exv10w8



 



Exhibit 10.8


PREPARED BY:

Janet G. Mallow, Esq.



WHEN RECORDED RETURN TO:


Riggs, Abney, Neal, Turpen, Orbison & Lewis

Attention: Wendy Walls

502 West Sixth Street

Tulsa, OK 74119-1010


MORTGAGE, ASSIGNMENT OF LEASES AND RENTS,

SECURITY AGREEMENT AND FINANCING STATEMENT

[Oklahoma]



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.


     THIS MORTGAGE is made on October 1, 2003 from XETA TECHNOLOGIES, INC.,
f/k/a XETA Corporation, an Oklahoma corporation, whose address is 1814 W.
Tacoma, Broken Arrow, Oklahoma 74012 (the “Mortgagor”), and BANK OF OKLAHOMA,
N.A., whose address is P.O. Box 2300, Tulsa, Oklahoma 74192, and its successors
and assigns (the “Mortgagee”).


     1.     Specific
Definitions. In this Mortgage, the following terms shall have
the meanings given below:



		
	 	     1.1 “Borrower” means XETA TECHNOLOGIES, INC., an Oklahoma
corporation.




		
	 	     1.2 “Liabilities” means all obligations, indebtedness and
liabilities of the Borrower to any one or more of the Mortgagee, and any
of its subsidiaries, affiliates or successors, now existing or later
arising, including, without limitation, all loans, advances, interest,
costs, overdraft indebtedness, credit card indebtedness, lease
obligations, or obligations relating to any Rate Management Transaction,
all monetary obligations incurred or accrued during the pendency of any
bankruptcy, insolvency, receivership or other similar proceedings,
regardless of whether allowed or allowable in such proceeding, and all
renewals, extensions, modifications, consolidations or substitutions of
any of the foregoing, whether the Borrower may be liable jointly with
others or individually liable as a debtor, maker, co-maker, drawer,
endorser, guarantor, surety or otherwise, and whether voluntarily or
involuntarily incurred, due or not due, absolute or contingent, direct or
indirect, liquidated or unliquidated. The term “Liabilities” includes,
without limitation, the following:




		
	 	     (i) Separately and collectively, those certain Promissory
Notes, dated October 1, 2003 in the original principal amounts of
$7,500,000 (maturing September 30, 2004), and $3,374,734.33 and
$2,238,333.48 (both maturing



 






 







		
	 	September 30, 2006), each executed and delivered by the
Borrower to the Mortgagee;




		
	 	     (ii) The performance of all of the promises and agreements
contained in the Mortgage and all Related Documents.




		
	 	     1.3. “Premises” means and includes the following:




		
	 	     (i) The real property, and all the existing or subsequently
affixed or erected buildings, structures and improvements on it,
described as set forth on Exhibit “A” attached hereto and made a
part hereof for all purposes intended, commonly known as 1814 W.
Tacoma, Broken Arrow, OK;
	 
	 	     (ii) All easements, rights-of-way, licenses, privileges and
hereditaments appurtenant to or used in connection with the
Premises;
	 
	 	     (iii) All land lying in the bed of any road, street, alley or
the like, opened, proposed or vacated, public or private, or any
strip or gore, adjoining the Premises;
	 
	 	     (v) All mineral, coal, oil, gas and water rights, royalties,
water courses, ditch rights, water and water stock, timber and
timber rights, if any;
	 
	 	     (vi) All insurance, condemnation and other awards or payments,
including interest, made as a result of: (a) the exercise of the
right of eminent domain, (b) the alteration of the grade of any
street, (c) any loss of or damage to any building or other
improvement on the Premises, (d) any other injury to or decrease in
the value of the Premises, (e) any refund due on account of the
payment of real estate taxes, assessments or other charges levied
against or imposed upon the Premises and (f) the reasonable
attorneys’ and fees and court costs;
	 
	 	     (vii) All present and future (a) leases, subleases, licenses
and other agreements for the use and/or occupancy of the Premises,
oral or written, including, without limitation, all extensions,
renewals, replacements and holdovers (collectively, the “Leases”)
and (b) rents, revenues, income, issues, royalties, profits,
bonuses, accounts, cash, security deposits, advance rents and other
payments and/or benefits, of every kind or nature, derived from the
Leases and/or the Premises, including, without limitation, the
Mortgagor’s right to enforce the Leases and to receive and collect
all payments and proceeds under the Leases (collectively, the
“Rents”);
	 
	 	     (viii) All rights to make divisions of the real estate
comprising the Premises that are exempt from the platting
requirements of all applicable land division or platting acts, as
amended from time to time; and
	 
	 	     (ix) All licenses, contracts, permits and agreements required
or used in connection with the ownership, maintenance or operation
of the Premises.




		
	 	     1.4. “Rate Management Transaction” means any transaction, (including
an agreement with respect thereto) now existing or hereafter entered into
by the Borrower,



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	 	and the Mortgagee, or any of its subsidiaries or affiliates or their
successors, which is a rate swap, basis swap, forward rate transaction,
commodity swap, commodity option, equity or equity index swap, equity or
equity index option, bond option, interest rate option, foreign exchange
transaction, cap transaction, floor transaction, collar transaction,
forward transaction, currency swap transaction, cross-currency rate swap
transaction, currency option or any other similar transaction (including
any option with respect to any of these transactions) or any combination
thereof, whether linked to one or more interest rates, foreign
currencies, commodity prices, equity prices or other financial measures.




		
	 	     1.5. “Related Documents” means all loan agreements, credit
agreements, reimbursement agreements, security agreements, mortgages,
deeds of trust, pledge agreements, assignments, guaranties, or any other
instrument or document executed in connection with any of the
Liabilities.



     2.     Grant. To secure payment of the Liabilities, and for other good and
valuable consideration, Mortgagor hereby GRANTS, BARGAINS, SELLS, CONVEYS AND
MORTGAGES to the Mortgagee all of the Mortgagor’s right, title and interest,
now owned or hereafter acquired, in the “Premises”, and warrants title to the
same.


     3.     Secured
Indebtedness. The maximum principal sum secured by this
Mortgage shall not exceed two million two hundred thirty-eight thousand three
hundred thirty-three and 48/100 dollar ($2,238,333.48) at any one time
outstanding. This Mortgage shall not apply to any obligation or debt incurred
for personal, household or family purposes unless the note or guaranty
evidencing such personal, household or family debt expressly states that it is
secured by this Mortgage.


     4.     Covenants. The Mortgagor promises and agrees as follows:



		
	 	     4.1 Payment of Liabilities; Performance of Obligations. The
Mortgagor shall promptly pay when due, whether by acceleration or
otherwise, the Liabilities for which the Mortgagor is liable, and shall
promptly perform all obligations to which the Mortgagor has agreed under
the terms of this Mortgage and any of the other Related Documents.




		
	 	     4.2 Taxes and Liens. The Mortgagor shall pay, when due, before any
interest, collection fees or penalties shall accrue, all taxes,
assessments, fines, impositions, and other charges which may become a
lien prior to this Mortgage. Should the Mortgagor fail to make those
payments, the Mortgagee may at its option and at the expense of the
Mortgagor, pay the amounts due for the account of the Mortgagor. Upon the
request of the Mortgagee, the Mortgagor shall immediately furnish to the
Mortgagee all notices of amounts due and receipts evidencing payment. The
Mortgagor shall promptly notify’ the Mortgagee of any lien on all or any
part of the Premises and shall promptly discharge any unpermitted lien or
encumbrance.




		
	 	     4.3 Change in Taxes. In the event of the passage of any law or
regulation, state, federal or municipal, subsequent to the date of this
Mortgage, which changes or modifies the laws now in force governing the
taxation of mortgages or debts secured by mortgages, or the manner of
collecting those taxes, the Liabilities shall become due and payable
immediately at the option of the Mortgagee.



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	 	     4.4 Insurance. Until the Liabilities are fully paid, the Mortgagor
shall keep the Premises and the present and future buildings and other
improvements on the Premises constantly insured for the benefit of the
Mortgagee, at replacement cost for the full insurable value, without any
reduction based upon the Mortgagor’s acts, against fire and such other
hazards and risks customarily covered by the standard form of extended
coverage endorsement available in the state where the Premises is
located, including risks of vandalism and malicious mischief, and shall
further provide flood insurance (if the Premises are situated in an area
designated as a flood risk area by the Director of the Federal Emergency
Management Agency or as otherwise required by the Flood Disaster
Protection Act of 1973 and regulations issued under it), and such other
appropriate insurance as the Mortgagee may require from time to time. All
insurance policies and renewals must be acceptable to the Mortgagee, must
provide for payment to the Mortgagee in the event of loss, regardless of
any act or omission by the Mortgagor, must require thirty (30) days
notice to the Mortgagee in the event of nonrenewal or cancellation and
must be delivered to the Mortgagee within thirty (30) days prior to their
respective effective dates. Should the Mortgagor fail to insure or fail
to pay the premiums on any insurance or fail to deliver the policies or
certificates or renewals to the Mortgagee, then the Mortgagee, at its
option, may have the insurance written or renewed, and may pay the
premiums, for the account of the Mortgagor. In the event of loss or
damage, the proceeds of the insurance shall be paid to the Mortgagee
alone. No loss or damage shall itself reduce the Liabilities. The
Mortgagee is authorized to adjust and compromise a loss without the
consent of the Mortgagor, to collect, receive and receipt for any
proceeds in the name of the Mortgagee and the Mortgagor and to endorse
the Mortgagor’s name upon any check in payment of proceeds. The proceeds
shall be applied first toward reimbursement of all costs and expenses of
the Mortgagee in collecting the proceeds and then toward payment of the
Liabilities or any portion of it, whether or not then due or payable, or
the Mortgagee, at its option, may apply the proceeds, or any part of the
proceeds, to the repair or rebuilding of the Premises provided that the
Mortgagor (a) is not then or at any time during the course of restoration
of the Premises in default under this Mortgage and (b) has complied with
all requirements for application of the proceeds to restoration of the
Premises as the Mortgagee, in its sole discretion may establish. The
Mortgagor shall also provide and maintain comprehensive general liability
insurance in such coverage amounts as the Mortgagee may request, with the
Mortgagee being named as an additional insured on such policies. Evidence
of the renewal of such liability insurance shall be delivered to the
Mortgagee at the same time as evidence of the renewal of the property
insurance required above must be delivered to the Mortgagee. If the
Mortgagor fails to provide such liability insurance, and/or the renewals
thereof, or fails to pay the premiums on such liability insurance when
such premiums are due, then the Mortgagee may have such liability
insurance written or renewed, and may pay the premiums, for the account
of the Mortgagor.




		
	 	     4.6 Waste, Abandonment. The Mortgagor shall not abandon the
Premises, commit or permit waste on the Premises, or do any other act
causing the Premises to become less valuable. The Mortgagor will keep the
Premises in good order and repair and in compliance in all material
respects with any law, regulation, ordinance or contract affecting the
Premises and, from time to time, will make all needful and proper
replacements so that all fixtures, improvements and Equipment will at all
times be in good condition, fit and proper for their respective purposes.
Without limitation of the foregoing, nonpayment of the Charges shall
constitute waste. Should the Mortgagor fail to effect any necessary
repairs, the Mortgagee may, at its option and at the expense of



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	 	the Mortgagor, make the repairs for the account of the Mortgagor.
The Mortgagor shall use and maintain the Premises in conformance with all
applicable laws, ordinances and regulations. The Mortgagee or its
authorized agent shall have the right to enter upon and inspect the
Premises at all reasonable times. The Mortgagor unconditionally agrees to
pay timely all fees with respect to inspections of the Premises.




		
	 	     4.7 Alterations, Removal. No building, structure, improvement,
fixture, personal property or Equipment constituting any part of the
Premises shall be removed, demolished or substantially altered without
the prior written consent of the Mortgagee.




		
	 	     4.8 Payment of Other Obligations. The Mortgagor shall also pay all
other obligations which may become liens or charges against the Premises
for any present or future repairs or improvements made on the Premises,
or for any other goods, services, or utilities furnished to the Premises
and shall not permit any lien or charge of any kind securing the
repayment of borrowed funds (including the deferred purchase price for
any property) to accrue and remain outstanding against the Premises.



     5.     Assignment of Leases and Rents. As additional security for the
Liabilities, the Mortgagor assigns to the Mortgagee all the Leases and the
Rents of, from or in connection with the Premises and the buildings and
improvements thereon and such assignment is effective immediately upon the
execution of this Mortgage. This assignment includes an assignment of the
right, but not the obligation, to collect, receive, demand, sue for and recover
the Rents when due and payable. The Mortgagee shall not exercise any of its
rights and remedies under this section until the occurrence of any default
under the Liabilities. This assignment shall be operative during any
foreclosure or other proceeding taken to enforce this Mortgage and during any
redemption period. The Mortgagor will comply with all terms of all the Leases.
Upon request of the Mortgagee, the Mortgagor shall deliver to the Mortgagee
copies of all the Leases and similar agreements assigned to the Mortgagee
pursuant to this section, including all renewals and amendments thereof.


     6.     Assignment of Interest as Tenant or Purchaser. If the Mortgagor’s
interest in the Premises is that of a tenant or a purchaser, the Mortgagor also
assigns, mortgages and warrants to the Mortgagee, as additional security for
the Liabilities, all of the Mortgagor’s right, title and interest in and to any
Leases, land contracts or other agreements by which the Mortgagor is leasing or
purchasing all or any part of the Premises, including all modifications,
renewals and extensions, and all of the Mortgagor’s right, title and interest
in and to any purchase options contained in any such Leases or other
agreements. The Mortgagor agrees to pay each installment of rent, principal and
interest required to be paid by it under any such Lease, land contract or other
agreement when each installment becomes due and payable, whether by
acceleration or otherwise. The Mortgagor further agrees to pay and perform all
of its other obligations under any such Lease, land contract or other
agreement.


     If the Mortgagor defaults in the payment of any installment of rent,
principal or interest, or in the payment or performance of any other
obligation, under any such Lease, land contract or other agreement, the
Mortgagee shall have the right, but not the obligation, to pay the installment
or installments and to pay or perform the other obligations on behalf of and at
the expense of the Mortgagor. If the Mortgagee receives a written notice of the
Mortgagor’s default under any such Lease, land contract or other agreement, the
Mortgagee may rely on that notice as cause to take any action it deems
necessary or reasonable to cure the default, even if the Mortgagor questions or
denies the existence or nature of the default.


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     7.     Security Agreement. This Mortgage also constitutes a security agreement
within the meaning of the Uniform Commercial Code as in effect from time to
time in the state in which the Premises is located (the “UCC”) and the
Mortgagor grants to the Mortgagee a security interest in any Equipment or other
personal property included within the definition of the Premises, and all
proceeds, products and supporting obligations of any of the foregoing (the
“Collateral”). Accordingly, the Mortgagee shall have all of the rights and
remedies available to a secured party under the UCC. Upon the occurrence of any
default under this Mortgage, the Mortgagee shall have, in addition to the
remedies provided by this Mortgage, the right to use any method of disposition
of collateral authorized by the UCC with respect to any portion of the Premises
subject to the UCC. The Mortgagee shall have the right to require the Mortgagor
to assemble the Collateral and make it available to the Mortgagee at a place
designated by the Mortgagee which is reasonably convenient to both parties, the
right to take possession of the Collateral with or without demand and with or
without process of law, and the right to sell and dispose of the Collateral and
distribute the proceeds according to law. Should a default occur, the Mortgagor
will pay to the Mortgagee all costs reasonably incurred by the Mortgagee for
the purpose of enforcing its rights hereunder, to the extent not prohibited by
law, including, without limitation: costs of foreclosure; costs of obtaining
money damages; and a reasonable fee for the services of internal and outside
attorneys employed or engaged by the Mortgagee for any purpose related to this
security agreement, including, without limitation, consultation, drafting
documents, sending notices or instituting, prosecuting or defending litigation
or any proceeding. The Mortgagor agrees that upon default the Mortgagee may
dispose of any of the Collateral in its then present condition, that the
Mortgagee has no duty to repair or clean the Collateral prior to sale, and that
the disposal of the Collateral in its present condition or without repair or
clean-up shall not affect the commercial reasonableness of such sale or
disposition. The Mortgagee’s compliance with any applicable state or federal
law requirements in connection with the disposition of the Collateral will not
adversely affect the commercial reasonableness of any sale of the Collateral.
In connection with the right of the Mortgagee to take possession of the
Collateral, the Mortgagee may, without liability on the part of the Mortgagee,
take possession of any other items of property in or on the Collateral at the
time of taking possession and hold them for the Mortgagor. If there is any
statutory requirement for notice, that requirement shall be met if the
Mortgagee sends notice to the Mortgagor at least ten (10) days prior to the
date of the sale, disposition, or other event giving rise to the required
notice. Upon the request of the Mortgagee, the Mortgagor shall execute and file
such financing statements and shall take any other action requested by the
Mortgagee to perfect and continue as perfected the Mortgagee’s security
interests in the Equipment and other personal property included in the
definition of the Premises. The Mortgagor shall pay (and shall reimburse the
Mortgagee for) all costs, including attorneys’ fees and court costs, of the
preparation and filing of any financing statements and the taking of any such
other actions. A carbon, photographic or other reproduction of this Mortgage is
sufficient as, and can be filed as, a financing statement. The Mortgagee is
irrevocably appointed the Mortgagor’s attorney-in-fact to execute any financing
statement on the Mortgagor’s behalf covering the Equipment and other personal
property, tangible or intangible, that is included within the definition of
Premises. Additionally, if permitted by applicable law, the Mortgagor
authorizes the Mortgagee to file one or more financing statements related to
the security interests created by this Mortgage and further authorizes the
Mortgagee, instead of the Mortgagor, to sign such financing statements. The
Mortgagor shall execute and deliver, or cause to be executed and delivered,
such other documents as the Mortgagee may from time to time request to perfect
or to further evidence the security interest created in the Collateral by this
Mortgage. The Mortgagor further represents and warrants to the Mortgagee that
(a) its principal residence or chief executive office is at the address shown
above and (b) the Mortgagor’s name as it appears in this Mortgage is identical
to the name of the Mortgagor appearing in the Mortgagor’s organizational
documents, as amended, including trust


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documents. The Mortgagor will not, without the Mortgagee’s prior written
consent, change (a) the Mortgagor’s name, (b) the Mortgagor’s business
organization, (c) the jurisdiction under which the Mortgagor’s business
organization is formed or organized, or (d) the address of the Mortgagor’s
chief executive office or principal residence or of any additional places of
the Mortgagor’s business.


     8.     Fixture
Financing Statement. A part of the Premises constitutes goods
which are or are to become fixtures related to the Premises, and it is intended
that, as to those goods, this Mortgage shall be effective as a financing
statement filed as a fixture filing from the date of its filing for record in
the real estate records of the county in which the Premises is situated.
Information concerning the security interest created by this instrument may be
obtained from Mortgagee, as secured party, at the address of Mortgagee stated
above. The mailing address of Mortgagor, as debtor, is as stated above.


     9.     Reimbursement of Advances. If the Mortgagor fails to perform any of its
obligations under this Mortgage, or if any action or proceeding is commenced
which materially affects the Mortgagee’s interest in the Premises (including
but not limited to a lien priority dispute, eminent domain, code enforcement,
insolvency, bankruptcy or probate proceedings), then the Mortgagee at its sole
option may make appearances, disburse sums and take any action it deems
necessary to protect its interest (including but not limited to disbursement of
reasonable attorneys’ fees and court costs and entry upon the Premises to make
repairs). Any amounts disbursed shall become additional Liabilities, shall be
immediately due and payable upon notice from the Mortgagee to the Mortgagor,
and shall bear interest at the highest rate permitted under any of the
instruments evidencing any of the Liabilities. The Mortgagee’s rights under
this section shall be in addition to all other rights and remedies of the
Mortgagee under this Mortgage and the other Related Documents. Any action taken
by the Mortgagee under this section shall not be construed as curing any
default that gave rise to such action by the Mortgagee.


     10.     Due on Transfer. If all or any part of the Premises or any interest in
the Premises is transferred without the Mortgagee’s prior written consent, the
Mortgagee may, at its sole option, declare the Liabilities to be immediately
due and payable.


     11.     No Additional Lien. The Mortgagor covenants not to execute any
mortgage, security agreement, assignment of leases and rentals or other
agreement granting a lien against the interest of the Mortgagor in the Premises
without the prior written consent of the Mortgagee, and then only when the
document granting that lien expressly provides that it shall be subject to the
lien of this Mortgage for the full amount secured by this Mortgage and shall
also be subject and subordinate to all present and future leases affecting the
Premises.


     12.     Eminent Domain. Notwithstanding any taking under the power of eminent
domain, alteration of the grade of any road, alley, or the like, or other
injury or damage to or decrease in value of the Premises by any public or
quasi-public authority or corporation, the Mortgagor shall continue to pay the
Liabilities in accordance with the terms of the Related Documents. By executing
this Mortgage, the Mortgagor assigns the entire proceeds of any award or
payment and any interest to the Mortgagee. The Mortgagor will notify the
Mortgagee of any action or proceeding related to any taking of all or any part
of the Premises, shall defend that action or proceeding in consultation with
the Mortgagee and shall, if requested by the Mortgagee, deliver to the
Mortgagee all documents and instruments that may be required to allow the
Mortgagee to directly participate in or control such action or proceeding. The
proceeds of any taking or grant in lieu of any taking shall be applied first
toward reimbursement of all


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costs and expenses of the Mortgagee in collecting the proceeds, including
reasonable attorneys’ fees and court costs, and then toward payment of the
Liabilities, whether or not then due or payable, or the Mortgagee, at its
option, may apply the proceeds, or any part, to the alteration, restoration or
rebuilding of the Premises.


     13.     Environmental Provisions. As used herein: the term “Hazardous
Substance” shall mean any substance, material, or waste that is (a) included
within the definitions of “hazardous substances,” “hazardous materials,”
“hazardous waste,” “toxic substances,” “toxic materials,” “toxic waste,” or
words of similar import in any Environmental Law, (b) listed as hazardous
substances by the United States Department of Transportation or by the
Environmental Protection Agency, or (c) petroleum, petroleum-related, or a
petroleum by-product, asbestos or asbestos-containing material, polychlorinated
biphenyls, flammable, explosive, radioactive, freon gas, radon, or a pesticide,
herbicide, or any other agricultural chemical; and the term “Environmental Law”
shall mean any federal, state or local law, rule, regulation, decision, policy
or guideline, pertaining to Hazardous Substances, or protection of the
environment, and all present and future amendments thereto. Except as disclosed
in writing by the Mortgagor to the Mortgagee, the Mortgagor represents and
warrants to the Mortgagee that (i) neither the Premises nor the Mortgagor are
in violation of any Environmental Law applicable to the Premises, or are
subject to any existing, pending or threatened governmental investigation
pertaining to the Premises, or are subject to any remedial obligation or lien
under or in connection with any Environmental Law, (ii) the Mortgagor has no
actual knowledge or notice of the presence or release of Hazardous Substances
in, on or around any part of the Premises or the soil, groundwater or soil
vapor on or under the Premises, or the migration of any Hazardous Substance,
from or to any other property in the vicinity of the Premises; and (iii) the
Mortgagor’s intended future use of the Premises will not result in the release
of any Hazardous Substance in, on or around any part of the Premises or in the
soil, groundwater or soil vapor on or under the Premises, or the migration of
any Hazardous Substance from or to any other property in the vicinity of the
Premises.


     The Mortgagor shall neither use nor permit any third party to use,
generate, manufacture, produce, store, or release, on, under or about the
Premises, or transfer to or from the Premises, any Hazardous Substance, except
in compliance with all Environmental Laws, and shall otherwise comply, at the
Mortgagor’s sole expense and responsibility, with all Environmental Laws,
provided that if any such occurrence shall nevertheless happen, the Mortgagor
shall promptly remedy such condition, at its sole expense and responsibility.
The Mortgagor shall not permit any environmental liens to be placed on any
portion of the Premises. The Mortgagor shall promptly notify the Mortgagee in
writing if (a) any of the representations and warranties herein are no longer
accurate, (b) there may be any Hazardous Substance in, on or around the
Premises or the soil, groundwater or soil vapor on or under the Premises, or
(c) any violation of any Environmental Law on or affecting or otherwise in
respect of the Premises has occurred. The Mortgagee and its agents shall have
the right, and are hereby authorized, at any reasonable time to enter upon the
Premises for the purposes of observing the Premises, taking and removing soil
or groundwater samples, and conducting tests and/or site assessments on the
Premises, or taking such other actions as the Mortgagee deems necessary or
advisable to clean up, remove, resolve, or minimize the impact of, or otherwise
deal with, any Hazardous Substances on or affecting the Premises following
receipt of any notice from any person or entity asserting the existence or
possible existence of any Hazardous Substances pertaining to the Premises,
that, if true, could jeopardize the Mortgagee’s security for the Liabilities.
All reasonable costs and expenses paid or incurred by the Mortgagee in the
exercise of any such rights shall be secured hereby and shall be payable by the
Mortgagor upon demand.


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     The Mortgagor shall indemnify and hold the Mortgagee harmless from, for
and against any and all actions, causes of action, claims, liabilities, damages
(including foreseeable and unforeseeable consequential damages), losses, fines,
penalties, judgments, awards, settlements, and costs and expenses (including,
without limitation, reasonable attorneys’ fees, experts’, engineers’ and
consultants’ fees, and costs and expenses of investigation, testing,
remediation and dispute resolution) (collectively referred to as “Environmental
Costs”) that directly or indirectly arise out of or relate in any way to: (a)
Any investigation, cleanup, removal, remediation, or restoration work of site
conditions of the Premises relating to Hazardous Substances; (b) Any resulting
damages, harm, or injuries to the person or property of any third parties or to
any natural resources involving Hazardous Substances relating to the Premises;
(c) Any actual or alleged past or present disposal, generation, manufacture,
presence, processing, production, release, storage, transportation, treatment,
or use of any Hazardous Substance on, under, or about the Premises; (d) Any
actual or alleged past or present violation of any Environmental Law relating
to the Premises; (e) Any lien on any part of the Premises under any
Environmental Law; or (f) Breach of any representation or warranty by or
covenant of the Mortgagor herein. Notwithstanding anything contained herein to
the contrary, the foregoing indemnity shall not apply to (i) matters resulting
from the gross negligence or willful misconduct of the Mortgagee, or (ii)
matters resulting solely from the actions of the Mortgagee taken after the
Mortgagee has taken title to, or exclusive possession of the Premises, provided
that, in both cases, such matters shall not arise from or be accumulated with
any condition of the Premises, which condition was not caused by the Mortgagee.
The foregoing indemnity is expressly intended to include, and does include, any
Environmental Costs arising as a result of any strict liability imposed or
threatened to be imposed on the Mortgagee in connection with any of the
indemnified matters described in this Section or arising as a result of the
negligence of the Mortgagee in connection with such matters. This indemnity
shall continue in full force and effect and shall survive the payment and
performance of the Liabilities, the release of record of the lien, or any
foreclosure (or action in lieu thereof), of this Mortgage, the exercise by the
Mortgagee of any other remedy under this Mortgage or any other document or
instrument evidencing or securing the Liabilities, and any suit, proceeding or
judgment against the Mortgagor by the Mortgagee hereon.


     14.     Events of Default; Remedies. If any of the Liabilities are not paid at
maturity, whether by acceleration or otherwise, or if a default occurs by
anyone under the terms of this Mortgage or any Related Document, then the
Mortgagee may exercise all of the rights, powers and remedies expressly or
impliedly conferred on or reserved to it under this Mortgage or any other
Related Document, or now or later existing at law or in equity, including
without limitation the following: (i) the Mortgagee may declare the Liabilities
to be immediately due, (ii) the Mortgagee may proceed at law or in equity to
collect the Liabilities, foreclose this Mortgage or otherwise pursue any of its
rights or remedies available at law, in equity, pursuant to this Mortgage or
pursuant to any of the other Related Documents and (iii) the Mortgagee may
exercise any of its rights, powers or remedies pursuant to the 13CC.



		
	 	     14.1 Power of Sale. The Mortgagor hereby confers on the Mortgagee
the power to sell the Premises described in this Mortgage and the
interests of persons therein in the manner provided in the Oklahoma Power
of Sale Mortgage Foreclosure Act [Title 46, Okla. Stat. (1991), § 40, et
seq.] as the same may be amended from time to time (the “Act”) or other
applicable statutory authority. Such power of sale shall be exercised by
giving the Mortgagor Notice of Intent to Foreclose by Power of Sale and
setting forth, among other things, the nature of the breach(es) or
default(s) and the action required to effect a cure thereof and the time
period within which such cure may



9






 







		
	 	be effected, all in compliance with and as may be required by the
Act or other applicable statutory authority. If no cure is effected
within the statutory time limits, the Mortgagee may accelerate the
indebtedness secured hereby without further notice (the aforementioned
statutory cure period shall run concurrently with any contractual
provisions for notice and opportunity to cure), and the Mortgagee may
then proceed in the manner and subject to and as required by the
conditions of the Act or other applicable statutory authority to send to
the Mortgagor and other necessary parties a Notice of Sale and to sell
and convey the Premises in accordance with the Act or other applicable
statutory authority. The sale shall be made at one or more sales, as an
entirety or in parcels, upon such notice, at such time and places,
subject to all conditions and with the proceeds thereof to be applied all
as provided in said Act or other applicable statutory authority. No
action of the Mortgagee based upon the provisions contained herein or
contained in the Act, including, without limitation, the giving of the
Notice of Intent to Foreclose by Power of Sale or the Notice of Sale,
shall constitute an election of remedies which would preclude the
Mortgagee from pursuing judicial foreclosure before or at any time after
commencement of the power of sale foreclosure procedure.




		
	 	     14.2 Judicial Foreclosure. Whether or not proceedings have been
commenced by the exercise of the power of sale above given, the
Mortgagee, in lieu of proceeding with the power of sale, may at its
option declare the whole amount of the indebtedness secured by this
Mortgage remaining unpaid, immediately due and payable without notice,
and the Mortgagee may then proceed by suit or suits in equity or at law
to foreclose this Mortgage remaining unpaid, immediately due and payable
without notice, and the Mortgagee may then proceed by suit or suits in
equity or at law to foreclose this Mortgage. Appraisement of the Premises
is hereby waived or not waived at the option of the Mortgagee, such
option to be exercised at or prior to the time judgment is rendered in
such judicial foreclosure.




		
	 	     14.3 Appointment of Receiver. The Mortgagee shall have the immediate
and continuing right to appointment of a receiver for the Mortgaged
Property as provided by law [Title 12, Okla. Stat. (1991), § 1551, et
seq.] as amended, and the Mortgagor specifically consents and agrees to
appointment of a receiver for the Premises after any default hereunder.
Without limitation, the receiver shall have the power to protect and
preserve the Premises, operate the Premises prior to and during any
foreclosure proceedings, to collect the Rents and apply the proceeds,
over and above the costs of the receivership, to the Liabilities. The
receiver shall serve without bond, if permitted by law.




		
	 	     14.4 Foreclosure of Security Interest. In addition to all other
remedies described or referenced in this Mortgage, the Mortgagee, at its
sole subjective discretion, may have all or any part of the personal
property combined with the Premises covered hereby and sold together with
such Premises as an entirety at any foreclosure sale, or the Mortgagee,
at its option, may proceed solely or separately against the personal
property or any part thereof and have the same sold separately as
provided by the Uniform Commercial Code of the State of Oklahoma, either
in one parcel or in such parcels, manner or order as the Mortgagee, in
its sole subjective discretion may elect; the Mortgagee shall have the
right to take immediate and exclusive possession of the personal property
or any part thereof and for that purpose may, with or without judicial
process, enter upon any premises on which the personal property or any
part thereof may be situated and remove the same therefrom; the Mortgagee
shall be entitled to



10






 







		
	 	hold, maintain, preserve and prepare the personal property for sale
until disposed of, or may propose to retain the personal property subject
to the Mortgagor’s right of redemption in partial or total satisfaction
of the Mortgagor’s obligations as provided in the Uniform Commercial Code
of the State of Oklahoma; the Mortgagee without removal may render the
personal property unusable and dispose of the personal property on the
Mortgagor’s premises; the Mortgagee may require the Mortgagor to assemble
the personal property and make it available to the Mortgagee for its
possession at a place to be designated by the Mortgagee which is
reasonably convenient to both parties; unless the personal property is
perishable or threatens to decline speedily in value or is of a type
customarily sold on a recognized market, the Mortgagee shall give the
Mortgagor at least ten (10) days notice of the time and place of any
public sale or any personal property or of the time after which any
private sale or other intended dispositions thereof is to be made, by
United States registered or certified mail, postage prepaid, addressed to
the Mortgagor at the address provided in this Mortgage, which provisions
for notice the Mortgagor and the Mortgagee agree are reasonable; the
Mortgagee may buy all or part of the personal property at any public
sale, and if the personal property is of a type which is subject to
widely distributed standard price quotations. The Mortgagee may buy at
private sale; and further, the Mortgagee shall have all of the rights and
remedies of a Secured Party under the Uniform Commercial Code of the
State of Oklahoma. The Mortgagee shall be entitled to exercise any and
all other rights and remedies available by applicable laws and judicial
decisions.




		
	 	     14.5 No Waiver. In the event the Mortgagee shall elect to
selectively and successfully enforce its rights under this Mortgage or
any other documents or instruments securing payment of the Liabilities,
such action shall not be deemed a waiver or discharge of any other lien,
encumbrance or security interest securing payment of the Liabilities. The
foreclosure of any lien provided pursuant to this Mortgage without the
simultaneous foreclosure of all such liens shall not merge the liens
granted which are not foreclosed with any interest which the Mortgagee
might obtain as a result of such selective and successive foreclosure.




		
	 	     14.6 Sale of Parcels. In case of any sale under this Mortgage, by
virtue of judicial proceedings or otherwise, the Premises may be sold in
one parcel and as an entity or in such parcels, manner or order as the
Mortgagee in its sole discretion may elect.



By executing this Mortgage, the Mortgagor waives, in the event of a foreclosure
of this Mortgage or the enforcement by the Mortgagee of any other rights and
remedies in this Mortgage, any right otherwise available in respect to
marshalling of assets which secure the Liabilities or to require the Mortgagee
to pursue its remedies against any other such assets. The Mortgagor waives all
errors and imperfections in any proceedings instituted by the Mortgagee to
enforce any of its rights and remedies. The exercise of any one right or remedy
by the Mortgagee under this Mortgage or any of the other Related Documents
shall not impair or waive the Mortgagee’s right to exercise any other rights or
remedies available to it at law, in equity, under this Mortgage or under any of
the other Related Documents, all such rights and remedies being cumulative. All
fees, costs and expenses incurred by the Mortgagee in pursuing or enforcing its
rights and remedies at law, in equity, under this Mortgage or under any of the
other Related Documents, whether or not a lawsuit or legal action is filed,
including attorneys’ fees and court costs, shall be payable by the Mortgagor to
the Mortgagee on demand and shall be secured by this Mortgage.


11






 


     15.     Pledge. If the Mortgagor is not liable for all or any part of the
Liabilities, then the Mortgagor agrees that:



		
	 	     15.1 If any moneys become available from any source other than the
Premises that the Mortgagee can apply to the Liabilities, the Mortgagee
may apply them in any manner it chooses, including but not limited to
applying them against obligations, indebtedness or liabilities which are
not secured by this Mortgage.
	 
	 	     15.2 The Mortgagee may take any action against the Borrower, the
Premises or any other collateral for the Liabilities, or any other person
liable for any of the Liabilities.
	 
	 	     15.3 The Mortgagee may release the Borrower or anyone else from the
Liabilities, either in whole or in part, or release the Premises in whole
or in part or any other collateral for the Liabilities, and need not
perfect a security interest in the Premises or any other collateral for
the Liabilities.
	 
	 	     15.4 The Mortgagee does not have to exercise any rights that it has
against the Borrower or anyone else, or make any effort to realize on the
Premises or any other collateral for the Liabilities, or exercise any
right of setoff.
	 
	 	     15.5 Without notice or demand and without affecting the Mortgagor’s
obligations hereunder, from time to time, the Mortgagee is authorized to:
(a) renew, modify, compromise, extend, accelerate or otherwise change the
time for payment of, or otherwise change the terms of the Liabilities or
any part thereof, including increasing or decreasing the rate of interest
thereon; (b) release, substitute or add any one or more sureties,
endorsers, or guarantors; (c) take and hold other collateral for the
payment of the Liabilities, and enforce, exchange, substitute,
subordinate, waive or release any such collateral; (d) proceed against
the Premises or any other collateral for the Liabilities and direct the
order or manner of sale as the Mortgagee in its discretion may determine;
and (e) apply any and all payments received by the Mortgagee in
connection with the Liabilities, or recoveries from the Premises or any
other collateral for the Liabilities, in such order or manner as the
Mortgagee in its discretion may determine.
	 
	 	     15.6 The Mortgagor’s obligations hereunder shall not be released,
diminished or affected by (a) any act or omission of the Mortgagee, (b)
the voluntary or involuntary liquidation, sale or other disposition of
all or substantially all of the assets of the Borrower, or any
receivership, insolvency, bankruptcy, reorganization, or other similar
proceedings affecting the Borrower or any of its assets, (c) any change
in the composition or structure of the Borrower, including a merger or
consolidation with any other person or entity, or (d) any payments made
upon the Liabilities.
	 
	 	     15.7 The Mortgagor expressly consents to any impairment of any other
collateral for the Liabilities, including, but not limited to, failure to
perfect a security interest and release of any other collateral for the
Liabilities and any such impairment or release shall not affect the
Mortgagor’s obligations hereunder.
	 
	 	     15.8 The Mortgagor waives and agrees not to enforce any rights of
subrogation, contribution or indemnification that it may have against the
Borrower, any person liable on the Liabilities, or the Premises, until
the Borrower and the Mortgagor



12






 







		
	 	have fully performed all their obligations to the Mortgagee, even if
those obligations are not covered by this Mortgage.
	 
	 	     15.9 The Mortgagor waives (a) to the extent permitted by law, all
rights and benefits under any laws or statutes regarding sureties, as may
be amended, (b) any right the Mortgagor may have to receive notice of the
following matters before the Mortgagee enforces any of its rights: (i)
the Mortgagee’s acceptance of this Mortgage, (ii) any credit that the
Mortgagee extends to the Borrower, (iii) the Borrower’s default, (iv) any
demand, diligence, presentment, dishonor and protest, or (v) any action
that the Mortgagee takes regarding the Borrower, anyone else, any other
collateral for the Liabilities, or any of the Liabilities, which it might
be entitled to by law or under any other agreement, (c) any right it may
have to require the Mortgagee to proceed against the Borrower, any other
obligor or guarantor of the Liabilities, the Premises or any other
collateral for the Liabilities, or pursue any remedy in the Mortgagee’s
power to pursue, (d) any defense based on any claim that the Mortgagor’s
obligations exceed or are more burdensome than those of the Borrower, (e)
the benefit of any statute of limitations affecting the Mortgagor’s
obligations hereunder or the enforcement hereof, (f) any defense arising
by reason of any disability or other defense of the Borrower or by reason
of the cessation from any cause whatsoever (other than payment in full)
of the obligation of the Borrower for the Liabilities, and (g) any
defense based on or arising out of any defense that the Borrower may have
to the payment or performance of the Liabilities or any portion thereof.
The Mortgagee may waive or delay enforcing any of its rights without
losing them. Any waiver affects only the specific terms and time period
stated in the waiver.
	 
	 	     15.10 The Mortgagor agrees that to the extent any payment is
received by the Mortgagee in connection with the Liabilities, and all or
any part of such payment is subsequently invalidated, declared to be
fraudulent or preferential, set aside or required to be repaid by the
Mortgagee or paid over to a trustee, receiver or any other entity,
whether under any bankruptcy act or otherwise (any such payment is
hereinafter referred to as a “Preferential Payment”), then this Mortgage
shall continue to be effective or shall be reinstated, as the case may
be, and whether or not the Mortgagee is in possession of this Mortgage,
and, to the extent of such payment or repayment by the Mortgagee, the
Liabilities or part thereof intended to be satisfied by such Preferential
Payment shall be revived and continued in full force and effect as if
said Preferential Payment had not been made. If this Mortgage must be
reinstated, the Mortgagor agrees to execute and deliver to the Mortgagee
any new mortgages and agreements, if necessary or if requested by the
Mortgagee, in form and substance acceptable to the Mortgagee, covering
the Premises.
	 
	 	     15.11 Any rights of the Mortgagor, whether now existing or hereafter
arising, to receive payment on account of any indebtedness (including
interest) owed to the Mortgagor by the Borrower, or to withdraw capital
invested by the Mortgagor in the Borrower, or to receive distributions
from the Borrower, shall at all times be subordinate to the full and
prior repayment to the Mortgagee of the Liabilities. The Mortgagor shall
not be entitled to enforce or receive payment of any sums hereby
subordinated until the Liabilities have been paid in full and any such
sums received in violation of this Mortgage shall be received by the
Mortgagor in trust for the Mortgagee. The Mortgagor agrees to fully
cooperate with the Mortgagee and not to delay, impede or otherwise
interfere with the efforts of the Mortgagee to secure payment from the
assets which secure the Liabilities including actions, proceedings,
motions, orders, agreements or other matters relating to relief from
automatic stay, abandonment of property, use of cash collateral



13






 







		
	 	and sale of the Mortgagee’s collateral free and clear of all liens.
The foregoing notwithstanding, until the occurrence of any default, the
Mortgagor is not prohibited from receiving distributions from the
Borrower in an amount equal to any income tax liability imposed on the
Mortgagor attributable to the Mortgagor’s ownership interest in the
Borrower, if any.



     16.     Representations
by the Mortgagor. Each Mortgagor represents that: (a)
it is well and truly seized of good and marketable fee simple title to the real
property comprising the Premises and it is the lawful owner of the personal
property comprising the Premises, subject only to Permitted Encumbrances; (b)
the execution and delivery of this Mortgage and the performance of the
obligations it imposes do not violate any law, conflict with any agreement by
which it is bound or require the consent or approval of any governmental
authority or any third party; (c) this Mortgage is a valid and binding
agreement enforceable according to its terms; (d) any balance sheets, profit
and loss statements, and other financial statements furnished to the Mortgagee
in connection with the Liabilities are accurate and fairly reflect the
financial condition of the organizations and persons to which they apply on
their effective dates, including contingent liabilities of every type, which
financial condition has not changed materially and adversely since those dates;
and (e) it shall not permit any proceedings in foreclosure or otherwise that
would affect the Premises. Each Mortgagor, other than a natural person, further
represents that: (i) it is duly organized, existing and in good standing
pursuant to the laws under which it is organized and (ii) the execution and
delivery of this Mortgage and the performance of the obligations it imposes (A)
are within its powers and have been duly authorized by all necessary action of
its governing body and (B) do not contravene the terms of its articles of
incorporation or organization, its by-laws, or any partnership, operating or
other agreement governing its affairs.


     17.     Notice. Any notices and demands under or related to this document
shall be in writing and delivered to the intended party at its address stated
herein, and if to the Mortgagee, at its main office if no other address of the
Mortgagee is specified herein, by one of the following means: (a) by hand, (b)
by a nationally recognized overnight courier service, or (c) by certified mail,
postage prepaid, with return receipt requested. Notice shall be deemed given:
(a) upon receipt if delivered by hand, (b) on the Delivery Day after the day of
deposit with a nationally recognized courier service, or (c) on the third
Delivery Day after the notice is deposited in the mail. “Delivery Day” means a
day other than a Saturday, a Sunday or any other day on which national banking
associations are authorized to be closed. Any party may change its address for
purposes of the receipt of notices and demands by giving notice of such change
in the manner provided in this provision. This notice provision shall be
inapplicable to any judicial or non-judicial proceeding where state law governs
the manner and timing of notices in foreclosure or receivership proceedings.


     18.     Miscellaneous. If any provision of this Mortgage is in conflict with
any statute or rule of law or is otherwise unenforceable for any reason
whatsoever, then that provision is null and void to the extent of the conflict
or unenforceability and shall be severed from but shall not invalidate any
other provision of this Mortgage. No waiver by the Mortgagee of any right or
remedy granted or failure to insist on strict performance by the Mortgagor
waives any other right or remedy of the Mortgagee or waives or bars the
subsequent exercise of the same right or remedy by the Mortgagee for any
subsequent default by the Mortgagor. All rights and remedies of the Mortgagee
are cumulative.


     These promises and agreements bind and these rights benefit the parties
and their respective successors and assigns. If there is more than one
Mortgagor, the obligations under


14






 


this Mortgage are joint and several. The Mortgagor agrees that the
Mortgagee may at any time sell or transfer one or more participation interests
in all or any part of the Liabilities to one or more purchasers whether or not
related to the Mortgagee.


     This Mortgage and the Related Documents constitute the entire
understanding of the parties hereto and may not be amended or altered except by
a written instrument that has been signed by the party(ies) against which
enforcement of the amendment or alteration is sought.


     Captions in this Mortgage are for convenience of reference only and do not
limit the provisions of this Mortgage.


     Time is of the essence in this Mortgage.


     19.     Governing Law and Venue. This Mortgage is delivered in the State of
Oklahoma and governed by Oklahoma law (without giving effect to its laws of
conflicts); provided, however, that if the real estate that is the subject of
this Mortgage is located in another state, the laws of such other state shall
govern the validity, enforceability, perfection, priority, construction,
effect, enforcement and remedies with respect to this Mortgage, but nothing
herein shall be construed to provide that the laws of any state other than the
State of Oklahoma shall apply to the obligations and indebtedness secured by
this Mortgage. The parties agree that any legal action or proceeding with
respect to any of its obligations under this Mortgage shall be brought by the
Mortgagee exclusively in state or federal court located in Tulsa County of the
State of Oklahoma and that proper venue shall lie only in such courts. By the
execution and delivery of this Mortgage, the Mortgagor submits to and accepts,
for itself and in respect of its property, generally and unconditionally, the
exclusive jurisdiction of those courts. The Mortgagor waives any claim that the
State of Oklahoma is not a convenient forum or the proper venue for any such
suit, action or proceeding.


     20.     Indemnification. In addition to the indemnification provisions
described in the section captioned “Environmental Provisions” of this Mortgage,
the Mortgagor agrees to indemnify, defend and hold the Mortgagee, or any of its
subsidiaries or affiliates or their successors, and each of their respective
shareholders, directors, officers, employees and agents (collectively, the
“Indemnified Persons”) harmless from any and all obligations, claims,
liabilities, losses, damages, penalties, fines, forfeitures, actions,
judgments, suits, costs, expenses and disbursements of any kind or nature
(including, without limitation, any Indemnified Person’s attorneys’ fees)
(collectively, the “Claims”) which may be imposed upon, incurred by or assessed
against any Indemnified Person (whether or not caused by any Indemnified
Person’s sole, concurrent, or contributory negligence) arising out of or
relating to this Mortgage; the Mortgagor’s use of the property covered by this
Mortgage; the exercise of the rights and remedies granted under this Mortgage
(including, without limitation, the enforcement of this Mortgage and the
defense of any Indemnified Person’s action or inaction in connection with this
Mortgage); and in connection with the Mortgagor’s failure to perform all of the
Mortgagor’s obligations under this Mortgage, except to the limited extent that
the Claims against any such Indemnified Person are proximately caused by such
Indemnified Person’s gross negligence or willful misconduct. The
indemnification provided for in this section shall survive the termination of
this Mortgage and shall extend to and continue to benefit each individual or
entity who is or has at any time been an Indemnified Person. The Mortgagor’s
indemnity obligations under this section shall not in any way be affected by
the presence or absence of covering insurance, or by the amount of such
insurance or by the failure or refusal of any insurance earner to perform any
obligation on its part under any insurance policy or policies affecting the
Mortgagor’s assets or the Mortgagor’s business activities. Should any Claim be
made or brought against any


15






 


Indemnified Person by reason of any event as to which the Mortgagor’s
indemnification obligations apply, then, upon any Indemnified Person’s demand,
the Mortgagor, at its sole cost and expense, shall defend such Claim in the
Mortgagor’s name, if necessary, by the attorneys for the Mortgagor’s insurance
carrier (if such Claim is covered by insurance), or otherwise by such attorneys
as any Indemnified Person shall approve. Any Indemnified Person may also engage
its own attorneys at its reasonable discretion to defend the Mortgagor and to
assist in its defense and the Mortgagor agrees to pay the fees and
disbursements of such attorneys.


     21.     Material
Information. The Mortgagee acknowledges Section 10.1 of the
Revolving Credit and Term Loan Agreement, dated of even date herewith between
the parties, regarding its obligations surrounding the possession of material,
non-public information. , the Mortgagor agrees that the Mortgagee may, subject
to such obligations, provide any information or knowledge the Mortgagee may
have about the Mortgagor or about any matter relating to this Mortgage or the
Related Documents to any of its subsidiaries or affiliates or their successors.
Any dissemination of material, non-public information to any party not listed
in the foregoing sentence shall only be made subsequent to such party signing a
non-disclosure agreement in a form satisfactory to Mortgagee.


     22.     Relationship
of the Parties. This Mortgage is given as an incentive to
a lending transaction between the Mortgagee and the Mortgagor, and in no event
shall the Mortgagee be construed or held to be a partner, joint venturer or
associate of the Mortgagor in the conduct of business of the Mortgagor on or
about the Premises or otherwise, nor shall the Mortgagee be liable for any
debts or obligations incurred by the Mortgagor in the conduct of such business,
it being understood and agreed that the relationship of the parties is and at
all times shall remain that of lender and borrower.


     23.     Mineral
Interests. The Mortgagor acknowledges that any exploration or
drilling for oil, gas or other minerals in, on, about, or through the Premises
would waste and impair the value of the Premises as security for the payment of
the Liabilities, and the Mortgagor covenants and agrees that it will not
explore or drill for any oil, gas or other minerals, or consent, permit,
authorize or otherwise agree to any exploration or drilling of any oil, gas or
other minerals in, on or through the Premises, without first obtaining from the
Mortgagee written permission, which permission may be granted or withheld on
such terms as the Mortgagee, in its sole subjective discretion, deems
appropriate and shall not be valid until recorded. However, the Mortgagor does
not own any of such oil, gas and other minerals, and the Mortgagor may not be
able to prevent third party owners and lessees thereof from exercising their
rights to explore or drill for such oil, gas and other minerals. If any other
mineral owner, mineral lessee or other third party explores or drills or
undertakes to explore or drill for any oil, gas or other minerals in, on, under
or through the Premises which exploration or drilling would, in the reasonable
judgment of the Mortgagee, waste or impair the value of the Premises as
security for the payment of the Liabilities, then the Mortgagor further
covenants and agrees to pay over unto the Mortgagee any and all moneys,
proceeds, awards or judgments received by the Mortgagor representing damages or
payment in lieu thereof occasioned by such exploration or drilling, which
moneys, proceeds, awards or judgments when received by the Mortgagee shall be
applied towards the Liabilities.


16






 



	 	 	 
	 	 	
MORTGAGOR:
	 	 	 
	 	 	
XETA TECHNOLOGIES, INC.
	 	 	 
	 	 	
By: /s/ Robert B. Wagner
	 	 	


	 	 	
Name: Robert B. Wagner
	 	 	
Title: CFO



ACKNOWLEDGMENT




	 	 	 	 	 	 	 
	STATE OF OKLAHOMA	 	 	 	)	 	 
	 	 	 	 	)	 	ss.
	COUNTY OF TULSA	 	 	 	)	 	 



     This
instrument was acknowledged before me on this 1st day of October,
2003 by Robert B. Wagner, as CFO of XETA TECHNOLOGIES,
INC., an Oklahoma corporation.



	 	 	 
	 	 	
/s/ LaTisha O’Neal
	 	 	


	 	 	
Notary Public

My Commission Expires: 05/04/07
	 	 	
Commission No. 03005686

(SEAL)



17






 



Exhibit “A”



(Legal Description)



Part of Lot One (1), Block One (1), GREENWAY BUSINESS PARK III, an Addition to
the City of Broken Arrow, Tulsa County, State of Oklahoma, according to the
Recorded Plat No. 4796, being more particularly described as follows:


Beginning at a point 466 feet East of the Northwest corner of said Lot 1;
thence S 89°53’46” E 643.85 feet; thence N 35°58’48” E 170 feet; thence
Southeasterly 52.65 feet along a curve to the left with a radius of 717.36 feet
and a tangent bearing of S 54°01“12” E; thence S 58°13’32” E 156.16 feet;
thence Southeasterly 161.88 feet along a curve to the left with a radius of
441.39 feet; thence S 41°03’02” W 393.26 feet; thence South 60.20 feet; thence
S 00°02’00” W 263.30 feet; to a point on the North right-of-way line of West
Tacoma Street; thence continuing along said right-of-way the following: N
89°55’59” W 155.22 feet; Northwesterly 118.36 feet along a curve to the right
with a radius of 276.21 feet; N 65°20’27” W 14.17 feet; Westerly 137.44 feet
along a curve to the left with a radius of 320.21 feet; N 89°55’59” W 260 feet;
Southwesterly 140.56 feet along a curve to the left with a radius of 540.65
feet; thence N 00°18’14” E 610.86 feet to the point of beginning.


18