin Carter

THE DISTRICT COURT IN AND FOR ALFALFA COUNTY STATE OF OKLAHOMA CLEO STATE BANK, a state-chartered banking institution; Plaintiff, v. AUSTIN CARTER; CHEYENNE L. CARTER; if living, if deceased, her unknown heirs, executors, administrators, devisees, trustees and assigns, if any; KELSI CLAFLIN, COUNTY TREASURER, ALFALFA COUNTY, OKLAHOMA; BOARD OF COUNTY COMMISSIONERS. ALFALFA COUNTY, OKLAHOMA; PORTFOLIO RECOVERY ASSOCIATES, LLC; and THE UNKNOWN OCCUPANTS OF 316 N. 5th Street, Carmen, OK, if any; Defendants. PETITION COMES NOW the Plaintiff, Cleo State Bank, a state-chartered banking institution, (hereinafter referred to as "CSB" and/or "Plaintiff") and for its causes of action against the above-captioned Defendants, would state the following: Jurisdiction and Venue 1. CSB is a state-chartered bank with its principal place of business in Major County, Oklahoma 2. Defendant, Austin Carter, is an individual residing in Alfalfa County, Oklahoma, (hereinafter referred to as "Carter" and/or "Defendant"). 3. Jurisdiction and venue are proper pursuant to Okla. Stat. tit. 12, §§ 133, 134, and 142. Count I - Indebtedness 4. The Defendant, Austin Carter, executed and delivered his Promissory Note No. 30268 to CSB in the original principal amount of $46,648.20, on August 30, 2024. A copy of said Promissory Note No. 30268 is attached hereto as Exhibit “A” and made a part hereof by reference. 5. Carter executed and delivered said Promissory Note No. 30268 payable to the order of CSB for good and valuable consideration. 6. Promissory Note No. 30268 was a renewal of prior Promissory Note Nos. 30236 and 30207, which were given to CSB for good and valuable consideration. 7. The above-described Promissory Note No. 30268 is now in default for failure to make payments due thereunder. 8. Presently there is due, owing, and unpaid to CSB from Carter pursuant to the Promissory Note No. 30268, the principal sum of $37,228.81, plus accrued interest in the amount of $1,368.16, as of March 12, 2026, plus interest continuing to accrue at the default contract rate or the statutory rate, whichever is greater, from said date, plus late charges in the amount of $200.00, plus all other charges due and proper under said Promissory Note. WHEREFORE, premises considered, CSB respectfully requests that this Court grant it judgment against Carter pursuant to the Promissory Note No. 30268, in the principal sum of $37,228.81, plus accrued interest in the amount of $1,368.16, as of March 12, 2026, plus interest continuing to accrue at the default contract rate or the statutory rate, whichever is greater, from said date, plus late charges in the amount of $200.00 plus all other charges due and proper under said Promissory Note, including but not limited to, attorney fees, court costs, accruing late charges, taxes, insurance, plus any and all other fees, charges, and/or relief due and proper in favor of CSB as set forth under said Promissory Note No. 30268 and/or as may be determined by this Court. COUNT II – Real Property Collateral CSB re-alleges and re-adopts all statements made in Count I and, in addition, would allege and state as follows: 9. As part of securing Promissory Note No. 30268, as renewed, and for purposes of securing all sums due and owing under Promissory Note No. 30268, Austin Carter delivered to CSB a Mortgage dated June 24, 2024, and recorded August 22, 2024, in Book 901, Page 638, in the records of the County Clerk of Alfalfa County, Oklahoma (hereinafter referred to as “CSB’s Mortgage”); CSB’s Mortgage is attached hereto as Exhibit “B” and covers the following described real property: Lots Eighteen (18), Nineteen (19), Twenty (20), Twenty-one (21), Block Thirty-one (31), in the original Town of Carmen, Alfalfa, County, Oklahoma (hereinafter referred to as “Real Property Collateral”). 10. CSB’s Mortgage granted unto CSB a good and valid mortgage lien on the Real Property Collateral described above. The required mortgage tax was paid on CSB’s Mortgage by the mortgagee, receipted as shown by the endorsements on CSB’s Mortgage. 11. CSB’s Mortgage is now in default due to, among other defaults, failure to remit payments due thereunder. 12. CSB’s Mortgage provides that, if any default occurs under the promissory note for which it is security, CSB is entitled to foreclose CSB’s Mortgage and for the recovery of attorney fees, costs, and abstract and title expenses associated with the same. 13. CSB is the current owner and holder of CSB’s Mortgage. 14. CSB has elected, as provided in the Mortgage, to foreclose, without notice, and will elect, at the time judgment is rendered, to waive appraisement or not. 15. The Defendants, Kelsi Claflin, Treasurer, Alfalfa County, Oklahoma; and the Board of County Commissioners of Alfalfa County, Oklahoma may be claiming some interest in and to some or all of the Real Property Collateral due to unpaid real and/or personal property taxes, or otherwise. Said interest, if any, is subsequent, junior, and inferior to CSB’s interest. 16. The Defendant, Portfolio Recovery Associates, LLC, may be claiming some interest in and to some or all of the Real Property Collateral due to a certain Order Granting Motion for Default Judgment and Journal Entry of Judgment which appears at Book 913, Page 237 of the records of the County Clerk of Alfalfa County, Oklahoma. Said interest, if any, is subsequent, junior, and inferior to CSB’s interest. 17. The Defendants, The Unknown Occupants of 316 N. 5th Street, Carmen, OK, if any, may be claiming some right, title, and interest in and to the subject property due to occupation of the same. Said interest, if any, is subject to and inferior to CSB’s Mortgage. 18. Upon information and belief, the Defendant, Cheyenne L. Carter, owned this property with Defendant, Austin Carter, and is now deceased; that no probate has been filed on her estate in a court of competent jurisdiction on her estate. That the unknown heirs, executors, administrators, devisees, trustees and assigns, if any, of Cheyenne L. Carter may be claiming an interest in and to all or some of the Real Property Collateral. Said interest, if any, is subsequent, junior, and inferior to CSB’s interest. 19. That this is an action in which service by publication is proper and authorized as to the unknown heirs of Cheyenne L. Carter. 20. That the interests of all Defendants are subject and inferior to CSB’s Mortgage; and all persons, firms and organizations, having claims against said property hold same subject and inferior to CSB’s Mortgage. WHEREFORE, premises considered, CSB prays that judgment be entered in its favor and against the above-captioned Defendants, establishing CSB as the owner and holder of CSB’s Mortgage and any amendments thereto; that each of the above-captioned Defendants be required to set up his, her or its interest in and to the Real Property Collateral; that the same be foreclosed as aforesaid; and that CSB have all other proper relief granted in its favor including, but not limited to, a judgment for attorney fees and Court costs. Count III – Personal Property Collateral and Replevin That for Count III herein, CSB alleges and adopts all statements made in Counts I and II, in addition, alleges and states: 21. As part and parcel of the transaction relating to the Promissory Note No. 30268 described in Count I above and for purposes of securing all sums due and owing under said Promissory Note No. 30268, Carter, for good and valuable consideration, executed and delivered to CSB its Security Agreement granting unto CSB good and valid first, prior, and superior security interests and liens in and to the following described personal property: 2007 Freightliner Tractor Trailer Semi Vin: 1FUJA6CK77W2719 (hereinafter referred to as “Personal Property Collateral”) including but not limited to the items described on the Security Agreement. A copy of said Security Agreement is attached hereto as Exhibit “C”. 22. Said security interests, which were in favor of CSB, have been properly perfected with the appropriate governmental offices in the State of Oklahoma. 23. As a result of the execution and delivery of the Security Agreement attached as Exhibit “C” and the perfection of said security, CSB has a special ownership or interest in the Personal Property Collateral. 24. Said security interests constitute valid first, prior, and superior liens in favor of CSB in and to all of the Personal Property Collateral described above. 25. Said Security Agreement is now in default as a result of the failure of Carter to comply with the terms and provisions of said Security Agreement as well as the documents evidencing the indebtedness that said Security Agreement secures. 26. CSB has reason to believe that the actual value of the Personal Property Collateral is estimated to be $15,000.00. 27. The Personal Property Collateral described above has not been taken in execution or any order or judgment against CSB, or for the payment of any tax, fine, or amercement assessed against CSB, or by virtue of any order of delivery issued under Title 12 of the Oklahoma Statutes, or any other mesne or final process issued against CSB. 28. CSB has reason to believe that Carter may be in actual and/or constructive possession of the Personal Property Collateral described above. Said possession is subject, junior, and inferior to the rights of CSB. Although CSB has demanded possession of said Personal Property Collateral, Carter has failed, refused, and neglected to deliver or relinquish possession of the Personal Property Collateral to CSB. Carter is therefore wrongfully detaining said Personal Property Collateral. 29. CSB has reason to believe that Carter may attempt to conceal, damage, or destroy the Personal Property Collateral or a part thereof or to remove the Personal Property Collateral from the state or county in which it is now located. Any such action will result in irreparable harm to CSB. CSB is without remedy at law to prevent such harm or injury. 30. CSB therefore requests that this Court issue an Order of Delivery for the recovery of the above-described Personal Property Collateral. CSB further requests that the Clerk of this Court issue a Notice to be served upon Carter, which notice shall notify Carter that: A. An Order of Delivery of the Personal Property Collateral has been sought; B. Carter has a right to object by written response filed with the Court Clerk and delivered or mailed to CSB’s attorney within five (5) days after service upon him; and C. That an Order of Delivery shall be issued by the Court Clerk in the event no written response is filed within said five (5) day period. WHEREFORE, premises considered, CSB prays that: A. The Clerk of this Court issue the above-described notice to Carter, and further that the notice inform Carter that, pursuant to OKLA. STAT. ANN. tit. 12, § 1571.1, any person who willfully or knowingly damages property in which there exists a valid right to the issuance of an Order of Delivery or on which such Order of Delivery has been sought under the provisions of said statute, as amended, or who conceals it, with the intent to interfere with the enforcement of the Order, or who removes it from the jurisdiction of this Court with the intention of defeating the enforcement of an Order of Delivery, or who willfully refuses to disclose its location to an officer charged with executing an Order for its delivery, or who, when in possession of such property, willfully interferes with the officer in charge with executing such writ, shall be guilty of a misdemeanor and, in addition to such criminal penalties as are provided by law, shall be liable to CSB for double the amount of the damage done to the property, together with a reasonable attorney’s fee to be fixed by the Court; and B. That the Court issue a Temporary Restraining Order pursuant to OKLA. STAT. ANN. tit. 12, § 1571(C) ordering Carter not to conceal, damage, or destroy any of the Personal Property Collateral or any part thereof and to not remove said Personal Property Collateral or any part thereof from the state or county in which it is now located, pending a hearing on CSB’s request for a hearing, if any, on CSB’s request for an Order of Delivery; and C. That this Court, after hearing, if requested, and instanter and without notice, if no written objections are filed, issue an Order of Delivery for the immediate recovery of the Personal Property Collateral; and D. That the Court render judgment in favor of CSB and against the Defendants for the possession of all of the Personal Property Collateral; and E. That the Court determine that CSB has a valid, first, paramount, and superior security interest covering all of the Personal Property Collateral and that said security interest of CSB in said Personal Property Collateral be foreclosed against the Defendants; and F. That this Court grant unto CSB such other and further relief as this Court may deem just and equitable. Respectfully submitted, [signature] Dustin E. Conner, OBA #30530 GUNGOLL, JACKSON, BOX & DEVOLL, P.C. Post Office Box 1549 323 West Broadway Enid, Oklahoma 73702-1549 (580) 234-0436 - telephone (580) 233-1284 – facsimile [email protected] Attorneys for Plaintiff STATE OF OKLAHOMA ) COUNTY OF MAJOR ) ss: Lisa K. Fuzzell of lawful age, after first being duly sworn upon her oath, deposes and states as follows: That she is Senior Vice President and Chief Operating Officer of Cleo State Bank, a state chartered banking institution; that she is duly authorized to make this verification as agent for the Plaintiff and as an officer of Cleo State Bank; that she has read the above and foregoing Petition, and any exhibits attached thereto, and understands the contents thereof; and that the matters and facts set forth above are within her personal knowledge and are true and correct to the best of her information, knowledge and belief. Further states that all exhibits attached thereto are true and correct copies of the same documents held by Plaintiff. Cleo State Bank, a state chartered banking institution ("Plaintiff") By: Lisa K. Fuzzell, Senior Vice President/COO SUBSCRIBED AND SWORN to before me this 8th day of April, 2026. SIERRA K COE Notary Public, State of Oklahoma Commission # 25007953 My Commission Expires 07-07-2028 Notary Public My Commission Expires: 7-7-29 Notary Commission No.: 25007953 DCN: 0A7296DB2D6012DB176676E29F14A41F PROMISSORY NOTE—General DEBTOR'S NAME(S) AND ADDRESS AUSTIN CARTER 315 N CENTRAL Carmen, OK 73726 LENDER'S NAME AND ADDRESS Cleo State Bank 401 West Main Street Carmen, OK 73726 NOTE NUMBER 30268 MATURITY DATE 11/18/2028 PRINCIPAL AMOUNT $46,648.20 CUSTOMER NUMBER LOAN OFFICER PF [ ] ACTUAL/360 [ ] 30/360 [ ] ACTUAL/365 FIXED INTEREST RATE PER ANNUM [ ] VARIABLE RATE INDEX PRESENT INDEX RATE _____ % VARIABLE RATE INDEX MARGIN OVER/UNDER INDEX _____ % MAXIMUM PER ANNUM INTEREST RATE CHANGE _____ % INITIAL PER ANNUM RATE _____ % NEW LOAN [ ] RENEWAL OF LOAN NUMBERS 30236 & 30207 FULLY ADVANCED MULTIPLE ADVANCES REVOLVING CREDIT PURPOSE OF LOAN Commercial; Refinance Vehicle COLLATERAL DESCRIPTION 2007 FREIGHTLINER TRACTOR TRAILER SEMI VIN Number: 1FUJA6CK77W2719 New Real Estate Property Carmen, OK 73726 PAYMENT TERMS This loan is due on demand or in absence of demand, payable as described below. <table> <tr> <th>NUMBER OF PAYMENTS</th> <th>AMOUNT OF PAYMENTS</th> <th>DATE OF PAYMENTS</th> </tr> <tr> <td>109</td> <td>$527.43</td> <td>bi-weekly beginning 09/14/2024.</td> </tr> <tr> <td>1</td> <td>$526.68</td> <td>will be due at maturity 11/18/2028.</td> </tr> </table> PROMISE TO PAY. For value received, the undersigned Debtor, whether one or more, and jointly and severally if more than one, agrees to the terms of this Note and promises to pay to the order of the Lender named above at its place of business as indicated in this Note or such other place as may be designated in writing by Lender, the Principal Amount of this Note and any accrued and unpaid Finance Charges, together with interest on the unpaid Principal Amount until Maturity at the per annum interest rate(s) stated above and according to the payment terms stated above. Depending on the box checked above, Interest on this Note is calculated either on the assumption that every year has 365 days and every month has 30 days (30/360) or on the actual number of days elapsed on a basis of a 360 day year (Actual/360) or a 365 day year (Actual/365). For purposes of computing interest and determining the date principal and interest payments are received, all payments will be deemed made only when received in collected funds. Payments are applied first to accrued and unpaid interest and other charges, and then to payment of the unpaid principal balance. In this Note, "Debtor" includes any party liable under this Note, including endorsers, co-makers, guarantors and otherwise, and "Lender" includes all subsequent holders. VARIABLE RATE. If this is a Variable Rate transaction as indicated above, the interest rate shall vary from time to time with changes (whether increases or decreases) in the Index Rate shown above. The Interest rate on this Note will be the Index Rate plus a Margin, if any, as indicated above. Each change will become effective as indicated below. If the Index Rate is Lender's base or prime rate, it is determined by Lender in its sole discretion, primarily on a basis of its cost of funds, is not necessarily the lowest rate Lender is charging its customers, and is not necessarily a published rate. [ ] Each change will become effective on the same date the Index Rate changes. [ ] Effective date of rate change: _____________ and on the same day _____________ thereafter. LATE PAYMENTS. When permitted by law, any principal and/or interest amount not paid within ___ calendar days after the due date will be assessed 5% of the unpaid payment amount or $25.00, whichever is greater. After the maturity date, Lender may at its sole discretion accrue Interest on the unpaid balance ___ at the same interest rate and method effective before maturity ___ at a rate equal to ________________________. ("Default Rate"). In no event shall the interest rate and related charges either before or after maturity be greater than permitted by law. ALL PARTIES PRINCIPALS. All Debtors shall each be regarded as a principal and each Debtor agrees that any party to this Note, with Lender's approval and without notice to any other party, may from time to time renew this Note or consent to one or more extensions or deferrals of the Maturity Date for any term(s) or to any other modification(s) and all Debtors shall be liable in same manner as on the original note. ADVANCES AND PAYMENTS. If the Fully Advanced box is checked, then the Debtor acknowledges that the entire Principal Amount has been advanced to the Debtor or for Debtor's account or benefit. For Multiple Advances or Revolving Credit, unless otherwise agreed in writing, Lender has not made a commitment to make any advances and has sole discretion to make, or not make, each advance under this Note. If the Multiple Advances box is checked, then the Debtor understands that the Lender will disburse the proceeds of this Note in increments, up to the Principal Amount, but that even if the Debtor prepays, the Debtor has no right to reborrow any amounts disbursed. The balance that the Debtor owes under this Note is the aggregate of all such disbursements, less any payments of principal made on this Note. Interest will accrue only on the actual amount of principal disbursed and outstanding from time to time. If the Revolving Credit box is checked, then the Debtor understands that the Lender will disburse the proceeds of this Note in increments up to the Principal Amount and that the remaining terms of this paragraph shall apply to this Note. The balance that the Debtor owes under this Note is the aggregate of all such disbursements, less any payments of principal made on this Note. The Debtor understands that the maximum amount of all such advances outstanding at any one time cannot exceed the Principal Amount, but that the Debtor may repay and reborrow up to the Principal Amount during the term of this Note. If the aggregate outstanding amount advanced under this Note ever exceeds the Principal Amount, then the Debtor will repay the excess upon demand, plus interest on the excess. There may be times when no principal is outstanding on this Note, but this Note and any collateral securing this Note remain valid and effective as to future advances under this Note. Any loans or advances the Lender makes to the Debtor or for the Debtor's account or benefit are presumed to be made under the terms of this Note. The Lender may make advances under this Note at the oral or written request of any person designated or authorized by the Debtor until the Debtor revokes such designation or authorization in writing received by the Lender, provided that the Lender has the right, but is not obligated, to require written authorization from the Debtor prior to honoring any oral request. Interest will accrue only on the actual amount of principal disbursed and outstanding from time to time. PREPAYMENT. Debtor shall have the right to prepay all or any part of the principal due under this Note at any time subject to the following conditions: (a) all interest must be paid through the date of any prepayment, (b) if this Note provides for monthly or other periodic payments, there will be no changes in the due dates or amounts following any partial prepayments unless Lender agrees to such changes in writing; and (c) upon prepayment, in whole or in part, Lender may charge and Debtor agrees to pay a fee or premium calculated as follows (this fee/ premium provision will not apply if prohibited by applicable law): COLLATERAL. This Note and all other obligations of Debtor to Lender, including renewals and extensions, are secured by all collateral securing this Note and by all other security interests and mortgages previously or later granted to Lender and by all money, deposits and other property owned by any Debtor and in Lender's possession or control. LENDER'S SIGNATURE(S) [Signature] By: ____________________________ Pat Fuzzell, Assistant Vice President By: ____________________________ [Lender signatures optional] DEBTOR(S) SIGNATURE(S) AUSTIN CARTER DEBTOR EXPRESSLY AGREES ACCELERATION. At option of Lender, the unpaid balance of this Note and all other obligations of Debtor to Lender, whether direct or indirect, absolute or contingent, now existing or later arising, shall become immediately due and payable without notice or demand, upon or after the occurrence or existence of any of the following events or conditions: (a) any payment required by this Note or by any other note or obligation of Debtor to Lender or to others is not made when due, or any event or condition occurs or exists which results in acceleration of the maturity of any Debtor's obligation to Lender or to others under any promissory note, agreement or undertaking; (b) Debtor defaults in performing any covenant, obligation, warranty or provision contained in any loan agreement or in any instrument or document securing or relating to this Note or any other note or obligation of Debtor to Lender or to others; (c) any warranty, representation, financial information or statement made or furnished to Lender by or on behalf of Debtor proves to have been false in any material respect when made or furnished; (d) any levy, seizure, garnishment or attachment is made against any assets of any Debtor; (e) Lender determines, at any time and for any sole discretion, that a failure of payment of this Note is impaired; (f) whenever, in Lender's sole judgment, the collateral for the debt evidenced by this Note becomes unsatisfactory or insufficient either in character or value and, upon request, Debtor fails to provide additional collateral as required by Lender; (g) all or any part of the collateral for the debt evidenced by this Note is lost, stolen, substantially damaged or destroyed; (h) any Debtor dies or becomes incompetent, insolvent, dissolves, changes ownership or senior management, or terminates their existence; or (i) a receiver is appointed over all or part of any Debtor's property, or any Debtor files an application for the benefit of creditors, files for relief under any bankruptcy or insolvency laws, or becomes subject to an involuntary proceeding under such laws. Upon the occurrence of any event described above, Lender may, at its option and with or without accelerating the Note, increase the Interest Rate on this Note to the Default Rate provided herein. ADDITIONAL PROVISIONS RIGHT OF OFFSET. Except as otherwise restricted by law, any indebtedness due from Lender to Debtor, including, without limitation, any deposits or credit balances due from Lender, is pledged to secure payment of this Note and any other obligation to Lender of Debtor, and may at any time while the whole or any part of such obligation(s) remain(s) unpaid, either before or after maturity of this Note, be set off, appropriated, held or applied toward the payment of this Note or any other obligation to Lender by any Debtor. ADDITIONAL PROVISIONS. (1) Debtor agrees, if requested, to furnish to Lender copies of income tax returns as well as balance sheets and income statements for each fiscal year following Date of Note and at more frequent intervals as Lender may require. (2) No waiver by Lender of any payment or other right under this Note or any related agreement or documentation will operate as a waiver of any other payment or right. All Debtors waive presentment, notice of acceleration, notice of default, protest and consent to substitutions, releases and failure to perfect as to collateral and to additions or releases of any Debtor. (3) This Note and the obligations evidenced by it are to be construed and governed by the laws of the state indicated in Lender's address shown in this Note. (4) All Debtors agree to pay costs of collection, including, as allowed by law, an attorney's fee equal to a minimum of 15% of all sums due upon default or such other maximum fee as allowed by law. (5) All parties signing below acknowledge receiving a completed copy of this Note and related documents, which contain the complete and entire agreement between Lender and any party liable for payment under this Note. No variation, condition, modification, change or amendment to this Note or related documents shall be binding unless in writing and signed by all parties. No legal relationship is created by the execution of this Note and related documents except that of debtor and creditor or as stated in writing. SUPPLEMENTAL TERM OF PROVISIONS DCN: B76CE9B76B7F38EB5320D8917200A1DA REAL ESTATE MORTGAGE WITH POWER OF SALE KNOW ALL PERSONS BY THESE PRESENTS that: AUSTIN CARTER (called “Mortgagor,” whether one or more) mortgages to: Cleo State Bank (called “Mortgagee,” whether one or more and which term shall be construed to include Mortgagee's successors and assigns) the following described real estate and premises located in Alfalfa County, Oklahoma: Lots Eighteen (18), Nineteen (19), Twenty (20), Twenty-one (21), Block Thirty-one (31), In the original Town of Carmen, Alfalfa County, Oklahoma. with all the buildings and other improvements located or constructed on the real estate, all fixtures, personal property used on or in, and appurtenances to the real estate, and Mortgagor assigns and pledges all rents, issues, profits and income derived from the above real estate (collectively referred to as the "Mortgaged Property"). This Mortgage and assignment of rents, issues, profits and income derived from the Mortgaged Property creates a security interest in the Mortgaged Property and like kind future property from the time the Mortgage and assignment is granted even though enforcement of the assignment of rents, issues, profits and income may be delayed until default. Mortgagor warrants the title to the Mortgaged Property. This Mortgage is given to secure the payment and performance of all of the following (collectively, the “Debt”): (a) The indebtedness evidenced by the following described promissory Note(s) (the “Note,” whether one or more) and any modifications, renewals or substitutions of the Note(s): For AUSTIN CARTER in consideration of the principal sum of Eleven Thousand Eight Hundred Forty Five and 09/100 dollars ($11,845.09) to be paid as follows: In 24 Periodic payments of $548.25 beginning on August 04, 2024 with a final payment due at maturity on June 25, 2026. (b) All sums advanced or paid by Mortgagee on account of the failure of the Mortgagor to comply with the terms or covenants of this Mortgage or other documents signed by the Mortgagor; (c) All future loans and advances and all future renewals of loans which Mortgagee may make to Mortgagor or to the Debtor identified in the Note, if different from Mortgagor (the “Debtor”); and all other debts, obligations and liabilities of every kind and character of Mortgagor or Debtor now existing, whether or not explicitly referred to, or arising in the future in favor of Mortgagee, whether direct or indirect, absolute or contingent, or originally payable to Mortgagee or any other person; and any renewals or extensions; provided, however, if the Mortgaged Property includes Mortgagor’s principal dwelling or is otherwise a 1 to 4 family dwelling, the Mortgaged Property will not secure any future loan, advance, debt, obligation or liability taken or incurred principally for a personal, family or household purpose unless all required disclosures, notices and rights of rescission are provided in accordance with federal law Mortgagor further agrees (a) to pay and discharge all taxes and assessments on the Mortgaged Property before they become delinquent; (b) to keep all the Mortgaged Property and improvements insured for their full insurable value on a replacement basis, unless Mortgagee requires or approves in writing a different coverage amount or basis and under policies which are acceptable to, and for the benefit of, the Mortgagee; (c) to cure all title defects or clouds on or claims against Mortgagor’s title which may arise or be discovered; (d) to keep all the Mortgaged Property in good condition and repair, and to repair or replace any damaged or destroyed Mortgaged Property; and (e) to discharge any levies, liens, attachments, or other claims which may be asserted against the Mortgaged Property. Mortgagor also agrees with respect to the Mortgaged Property to comply with all environmental laws and regulations now in force or later promulgated and to disclose to Mortgagee at all times information regarding the environmental status of the Mortgaged Property. Mortgagor grants Mortgagee the right to acquire additional environmental information regarding the Mortgaged Property. Mortgagor also grants Mortgagee or its agents a license to enter onto the Mortgaged Property and inspect it for any reason and further agrees to indemnify Mortgagee for any liability associated with the Mortgaged Property. The discovery of undisclosed environmental hazards on the Mortgaged Property may at option of Mortgagee be considered an Event of Default under this Mortgage. In the Event of the failure of the Mortgagor to fulfill the agreements of this paragraph, the Mortgagee may purchase insurance or pay taxes, assessments or other liens and appropriate sums to protect the Mortgaged Property, and shall have a lien secured by this Mortgage and assignment for the amount of those sums with interest on those amounts at the maximum rate of interest on any part of the Debt secured by this Mortgage and assignment. If the Mortgaged Property is Mortgagor's homestead and one of the Mortgagors is the spouse of another Mortgagor or the Borrower identified in the Note but is not obligated under the Note, and is only signing this Mortgage to satisfy the requirements of Title 16 Okla. Stat. § 4 (which requires a spouse to sign a mortgage on homestead property), then such Mortgagor is not obligated under the provisions of the immediately preceding paragraph and is only signing this Mortgage to convey his or her interest in the Mortgaged Property. If Mortgagee is required to give Mortgagor notice, notice mailed or delivered at least 5 days before action is taken will be considered reasonable. Mortgagor confers on Mortgagee or its attorney or agent the power to sell the Mortgaged Property and the interests of all persons in it in the manner provided in the Oklahoma Power of Sale Mortgage Foreclosure Act (Title 46 Okla. Stat.§ 40 et seq). On the occurrence of an Event of Default (as described in this Mortgage), Mortgagee may, at its option, accelerate payment of the Debt so that all the Debt shall be immediately due and payable and may either exercise the Power of Sale or foreclose this Mortgage in a judicial foreclosure. The following are considered "Events of Default": (a) any default in payment of the Debt or performance under the Note; (b) Mortgagor fails to perform any covenant or agreement contained in this Mortgage or in any other indebtedness, obligation or agreement of the Mortgagor to Mortgagee or to another; (c) Mortgagor sells, conveys, transfers, hypothecates, or in any other manner ceases to be the owner or in possession of all or any portion of or interest in the Mortgaged Property, except as agreed to by Mortgagee in writing or as permitted under applicable law; or (d) Mortgagee believes the prospect of payment under the Note is impaired or the Mortgaged Property is in jeopardy. Subject to the provisions of the Oklahoma Power of Sale Mortgage Foreclosure Act, Mortgagee may accelerate payment of the Debt for the reasons stated in this Mortgage without notice to, or demand on, Mortgagor. The Mortgagor irrevocably appoints the Mortgagee its lawful attorney in fact, with Power of Attorney in its name and stead to collect any income, rents, issues and profits arising from or accruing at any time that are due under each and all of the leases, contracts and agreements, written or verbal, now existing or existing in the future with reference to the Mortgaged Property, with the same rights and powers and subject to the same immunities, exoneration of liability and rights of recourse and indemnity as the Mortgagor would have. As often as any action may be taken to foreclose this Mortgage or to exercise rights under the Power of Sale Mortgage Foreclosure Act, the Mortgagor agrees to pay an attorney's fee to the Mortgagee equal to the greater of a sum of not less than 15% of the amount due or the incurred attorney's fee, in addition to other sums due, which shall be secured by this Mortgage. If there is a foreclosure of this Mortgage other than by Power of Sale, Mortgagor waives appraisement of the Mortgaged Property, unless Mortgagee seeks an appraisal. Appraisal shall be at the sole option of the Mortgagee, to be declared when the petition to foreclose is filed or when judgment is taken. Mortgagor understands and agrees that on Mortgagor's default, a court may grant specific performance of Mortgagor's agreements in this Mortgage, and Mortgagee will have the right to take possession of the Mortgaged Property by appointing a receiver in accordance with Title 12 Okla. Stat.§ 1551.2(c) which authorizes appointment when a condition of a mortgage has not been performed and the mortgage provides for appointment of a receiver. The court may also appoint a receiver upon other grounds as specified in Title 12 Okla. Stat.§ 1551. "A POWER OF SALE HAS BEEN GRANTED IN THIS MORTGAGE. A POWER OF SALE MAY ALLOW THE MORTGAGEE TO TAKE THE MORTGAGED PROPERTY AND SELL IT WITHOUT GOING TO COURT IN A FORECLOSURE ACTION UPON DEFAULT BY THE MORTGAGOR UNDER THIS MORTGAGE." MORTGAGOR SIGNATURES Signed and Delivered on this Date: 08/24/2024 AUSTIN CARTER STATE OF Oklahoma COUNTY OF Alfalfa The foregoing instrument was acknowledged before me on 6-14-2024 by AUSTIN CARTER My Commission Expires: 09-05-2027 OFFICIAL SEAL PATRICIA K. FUZSELL NOTARY PUBLIC OKLAHOMA WOODS COUNTY COMM. EXP. 09-05-2024 COMM. NO._D0014829 NOTARY PUBLIC SECURITY AGREEMENT DEBTOR AUSTIN CARTER 315 N CENTRAL Carmen, OK 73726 SECURED PARTY Cleo State Bank 401 West Main Street Carmen, OK 73726 1. GRANT OF SECURITY INTEREST. For value received, the undersigned (referred to as "Debtor" whether one or more) hereby assigns and grants to Secured Party named above a security interest in the Collateral described below to secure the payment of the "Indebtedness" (as defined below) and performance of all Debtor's obligations and agreements in this Agreement or other documents evidencing the Indebtedness. Any term used in the Uniform Commercial Code, as adopted and revised from time to time in the State of Oklahoma ("UCC"), and not defined in this Agreement shall have the meaning given to the term in the UCC. Debtor's location (if other than the address reflected above ) is in the state of Oklahoma. II. SECURED INDEBTEDNESS. [Check applicable boxes] The security interest granted under this Agreement secures the following "Indebtedness" which ☑ Debtor or ☐ as "Borrower" owes to Secured Party: ☐ Specific Debt. The following debt(s) of Borrower and all extensions, renewals, deferrals, modifications, and replacements: ☑ All Debts. All liabilities of Borrower to Secured Party of every kind or description, including: all promissory notes from Borrower to Secured Party; all future advances from Secured Party to Borrower; direct or indirect liabilities; liabilities due or to become due and whether absolute or contingent; liabilities now existing or hereafter arising and however evidenced; all extensions, renewals, deferrals, modifications and replacements of liabilities of Borrower to Secured Party for any term or terms; all interest and other finance charges due or to become due on the liabilities of Borrower to Secured Party; and "Indebtedness" also includes expenditures by Secured Party involving performance or enforcement of agreements, obligations, covenants and warranties in this Agreement or any other agreement between Borrower and Secured Party; and all costs, attorneys’ fees and other expenditures of Secured Party in collection and enforcement of any obligation or liability of Borrower to Secured Party and in the collection and enforcement, sale or other liquidation of any of the Collateral. III. DESCRIPTION OF COLLATERAL. The "Collateral" shall include: 2007 FREIGHTLINER TRACTOR TRAILER SEMI VIN Number: 1FUJA6CK77W2719 This term "Collateral" also includes to the extent not listed above as original collateral: (1) After-Acquired Property. After-acquired property; provided, however, the security interest will not attach to (a) consumer goods, other than an accession when given as additional security unless the Debtor acquires rights in them within 10 days after the Secured Party gives value; or (b) a commercial tort claim. (2) Proceeds. Proceeds, products, additions, substitutions and accretions of the Collateral. (3) Deposits. Unless prohibited by law, any property (excluding Individual Retirement Accounts and other qualified retirement accounts), tangible or intangible, in possession of Secured Party at any time during the term of this Agreement, or any indebtedness due from Secured Party to Debtor and any deposit or credit balances due from Secured Party to Debtor, and Secured Party may at any time while the whole or any part of the Indebtedness remains unpaid, whether before or after maturity thereof, be appropriated, held or applied toward payment of the Indebtedness or any obligation of Debtor to Secured Party. IV. GENERAL PROVISIONS. 1. WAIVERS. No act, delay or omission, including Secured Party's written express waiver of a remedy after any default under this Agreement, shall constitute a waiver of any of Secured Party's rights and remedies not expressly waived in writing under this Agreement or any other agreement between the parties. All of Secured Party's rights and remedies are cumulative and may be exercised singly or concurrently. The waiver or release of any one or more rights or remedies shall not be a waiver of a later or the exercise of any other rights or remedies upon any subsequent default. No waiver, change, modification or discharge of any of Secured Party's rights or remedies or Debtor's duties as specified or allowed by this Agreement will be effective unless in writing and signed by a duly authorized officer of Secured Party. Acceptance of any partial or late payment shall not constitute a waiver of any requirement of this Agreement or impose any additional notification duties upon Secured Party. Debtor and all other signers, including guarantors, waive presentment, notice of dishonor and protest, notice of default, notice of intention to accelerate and notice of acceleration and consent to any and all extensions of time for any term or terms regarding payment of partial payments, or renewals before or after maturity. Debtor and all other signers, including guarantors, further consent to substitution, impairment, release or nonperfection with regard to the Collateral, and the addition or release of or agreement not to sue any party or guarantor. 2. AGREEMENT BINDING ON ASSIGNS. This Agreement inures to the benefit of Secured Party's successors and assigns, and is binding upon Debtor's heirs, executors, administrators, representatives, successors and permitted assigns (and all persons who become bound as a debtor to this Security Agreement), but no person taking from or representing Debtor has any right to advances under any instrument or document secured by this Agreement. 3. CHANGES IN TERMS. Secured Party reserves the right to change any of the terms of this Agreement in accordance with applicable law and the provisions of this Agreement. 4. TERM OF AGREEMENT. This Agreement, and the security interest created by this Agreement, will remain in force until all of the Indebtedness is paid in full, unless the security interest created by this Agreement is earlier released by Secured Party in writing. 5. RIGHTS OF SECURED PARTY ASSIGNABLE. Secured Party, at any time and at its option, may pledge, transfer or assign its rights under this Agreement in whole or in part, and any transferee or assignee shall have all Secured Party’s rights or the parts of them so pledged, transferred or assigned. Debtor’s rights under this Agreement or in the Collateral may not be assigned without Secured Party’s prior written consent. 6. JOINT AND SEVERAL RESPONSIBILITY OF DEBTOR AND SURETIES. The responsibilities of Debtor and any co-debtor, guarantor, surety or accommodation party under this Agreement and all the references to Debtor in this Agreement shall be deemed to refer to each such person, including any person who pledges Collateral as if it were pledged or otherwise made subject to any promissory note, guaranty or other instrument secured by this Agreement. 7. SEPARABILITY OF PROVISIONS. If any provision of this Agreement shall be found to be invalid or unenforceable, such invalidity or unenforceability shall not affect any other provision of this Agreement, and this Agreement shall be construed and enforced in accordance with the laws of the State of Oklahoma, except to the extent that the UCC provides for application of the law where the Debtor or the collateral is located (if other than Oklahoma) as the case may be. 8. GOVERNING LAW. This Agreement shall be construed and enforced in accordance with the laws of the State of Oklahoma, except to the extent that the UCC provides for application of the law where the Debtor or the collateral is located (if other than Oklahoma) as the case may be. 9. ENTIRE AGREEMENT. This Agreement, together with any mortgage of real estate which may be Collateral, constitutes the entire agreement between the parties with respect to the subjects addressed herein. This Agreement may be amended or modified only by a writing signed by Secured Party specifying that it is a modification, amendment or addition to this Agreement. V. EVENTS OF DEFAULT. Debtor shall be in default under this Agreement upon the happening of any one or more of the following events or conditions, called “Events of Default” in this Agreement: 1. If any warranty, covenant, agreement, representation, financial information or statement made or furnished to Secured Party by Debtor, Borrower (if different from Debtor) any guarantor or surety, or otherwise to induce Secured Party to enter into this Agreement, or in conjunction with it, is violated or proves to have been false in any material respect when made or furnished. 2. If any payment required in this Agreement or under any other agreement or obligation of Borrower to Secured Party or to others is not made when due or in accordance with the terms of the applicable contract. 3. If Debtor defaults in the performance of any covenant, obligation, warranty, or provision contained in this Agreement or any other agreement, mortgage or obligation of Debtor to Secured Party or to others, including without limitation Debtor’s failure to insure the Collateral or unlawful use of the Collateral. 4. If any event or condition exists or occurs which results in acceleration of the maturity of any obligation of Borrower to Secured Party or to others under any note, mortgage, indorsement, agreement, or undertaking. 5. If anyone makes any levy against or seizes, garnishes or attaches any of the Collateral; if Debtor consensually encumbers any of the Collateral; or if Debtor sells, leases, or otherwise disposes of any of the Collateral without Secured Party’s prior written consent as required by this Agreement or any mortgage executed in connection with this Agreement. 6. If the Collateral is lost, stolen, substantially damaged or destroyed. 7. If, in Secured Party’s judgment, the Collateral becomes unsatisfactory or insufficient in character or value, and upon request Debtor fails to provide additional Collateral as required by Secured Party. 8. If at any time Secured Party, in its sole discretion, believes the prospect of payment or performance of any duty, covenant, warranty or obligation secured by this Agreement is impaired. 9. If Debtor, Borrower (if not the same) or any guarantor or surety dies, dissolves, terminates existence, or becomes insolvent; if a receiver is appointed over any part of Debtor's property or any part of the Collateral; if Debtor makes an assignment for the benefit of creditors; or if any proceeding is commenced under any bankruptcy or insolvency law by or against Debtor or any guarantor or surety for Debtor. 10. If the Collateral is removed from the location specified in this Agreement or in a separate notice to Secured Party without Secured Party's prior written consent, except for temporary periods in the normal and customary use of the Collateral. 11. Secured Party shall receive at any time following the Closing a filing office report indicating that Secured Party's security interest is not prior to all other security interests or other interests reflected in the report. VI. ADDITIONAL PROVISIONS. Debtor specifically agrees to the “Additional Provisions” herein. REPRESENTATIONS, WARRANTIES AND COVENANTS 1. FINANCIAL INFORMATION. All applications, balance sheets, earnings statements, and other financial information and representations which have been, or may later be, furnished to Secured Party to induce it to enter into or continue a financial transaction with Debtor fairly represent Debtor's financial condition as of the date and for the period shown in such documents. All information furnished to Secured Party at any time and in any form has, or shall be at the time furnished, true and accurate in all material respects and sufficiently complete to give Secured Party full knowledge of the subject matter. Debtor will provide to Secured Party annually, or more frequently if Secured Party so elects, such financial information about Debtor's affairs as Secured Party may reasonably request. Debtor's financial condition has not changed materially since the effective date of the last furnished financial information except as Debtor has reported to Secured Party in writing. 2. INFORMATION ON COLLATERAL. Debtor will furnish to Secured Party information adequate to identify all Collateral, in a form and at such times as Secured Party may request. Debtor also will deliver to Secured Party, upon request, true copies of purchase orders, shipping, delivery and warehouse receipts, and invoices evidencing and describing the Collateral, as well as true copies of all contracts to furnish goods or services to Debtor's customers. Debtor will execute such documents as Secured Party may require to evidence, perfect and record Secured Party's security interest granted by this Agreement and enable Secured Party to receive proceeds and distributions from or interest in the Collateral. 3. OWNERSHIP FREE OF ENCUMBRANCES. Except for the security interest granted by this Agreement or by a mortgage executed in connection with this Agreement, and except for any security interest previously disclosed in writing to Secured Party, Debtor now owns, or will use the proceeds of the advances secured by this Agreement to become the owner of the Collateral (or has rights in or the power to transfer the Collateral) free from any prior liens, security interests or encumbrances. Debtor warrants title to and will defend the Collateral against all claims and demands of persons claiming any interest in the Collateral adverse to Secured Party. Debtor will not permit any liens or security interests other than Secured Party's security interest to attach to any of the Collateral, and will not permit the Collateral to be levied upon, garnished or attached under any legal process, or permitted or taken to do anything that may impair the value of the Collateral or the security interest granted to Secured Party by Debtor. 4. FINANCING STATEMENTS. No Financing Statement or Lien Entry Form covering the Collateral is on file in any public office except in connection with this Agreement. Debtor authorizes Secured Party to file a financing statement covering the collateral. Debtor agrees to join with Secured Party in executing one or more Lien Entry Forms, Financing Statements, or Effective Financing Statements in form satisfactory to Secured Party and provides such other documents as may be required from time to time in order to evidence, perfect or continue perfection, or record the security interest granted in this Agreement. Debtor hereby authorizes and grants to Secured Party a power of attorney to execute such documents on Debtor's behalf. A carbon, photographic or other reproduction of this Agreement or of any Financing Statement is sufficient as a Financing Statement. 5. LOCATION OF COLLATERAL, RECORDS, INVENTORY AND EQUIPMENT. Debtor will give Secured Party written notice of each office or location at which the Collateral and Debtor's records pertaining to the Collateral are kept. Debtor shall not be required to give such notice if all Collateral and all of Debtor's records pertaining to the Collateral are and shall be kept at Debtor's address shown on the face of this Agreement, and if such address is Debtor's chief executive office. Debtor will notify Secured Party in writing of any proposed change in any of the offices or locations of the Collateral, prior to the proposed effective date of such change. Debtor will not remove or permit removal of any of the Collateral from the locations specified in this Agreement without Secured Party's prior written consent, except as otherwise provided in this Agreement, and such removal shall be considered an Event of Default under this Agreement. 6. SALE, LEASE OR DISPOSITION OF COLLATERAL PROHIBITED. Except for sales of inventory in the ordinary course of business, Debtor shall not sell, mortgage, transfer, exchange, lease, hypothecate, assign, license, grant any other security interest or otherwise dispose of all or any part of the Collateral or Debtor's rights in it without first obtaining Secured Party's written consent. Secured Party's consent may be conditioned upon any requirements (including, but not limited to, the application of proceeds to obligations secured by this Agreement) which Secured Party deems necessary for the protection of its security interest. Secured Party's consent will not be deemed to be effective unless and until such requirements and conditions have been fulfilled. Neither Debtor's grant of a security interest in the proceeds of the Collateral nor any requirement that Debtor furnish a Statement concerning farm products, if applicable, shall be construed to mean that Secured Party consents to sale or any other disposition of the Collateral. 7. MAINTENANCE AND INSPECTION. Debtor, at own expense, shall: (a) keep the Collateral in good condition and repair so that its value and operating efficiency shall be maintained and preserved; (b) not permit the Collateral to be misused, abused, wasted or allowed to deteriorate, except for the ordinary wear and tear of its intended primary use; (c) prudently protect the Collateral from the elements; and (d) use the Collateral lawfully and not permit its illegal use or its use in a manner not permitted or covered by the insurance on the Collateral required by this Agreement. Debtor shall comply promptly with all requirements of any governmental agency affecting the Collateral and, upon Secured Party's request, deliver to Secured Party evidence of such compliance. Debtor shall at all times keep accurate and complete books and records of transactions and information relating to the Collateral. Debtor grants to Secured Party the right and privilege of making such inspections of the Collateral and Debtor's books and records relating to it as Secured Party deems necessary, and auditing or causing an audit or verification of such books and records, at any time and from time to time, including conducting Debtor's customers, suppliers in connection with such audit or verification. Debtor agrees to assist Secured Party in facilitating such audits, verifications and inspections. 8. TAXES AND FEES. Debtor shall pay promptly any and all taxes, assessments and license fees with respect to the Collateral or use of the Collateral when the same shall become due. If the Collateral is on or affixed to realty owned by Debtor, Debtor shall make all such payments with respect to the realty when they are due. 9. AFFIXING TO REAL OR PERSONAL PROPERTY PROHIBITED. Unless Debtor has also granted Secured Party a first priority mortgage in the Collateral, Debtor shall not permit any of the Collateral which is personal property to become an accession or affixed to other personal property or become attached or affixed to real property without first obtaining Secured Party's written consent. Secured Party's consent may be conditioned upon any requirements (including, but not limited to, the subrogation of other interest owners in and to such other personal or real property to Secured Party's rights and interest in the Collateral) which Secured Party deems to be for the protection of its security interest. Secured Party's consent will not be deemed to be effective unless and until such requirements and conditions have been fulfilled. 10. INSURANCE ON THE COLLATERAL. While any of the Indebtedness remains outstanding and throughout the full term of this Agreement, Debtor shall maintain and pay for insurance on all Collateral, wherever located, including but not limited to storage facilities or in transit vehicles, including goods evidenced by documents. Such insurance shall be purchased through any person of Debtor's choice, with companies acceptable to Secured Party, against such casualties, hazards, public liabilities and other risks, and in such amounts as prudent and adequate to protect Secured Party or as Secured Party shall require. All insurance policies except for vendor's single interest insurance, or certified copies of such policies evidencing the insurance coverage shall be furnished to Secured Party within 10 days of the date of this Agreement. All policies of insurance shall provide for at least 10 days' prior written notice to Secured Party of cancellation. Secured Party may act as Debtor's attorney-in-fact, with power of attorney to procure insurance; make, adjust, and settle claims under or cancel such insurance; and endorse Debtor's name on any deed or checks drawn by insurers of the Collateral. Provided, however, Secured Party is under no obligation and has no duty to procure insurance, pay premiums, make, adjust or settle claims with respect to any insurance or to cancel any insurance required by this Agreement. Debtor assigns to Secured Party any returned or unearned premiums which may be due upon cancellation of any such policies for any reason whatsoever, and directs insurers to pay Secured Party any amounts so due. Any balance of insurance proceeds remaining after payment in full of all amounts secured by this Agreement shall be paid to Debtor. 11. EXPENDITURES BY SECURED PARTY. At its option, and after any written notice to Debtor required by law, Secured Party may, but is not obligated to, discharge taxes, liens, security interests or other encumbrances on the Collateral, or pay for: (a) the repair of any damage to the Collateral, (b) anything necessary to maintain and preserve the Collateral, and (c) insurance on the Collateral. Debtor shall be liable and agrees to reimburse Secured Party promptly for all such expenditures, and for all costs, attorney fees and other disbursements made by Secured Party in connection with this paragraph. In addition, Debtor shall be liable and agrees to reimburse Secured Party promptly for all costs, attorney fees and other disbursements made by Secured Party using funds provided by or provided for in this Agreement in enforcing or collecting any note, warranty, or liability of Debtor to Secured Party, or in realizing upon, enforcing or collecting any account, promissory note, chattel paper, instrument, document or other collateral of Debtor's in which Secured Party has a security interest. Until Debtor reimburses Secured Party for the amounts provided in this paragraph, such amounts shall be considered part of Debtor's liability to Secured Party which is secured by any security agreement executed by Debtor in Secured Party's favor, including this Agreement, unless such security would cause Secured Party to be in violation of a right of restriction or a restriction on security interests, in which case, to that extent, such amounts will not be secured. The amount of Debtor's liability under this paragraph shall be subject to accrual of interest at a rate not exceeding the annual percentage rate ("APR") or interest rate provided in the instrument secured by this Agreement. Any notice required in connection with this paragraph shall be sufficient if given at Debtor's address set forth in this Agreement by (a) mailing the notice at least 10 days before, or (b) delivering the notice at least 5 days before the commencement of the performance of the duties specified in the notice. 12. POSSESSION. Debtor shall keep possession of the Collateral, except where expressly otherwise provided in this Agreement or where Secured Party chooses to perfect its security interest by possession in addition to the filing of a financing statement. Where Collateral is in the possession of a third party, Debtor will join with Secured Party in notifying the third party of Secured Party's security interest and obtaining an acknowledgment from the third party that it is holding the Collateral for the benefit of Secured Party. 13. CONTROL. Debtor will cooperate with Secured Party in obtaining control with respect to Collateral consisting of: deposit accounts; investment property; letter-of-credit rights; electronic funds transfers; or certificates of deposit. 14. CHATTEL PAPER. If the Collateral includes chattel paper, Debtor will not create any chattel paper without placing a legend on the chattel paper acceptable to Secured Party indicating that Secured Party has a security interest in the chattel paper. 15. PURCHASE MONEY SECURITY INTEREST. To the extent Debtor uses the Indebtedness to purchase Collateral, Debtor's repayment of the Indebtedness shall apply on a "first-in-first-out" basis so that the portion of the Indebtedness used to purchase a particular item of Collateral shall be paid in the chronological order the Debtor purchased the Collateral. 16. DEBTOR'S NAME AND LOCATION. Debtor's exact legal name is as set forth herein. If Debtor is an individual, Debtor's principal residence is at Debtor's address as set forth herein. If Debtor is an entity other than an individual, Debtor's location (i.e., place of business, chief executive office or state of organization, as the case may be) is in the state reflected for Debtor's address as otherwise set forth herein. Until the Indebtedness is paid in full, Debtor agrees that it will not change its location (for example, its state of incorporation) or its legal name without providing Secured Party 30 days' prior written notice. 17. DEBTOR'S COOPERATION. In addition to Debtor's other obligations and agreements in this Agreement, and Secured Party's remedies, Debtor agrees and promises to do all acts which Secured Party deems reasonable or necessary to preserve or protect the Collateral, including, without limitation, the following: (a) FARM PRODUCTS. If the Collateral includes "farm products," Debtor agrees to execute and deliver to Secured Party an "Effective Financing Statement" containing all information required by law. Debtor also agrees to furnish to the Secured Party a list of the names and addresses of the buyers, commission merchants, and selling agents to or through whom Debtor may sell the farm products and agrees to keep such list current. Secured Party may inform persons on such list and others of Secured Party's security interest in the farm products. If any of the farm products are sold to or through any person or entity not on the list, Debtor may be subject to a fine unless Secured Party was notified in writing at least 7 days prior to such sale, or unless all sale proceeds are remitted to Secured Party within 10 days after such sale. Debtor agrees that before receiving an instrument in payment for farm products other than livestock, debtor shall execute a certificate containing, in addition to all information required by law, the name of Secured Party and a statement that Secured Party holds a security interest in the farm products listed on the certificate. (b) LIVESTOCK. In addition to the provisions of this Agreement relating to farm products, if the Collateral includes livestock, to the extent Secured Party deems it necessary to preserve the Collateral, and upon Secured Party's demand, with an appropriate credit for its value, Debtor will make available to Secured Party all feed, both hay and grain, and all equipment owned by Debtor and used in the feeding and handling of the livestock. Debtor will cooperate with Secured Party and use Debtor’s best efforts to allow Secured Party use of all Debtor’s right, title and interest in or to all water privileges, all other equipment used in the feeding and handling of the livestock, and all contracts and leases covering lands for pasture and grazing. (c) CHATTEL PAPER, ACCOUNTS, INSTRUMENTS, DOCUMENTS, SECURITIES and NOTES. If the Collateral is or becomes evidenced by chattel paper, accounts, instruments, documents, shares of stock or other securities, promissory notes, trade acceptances, or other instruments in writing, or if Debtor receives stock rights, rights to subscribe, dividends of any kind or character (including liquidating dividends), new securities cash, interest, or any other property by reason of ownership of the Collateral, the Collateral shall include all such property and, unless Secured Party provides otherwise, Debtor immediately shall deliver and pledge the same to Secured Party, appropriately assigned or endorsed to Secured Party’s order. Secured Party will hold such proceeds and property in the same manner as the Collateral originally pledged under this Agreement. Secured Party, at its option, may permit such property to be received and retained by Debtor, but Secured Party may at any time terminate such permission. Debtor agrees to execute all necessary stock powers and other conveyances to pledge to Secured Party any property described in this paragraph. Debtor also agrees to execute and deliver such financing statements and other documents required by Secured Party to protect or perfect the assignment, pledge transfer and grant of the security interest granted in this Agreement. Regardless of the form of any assignment, endorsement or other conveyance executed by debtor, Debtor waives presentment, demand, notice of dishonor, protest and notice of protest, and all other notices with respect to such conveyances. If the Collateral includes accounts or other receivables and the right to payment is enhanced by a letter of credit, Debtor agrees to deliver the letter of credit immediately to Secured Party, and not to make demand under it or assign it by way of security or otherwise without Secured Party’s prior express consent in writing, which consent Secured Party is under no obligation to give. (d) CASH AND OTHER REMITTANCES. Upon demand of and as specified by Secured Party, in whole, Debtor receives any checks, trade acceptances, drafts, cash, or other remittances, in payment of accounts or other Collateral or as proceeds of inventory or other Collateral, Debtor shall apply the same directly on Debtor’s liability to Secured Party, or deposit the same in a special account hereinafter referred to as “Secured Party’s special account”, when Secured Party has the power of withdrawal. If Secured Party so requires, Debtor will promptly notify Secured Party of such applications or deposits, identifying in writing the source of same and the Collateral which has been converted into same. The funds in any such special account shall be held solely by Secured Party as security for all Debtor’s liabilities to Secured Party. Said proceeds shall be deposited in precisely the form received, except for Debtor’s endorsement where necessary to permit collection of items, which endorsement Debtor agrees to make, and which Secured Party is hereby granted a power of attorney to make on Debtor’s behalf if Debtor fails or refuses to make such endorsement. Pending such deposits, Debtor agrees that any such checks, drafts, cash or other remittances will not be commingled with any of Debtor’s funds or property, but will be held separate and apart and in trust for Secured Party until deposit of same is made in the special account. Secured Party will, at intervals to be determined by Secured Party, apply the whole or any part of any monies which are on deposit with Secured Party, whether owned by Debtor or any other party liable under this Agreement, against the principal or interest due on any loans made to Debtor by Secured Party, or against Debtor’s other liabilities to Secured Party secured by this Agreement, at Secured Party’s sole option, unless so applying those deposits would contravene any written agreement between Debtor and Secured Party or any government regulation. Any portion of such funds on deposit which Secured Party elects not to apply will be paid to Debtor by Secured Party. (e) PROCEEDS. Whenever the sale, exchange, or other disposition of inventory or other Collateral gives rise to an account, chattel paper, instrument, or general intangible for the payment of money (“proceeds” for purposes of this paragraph), Debtor, as required by Secured Party, shall notify Secured Party promptly of the disposition of said inventory or other Collateral and any resulting proceeds. With respect to all proceeds covered by this Agreement, Debtor represents that (i) no set-off or counterclaim exists or shall be permitted to exist (ii) no agreements have been or shall be made for any material modification, deduction or discount, and (iii) no partial payments have been or shall be made except as revealed to Secured Party by Debtor in writing. All proceeds where the right to payment has not yet been earned by performance shall be evidenced by a binding written contract between Debtor and third parties, and copies of such contracts shall be provided to Secured Party. Secured Party shall have the right to notify any account debtor or obligor of Debtor’s obligation to make payments directly to Secured Party and Secured Party may take control of all proceeds, which right Secured Party may exercise at any time. Until such time as Secured Party elects to exercise such right, Debtor is authorized as Secured Party’s agent to collect and enforce such proceeds. The costs of such collection and enforcement, including attorneys’ fees and other expenses, shall be borne by Debtor, whether incurred by Secured Party or Debtor. (f) FEDERAL ASSIGNMENT OF CLAIMS ACT. If the Collateral includes accounts or other receivables with a face value over $1,000, and which arise out of a contract with the United States of America or any of its departments, agencies, subdivisions or instrumentalities, Debtor shall notify Secured Party promptly in writing of that fact. Debtor shall execute any instruments and take any other action Secured Party requires or requests to perfect Secured Party’s security interest in such accounts under the provisions of the Federal Assignment of Claims Act. REMEDIES Upon the occurrence of an Event of Default, and at any later time, Secured Party may, except as otherwise provided by law, at its option and without notice or demand to Debtor, exercise any and all rights and remedies provided by the UCC, as well as all other rights and remedies Secured Party possesses, including but not limited to the right to: 1. Declare all liabilities secured by this Agreement immediately due and payable, and/or proceed to enforce payment and performance of all such liabilities, provided that upon any prepayment in full of the unpaid balance of such liabilities, Debtor shall be entitled to a rebate of any unearned portion of any finance or other charge in accordance with law. 2. Require Debtor to assemble the Collateral or evidence of the Collateral and make it available to Secured Party at a place Secured Party designates which is reasonably convenient to both parties. Debtor shall be responsible for any expenses and damages if Debtor wrongfully damages the Collateral or, if, after default and demand in accordance with law and this Agreement, Debtor wrongfully fails to make the Collateral available to Secured Party. All such expenses and damages are secured by Secured Party’s security interest in the Collateral granted by this Agreement. 3. Repossess the Collateral, and for this purpose Secured Party is granted authority to enter into and upon any premises on which any part of the Collateral may be situated and remove it. Debtor waives any claim in connection with or arising from an entry peaceably made in connection with a repossession. Debtor authorizes Secured Party or its independent contractors to take possession of and hold any property located in or temporarily attached to the Collateral. If Debtor has not reclaimed such property within 10 days after notice of its taking and location is sent to Debtor, such property may be sold and the proceeds applied to expenses and other amounts due from Debtor to Secured Party. Any balance of such proceeds remaining after payment in full of all amounts secured by this Agreement shall be paid to Debtor. 4. Possess all books and records evidencing or pertaining to the Collateral and any personal property in or associated with the Collateral, and for this purpose Secured Party is granted authority to enter into and upon any premises at which any part of such books and records may be situated and remove them. Any such property not necessary to enforcement of Secured Party’s rights shall be returned to Debtor on demand, or otherwise upon completion of use. 5. Transfer any of the Collateral or evidence of the Collateral into Secured Party’s own name or that of a nominee, and receive the proceeds and hold the same as security for Debtor’s liabilities to Secured Party or apply the proceeds on or against any such liability. Secured Party may notify account debtors and obligors to make payment directly to Secured Party, and may demand, collect, receipt for, settle, compromise, adjust, pay, foreclose, release or realize upon the Collateral, in Secured Party’s own name or in Debtor’s name, as Secured Party may determine. 6. Sell or otherwise dispose of the Collateral. Unless the Collateral in whole or part is perishable or threatens to decline speedily in value or is of a type customarily sold on a recognized market, Secured Party will give Debtor reasonable notice of the time and place of any public sale, or of the time after which any private sale or other disposition is to be made. Such notice shall be adequate if given at Debtor’s address set forth in this Agreement by mailing the notice at least 10 days before any sale or other disposition or action. Secured Party shall be entitled to, and Debtor shall be liable for, reimbursement of all reasonable costs and expenditures of realizing on the security interest, including without limitation court costs, fees for replevin bonds, storage, repossessors’ fees, repair and preparation costs, real estate taxes, selling costs and attorneys’ fees. All such costs are secured by the security interest in the Collateral granted by this Agreement, except as provided above under “Expenditures by Secured Party.” Additionally, if the Collateral includes real estate, and if the mortgage executed in connection with this agreement so provides, Secured Party may exercise its power to sell the Collateral and the interests of all persons in the manner provided in the Oklahoma Power of Sale Mortgage Foreclosure Act, 46 Okla. Stat. § 40 et seq. If there is a foreclosure other than by a Power of Sale, Debtor waives appraisement of the Collateral, unless Secured Party seeks an appraisal. Appraisal shall be at the Secured Party’s sole option, to be declared when the petition to foreclose is filed or when judgment is taken. Debtor waives any right it may have to require Secured Party to pursue any third person for any of the indebtedness. Secured Party may comply with any applicable state or federal law requirements in connection with a disposition of the Collateral and compliance will not be considered adversely to affect the commercial reasonableness of any sale of the Collateral. Secured Party has no obligation to clean-up or otherwise prepare the Collateral for sale. Secured Party may sell the Collateral without giving any warranties as to the Collateral and may specifically disclaim any warranty of title or the like. This procedure will not be considered adversely to affect the commercial reasonableness of any sale of the Collateral. If Secured Party sells any of the Collateral upon credit, Debtor will be credited only with payments actually made by the purchaser, received by Secured Party and applied to the indebtedness of the purchaser. In the event the purchaser fails to pay for the Collateral, Secured Party may resell the Collateral and Debtor shall be credited. 7. Secured Party shall not be liable for failing to collect any account, enforce any contract right, or any other act or omission on the part of Secured Party, its officers, agents or employees, except as the same constitutes bad faith or failure to act in a commercially reasonable manner. Secured Party shall have acted in a commercially reasonable manner if its action or inaction is consistent with general commercial usage of parties similarly situated in the area of Secured Party’s location, but this standard shall not constitute disapproval of any procedures which otherwise may be reasonable under the circumstances nor require Secured Party to take steps to preserve rights against prior parties in an instrument or chattel paper. DEBTOR SIGNATURES SECURED PARTY SIGNATURE Cleo State Bank Pat Fuzzell, Assistant Vice President