Mortgage Agreement - North Dakota

MORTGAGE AGREEMENT

(North Dakota – Real Property)

TABLE OF CONTENTS

1. Document Header
2. Definitions
3. Grant and Security Interest
4. Representations & Warranties
5. Covenants & Restrictions
6. Events of Default; Remedies
7. Risk Allocation
8. Dispute Resolution
9. General Provisions
10. Execution & Acknowledgment

1. DOCUMENT HEADER

1.1 Parties
This Mortgage Agreement (“Mortgage”) is entered into as of [EFFECTIVE DATE] (“Effective Date”) by and between:

(a) [BORROWER LEGAL NAME], a [ENTITY TYPE / INDIVIDUAL], whose address is [BORROWER ADDRESS] (“Borrower”); and

(b) [LENDER LEGAL NAME], a [ENTITY TYPE] organized under the laws of [STATE], whose address is [LENDER ADDRESS] (“Lender”).

1.2 Recitals
A. Borrower is indebted to Lender pursuant to that certain Promissory Note dated the Effective Date in the original principal amount of [PRINCIPAL AMOUNT] United States Dollars (USD) (together with all extensions, renewals, modifications, amendments, and substitutions, the “Note”).
B. As a condition to making the loan evidenced by the Note, Lender requires that Borrower grant to Lender a mortgage lien on the Property (defined below).
C. Borrower is willing to enter into this Mortgage to secure the Obligations (defined below) under the Note and the other Loan Documents (defined below).

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are acknowledged, the parties agree as follows:

2. DEFINITIONS

For purposes of this Mortgage, the following terms have the meanings set forth below. Defined terms appear in alphabetical order; capitalized terms not defined herein have the meanings assigned in the Note.

“Closing” means the consummation of the loan transaction contemplated by the Loan Documents on the Effective Date.

“Default Rate” has the meaning given in the Note.

“Environmental Laws” means all applicable federal, state, and local statutes, regulations, ordinances, and common-law duties concerning health, safety, and the environment.

“Event of Default” has the meaning assigned in Section 6.1.

“Improvements” means all existing and future buildings, structures, fixtures, and other improvements situated on the Land.

“Land” means the real property located in the County of [COUNTY], State of North Dakota, legally described on Exhibit A attached hereto.

“Loan Documents” means the Note, this Mortgage, any assignment of rents, financing statements, guaranties, environmental indemnities, and all other documents now or hereafter executed in connection with the Obligations.

“Obligations” means (i) all indebtedness evidenced by the Note, (ii) all other sums, fees, costs, and expenses payable under the Loan Documents, and (iii) all extensions, renewals, modifications, and replacements of any of the foregoing.

“Permitted Encumbrances” means those matters listed on Exhibit B and any other encumbrance approved in writing by Lender.

“Property” means the Land, Improvements, fixtures, personal property, and other collateral described in Section 3.

“Rents” means all rents, issues, profits, and other income of the Property.

3. GRANT AND SECURITY INTEREST

3.1 Granting Clause. Borrower hereby MORTGAGES, GRANTS, CONVEYS, ASSIGNS, AND PLEDGES to Lender all of Borrower’s right, title, and interest in and to the following (collectively, the “Property”):

a. The Land;
b. All Improvements and fixtures;
c. All easements, rights-of-way, privileges, and appurtenances thereto;
d. All Rents;
e. All insurance policies and condemnation awards relating to the Property;
f. All proceeds, products, substitutions, and replacements of the foregoing.

3.2 Purpose and Obligations Secured. This Mortgage is given to secure (i) payment and performance of the Obligations, and (ii) any future advances that Lender, at its sole discretion, may make to or for the benefit of Borrower, to the maximum principal amount of [SECURED DEBT AMOUNT].

3.3 Fixture Filing. This instrument shall be effective as a financing statement filed as a fixture filing with respect to fixtures located or to be located on the Land. The address of the secured party (Lender) and the debtor (Borrower) are as first set forth above.

3.4 Assignment of Leases and Rents. Borrower hereby absolutely and unconditionally assigns to Lender all present and future Leases and Rents. Notwithstanding such assignment, prior to an Event of Default and revocation by Lender, Borrower shall have a revocable license to collect and retain Rents as they become due.

4. REPRESENTATIONS & WARRANTIES

Borrower represents and warrants to Lender, on the Effective Date and continuing so long as any Obligations remain outstanding, that:

4.1 Authority. Borrower has full power and authority to execute, deliver, and perform the Loan Documents.
4.2 Title. Borrower holds good and marketable fee simple title to the Land, free of liens and encumbrances other than Permitted Encumbrances.
4.2.1 Homestead. If the Land constitutes the homestead (as defined in N.D.C.C. § 47-18-01) of a married Borrower, this Mortgage cannot be conveyed or encumbered unless executed and acknowledged by both spouses, as required by N.D.C.C. § 47-18-05; both spouses accordingly join in the execution of this Mortgage below regardless of the homestead's value. If this Mortgage encumbers a homestead on property of forty (40) acres or more and is not a purchase-money mortgage, the separately signed homestead-waiver statement required by N.D.C.C. § 47-18-05.1 is set forth in Section 10.1 below.
4.3 Enforceability. The Loan Documents constitute the legal, valid, and binding obligations of Borrower, enforceable against Borrower in accordance with their terms.
4.4 No Conflicts. Execution and performance of the Loan Documents do not violate any law, court order, organizational documents, or agreement affecting Borrower or the Property.
4.5 Compliance with Laws. The Property complies in all material respects with applicable zoning, building, environmental, and other laws.
4.6 Litigation. No litigation or governmental proceeding is pending or, to Borrower’s knowledge, threatened that could materially affect Borrower or the Property.
4.7 Hazardous Materials. No Hazardous Materials (other than customary quantities of cleaning supplies) are present on the Property in violation of Environmental Laws.

The foregoing representations and warranties shall survive Closing and shall not be affected by any inspection or knowledge of Lender.

5. COVENANTS & RESTRICTIONS

Borrower covenants and agrees that until the Obligations are indefeasibly paid in full:

5.1 Payment and Performance. Borrower shall timely pay and perform all Obligations.
5.2 Taxes and Assessments. Borrower shall pay prior to delinquency all taxes, assessments, and governmental charges on the Property, subject to Borrower’s right to contest in good faith with adequate reserves.
5.3 Insurance. Borrower shall maintain insurance on the Property in such types and amounts as Lender reasonably requires, naming Lender as mortgagee and loss payee.
5.4 Maintenance and Waste. Borrower shall keep the Property in good repair and condition, free of waste, impairment, or deterioration beyond ordinary wear and tear.
5.5 Compliance with Laws. Borrower shall comply in all material respects with all laws relating to the Property, including but not limited to Environmental Laws.
5.6 Further Assurances. Borrower shall execute and deliver such further instruments and take such further actions as Lender reasonably requests to perfect, protect, or preserve the lien and security interest granted herein.
5.7 Negative Covenants. Without Lender’s prior written consent, Borrower shall not (i) transfer any interest in the Property, (ii) incur liens senior to or pari passu with this Mortgage, or (iii) materially alter or demolish any Improvements, except as may be required by casualty or condemnation.
5.8 Notice of Certain Matters. Borrower shall promptly notify Lender of (i) any Event of Default or event which with notice or lapse of time would become an Event of Default, (ii) any material damage to or condemnation of the Property, and (iii) any governmental or legal action affecting the Property.
5.9 Books and Records; Inspection. Borrower shall keep accurate books and records relating to the Property and shall permit Lender and its representatives to inspect same and the Property at reasonable times upon reasonable notice.

6. EVENTS OF DEFAULT; REMEDIES

6.1 Events of Default. Each of the following constitutes an “Event of Default”:
a. Monetary Default: Borrower fails to pay any amount due under the Note or any other Loan Document when due, and such failure continues beyond any applicable cure period.
b. Covenant Default: Borrower fails to perform any covenant contained in the Loan Documents, and such failure continues for [30] days after written notice; provided that if the failure is not reasonably curable within such period, Borrower shall have an additional [60] days to cure so long as Borrower diligently pursues cure.
c. Misrepresentation: Any representation or warranty made by Borrower is materially false when made or deemed made.
d. Insolvency: Borrower becomes insolvent, makes an assignment for the benefit of creditors, or becomes subject to any bankruptcy or insolvency proceeding.
e. Unauthorized Transfer or Lien: Borrower transfers any interest in the Property or permits any lien other than a Permitted Encumbrance without Lender’s consent.

6.2 Remedies. Upon an Event of Default and expiration of any applicable cure period, Lender may, subject to North Dakota law:

a. Acceleration: Declare all Obligations immediately due and payable;
b. Pre-Foreclosure Notice: Before commencing foreclosure, serve Borrower, as title owner of record, with the written notice before foreclosure required by N.D.C.C. §§ 32-19-20 through 32-19-22, given not less than thirty (30) nor more than ninety (90) days before commencement of the foreclosure action, stating the amount required to cure and specifying that Borrower has thirty (30) days from service to cure the default and reinstate the Mortgage under N.D.C.C. § 32-19-28, unless such notice is excused under N.D.C.C. § 32-19-23 (e.g., deceased record owner with no appointed personal representative, or abandoned property);
c. Judicial Foreclosure: Commence an action to foreclose this Mortgage by judicial action in the state district court of the county in which the Property is situated, as required by N.D.C.C. ch. 32-19. Borrower acknowledges that North Dakota does not permit foreclosure of this Mortgage by advertisement or other non-judicial power-of-sale process (N.D.C.C. § 35-22-01, limiting foreclosure by advertisement to mortgages held by the State of North Dakota or its agencies, departments, or instrumentalities);
d. Possession and Receivership: Apply for appointment of a receiver to manage the Property and collect Rents;
e. Collection of Rents: Direct any tenants to remit Rents directly to Lender;
f. Right to Cure Defaults: Enter the Property (without committing trespass) to perform necessary work or make payments to cure defaults, with all reasonable costs added to the Obligations;
g. Deficiency Judgment: Subject to N.D.C.C. § 32-19-03 (and, for commercial real property, N.D.C.C. § 32-19-06.1, and for agricultural land, N.D.C.C. § 32-19-06.2), pursue a deficiency judgment to the extent permitted by law. No deficiency judgment is available where the Property is residential property of four or fewer units on up to forty contiguous acres occupied by the owner as a homestead. On agricultural land of more than forty acres, any deficiency is limited to the difference between the debt and the land's fair market value as of commencement of the action, and must be sought in a separate action within ninety days after the sheriff's sale. In all other cases, any deficiency is limited to the difference between the amount due and the fair market value of the Property as determined by a court-appointed licensed appraiser; and
h. Other Remedies: Exercise any other right or remedy permitted under the Loan Documents or applicable law.

6.3 Redemption. Borrower and any other party entitled to redeem shall have the statutory right of redemption provided under N.D.C.C. § 32-19-18: (i) for the Property generally, sixty (60) days after the sheriff's sale; (ii) for agricultural land, three hundred sixty-five (365) days after the filing of the summons and complaint (but not earlier than sixty (60) days after the sheriff's sale); and (iii) as such periods may be eliminated for abandoned property as provided in N.D.C.C. § 32-19-19. Nothing herein shall waive or extend any redemption period provided by statute.

6.4 Waiver of Marshalling. Borrower waives any right to require Lender to marshal assets, exhaust collateral, or proceed against third parties before enforcing this Mortgage.

7. RISK ALLOCATION

7.1 Indemnification. Borrower shall indemnify, defend, and hold harmless Lender, its affiliates, and their respective officers, directors, employees, and agents (each, an “Indemnified Party”) from and against any and all claims, losses, liabilities, damages, and expenses (including reasonable attorneys’ fees) arising out of or relating to (i) the Loan Documents, (ii) the Property, or (iii) any breach by Borrower of its representations, warranties, or covenants, except to the extent caused by the gross negligence or willful misconduct of such Indemnified Party. This indemnity shall survive satisfaction of the Obligations and any foreclosure or conveyance in lieu thereof.

7.2 Limitation of Liability. Notwithstanding anything to the contrary contained herein, the aggregate liability of Borrower for indemnification and other monetary obligations shall not exceed the Secured Debt Amount; provided, however, that the foregoing limitation shall not apply to (i) fraud, (ii) misappropriation of Rents, insurance proceeds, or condemnation awards, or (iii) environmental liabilities.

7.3 Insurance. Borrower shall maintain insurance in accordance with Section 5.3. All insurance proceeds shall, at Lender’s option, be applied to restoration of the Property or to reduction of the Obligations.

7.4 Force Majeure. Borrower shall not be deemed in default for failure to perform non-monetary obligations caused by events beyond Borrower’s reasonable control (e.g., acts of God, war, epidemic), provided Borrower gives prompt notice and resumes performance as soon as practicable.

8. DISPUTE RESOLUTION

8.1 Governing Law. THIS MORTGAGE AND THE OTHER LOAN DOCUMENTS SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NORTH DAKOTA, WITHOUT GIVING EFFECT TO CONFLICT-OF-LAWS PRINCIPLES THAT WOULD REQUIRE THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION.

8.2 Forum Selection. Borrower irrevocably submits to the exclusive jurisdiction of the state courts located in [COUNTY] County, North Dakota, for the purpose of any action or proceeding arising out of or relating to this Mortgage or any other Loan Document.

8.3 Arbitration. The parties expressly agree that NO provision of the Loan Documents shall be construed to require arbitration; all disputes shall be resolved in the courts identified above.

8.4 Jury Waiver. [JURY WAIVER LANGUAGE IF DESIRED AND ENFORCEABLE UNDER ND LAW – INSERT OR DELETE ACCORDINGLY.]

8.5 Specific Performance; Injunctive Relief. Borrower acknowledges that Lender’s right to foreclose upon the Property constitutes an equitable remedy, and Borrower waives any objection to Lender’s request for specific performance or injunctive relief.

9. GENERAL PROVISIONS

9.1 Amendments and Waivers. No amendment or waiver of any provision of this Mortgage shall be effective unless in writing and signed by the party to be charged. No waiver shall extend to any subsequent or other default.

9.2 Assignment. Lender may assign or transfer its rights under this Mortgage without Borrower’s consent. Borrower may not assign or delegate its rights or obligations without Lender’s prior written consent.

9.3 Binding Effect. This Mortgage shall bind and inure to the benefit of the parties and their respective heirs, personal representatives, successors, and assigns.

9.4 Severability. If any provision of this Mortgage is held invalid or unenforceable, the remaining provisions shall remain in full force, and the invalid provision shall be interpreted to effect the parties’ intent to the maximum lawful extent.

9.5 Integration. The Loan Documents collectively constitute the entire agreement between the parties regarding the subject matter and supersede all prior or contemporaneous oral or written agreements.

9.6 Counterparts; Electronic Signatures. This Mortgage may be signed in counterparts, which together form one instrument. Electronic or transmitted copies may be used between the parties where applicable law permits. For recording, obtain the execution and acknowledgment, including original signatures, required by N.D.C.C. § 47-19-03 or an applicable exception.

9.7 Notices. All notices required or permitted hereunder shall be in writing and delivered by (i) hand delivery, (ii) certified U.S. mail (return receipt requested), (iii) nationally-recognized overnight courier, or (iv) email with confirmation of receipt, to the addresses set forth in Section 1.1 (or such other address as a party may designate by notice). Notice is deemed given (A) when delivered if by hand, (B) three business days after deposit in U.S. mail, (C) one business day after delivery to overnight courier, or (D) upon confirmed receipt if by email.

9.8 Time of the Essence. Time is of the essence with respect to all dates and time periods set forth herein.

10. EXECUTION & ACKNOWLEDGMENT

IN WITNESS WHEREOF, the parties have executed this Mortgage as of the Effective Date.

10.1 Homestead Waiver Statement (North Dakota — required only if the Land is a homestead of forty (40) acres or more securing a non-purchase-money mortgage, per N.D.C.C. § 47-18-05.1). If applicable, the following statement must appear in a conspicuous manner and be followed by a separate date and signature, distinct from the Borrower's signature to the entire Mortgage:

I understand that homestead property is in many cases protected from the claims of creditors and exempt from judicial sale and that, by signing this contract, I voluntarily give up my right to this protection for this property with respect to claims based upon this contract.

Date: [__/__/____] Signature: __________________________________ (Borrower — homestead waiver)

Date: [__/__/____] Signature: __________________________________ (Borrower's Spouse — homestead waiver, if applicable)

Borrower:

__________________________________
[NAME & TITLE]
[ENTITY NAME]

Borrower's Spouse (required if the Land is a homestead of a married Borrower, per N.D.C.C. § 47-18-05 — both spouses must execute and acknowledge this same instrument):

__________________________________
[SPOUSE NAME]

Lender:

__________________________________
[NAME & TITLE]
[ENTITY NAME]

NOTARY ACKNOWLEDGMENT

On this _____ day of __________, 20____, before me, a Notary Public in and for said County and State, personally appeared ___________________________, known to me (or satisfactorily proven) to be the person(s) whose name(s) is/are subscribed to the foregoing instrument and acknowledged that he/she/they executed the same for the purposes therein contained.

IN WITNESS WHEREOF, I hereunto set my hand and official seal.

__________________________________
Notary Public for the State of North Dakota
My commission expires: ___________

EXHIBIT A – LEGAL DESCRIPTION

[INSERT FULL, RECORDABLE LEGAL DESCRIPTION OF LAND]

EXHIBIT B – PERMITTED ENCUMBRANCES

[List any existing liens, easements, rights-of-way, covenants, or other encumbrances approved by Lender.]