MORTGAGE AND SECURITY AGREEMENT

(State of South Dakota)

[// GUIDANCE: This is a South Dakota-specific real estate mortgage intended to secure a promissory note or other loan obligations. Customize all bracketed placeholders and review with South Dakota counsel prior to execution and recording.]

TABLE OF CONTENTS

1. DOCUMENT HEADER.............................................. 1
2. DEFINITIONS.................................................. 3
3. OPERATIVE PROVISIONS......................................... 6
4. REPRESENTATIONS & WARRANTIES................................. 9
5. COVENANTS & RESTRICTIONS.................................... 11
6. DEFAULT & REMEDIES.......................................... 14
7. RISK ALLOCATION............................................. 17
8. DISPUTE RESOLUTION.......................................... 19
9. GENERAL PROVISIONS.......................................... 20
10. EXECUTION & ACKNOWLEDGMENT.................................. 22

Page numbers are for drafting convenience only and should be adjusted in final formatting.

1. DOCUMENT HEADER

1.1 Parties

This Mortgage (this “Agreement” or “Mortgage”) is made as of [EFFECTIVE DATE] (the “Effective Date”) by and between:
(a) [BORROWER LEGAL NAME], a [STATE OF ORGANIZATION & ENTITY TYPE], whose mailing address is [BORROWER ADDRESS] (“Borrower”); and
(b) [LENDER LEGAL NAME], a [STATE OF ORGANIZATION & ENTITY TYPE], whose mailing address is [LENDER ADDRESS] (“Lender”).

1.2 Recitals

A. Borrower is indebted to Lender pursuant to that certain [PROMISSORY NOTE / CREDIT AGREEMENT] dated [NOTE DATE] in the original principal amount of [PRINCIPAL AMOUNT] (together with all extensions, renewals, modifications, and replacements, the “Note”).
B. Borrower is the fee simple owner of, and desires to grant Lender a first-priority mortgage lien on, the real property located in [COUNTY], South Dakota, more particularly described in Exhibit A attached hereto (the “Property”), together with all improvements and rights appurtenant thereto.
C. Lender is willing to extend or continue credit to Borrower upon the condition, inter alia, that Borrower execute and deliver this Mortgage.

1.3 Consideration

For good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as set forth herein.

1.4 Governing Jurisdiction

This Mortgage is governed by and shall be construed in accordance with the laws of the State of South Dakota (without regard to conflict of laws principles).

2. DEFINITIONS

For ease of reference the following terms, when capitalized, shall have the meanings set forth below. Undefined capitalized terms shall have the meanings ascribed to them elsewhere in this Mortgage or in the Note.

“Affiliate” – Any entity directly or indirectly controlling, controlled by, or under common control with a party.
“Applicable Law” – All federal, state, and local statutes, regulations, ordinances, and judicial decisions binding on Borrower, the Property, or this Mortgage, including specifically the South Dakota Codified Laws governing real property mortgages and foreclosures.
“Collateral” – Collectively, the Property, the Improvements, the Fixtures, the Rents, and all other property described in Section 3.1.
“Default Rate” – The rate of interest specified in the Note to accrue after the occurrence and during the continuance of an Event of Default.
“Deficiency Judgment” – A personal judgment against Borrower for any portion of the Debt remaining unpaid after application of the proceeds of a foreclosure sale, subject to the limitations of Applicable Law.
“Debt” – All principal, interest, late charges, fees, costs, expenses, indemnity obligations, and other amounts owing from time to time under the Note or any Loan Document.
“Event of Default” – Any event described in Section 6.1.
“Fixtures” – All goods and personal property now or hereafter affixed to, located on, or used in connection with the Property which are or become fixtures under Applicable Law.
“Improvements” – All buildings, structures, and other improvements now or hereafter erected on the Property, together with all replacements and additions.
“Indemnified Parties” – Lender and its Affiliates, successors, assigns, directors, officers, employees, agents, and representatives.
“Loan Documents” – Collectively, this Mortgage, the Note, and all other agreements, certificates, and instruments evidencing or securing the Debt.
“Permitted Encumbrances” – The liens and encumbrances described in Exhibit B, and any other encumbrances approved in writing by Lender.
“Rents” – All rents, issues, profits, royalties, and income of the Property, including advance rentals and security deposits.
“Secured Obligations” – The Debt and all other present and future obligations of Borrower to Lender under the Loan Documents.
“State-Specific Foreclosure Law” – South Dakota statutes requiring judicial foreclosure, providing a statutory redemption period, and prescribing procedures for obtaining a deficiency judgment.

[// GUIDANCE: Add or delete definitions as required by the transaction. Cross-check each defined term for consistency.]

3. OPERATIVE PROVISIONS

3.1 Grant of Lien and Security Interest

For the purpose of securing the full and timely payment and performance of the Secured Obligations, Borrower hereby mortgages, grants, bargains, sells, conveys, warrants, assigns, and pledges to Lender, WITH POWER OF SALE TO THE EXTENT PERMITTED BY SOUTH DAKOTA LAW, all right, title, and interest of Borrower, now owned or hereafter acquired, in and to:

(a) the Property;
(b) the Improvements;
(c) the Fixtures;
(d) the Rents;
(e) all easements, rights-of-way, tenements, hereditaments, and appurtenances relating to the Property;
(f) all proceeds, products, substitutions, and replacements of the foregoing (collectively, the “Collateral”).

3.2 Secured Obligations

This Mortgage secures the Secured Obligations, whether now existing or hereafter incurred, and whether voluntary or involuntary, direct or indirect, absolute or contingent, and all renewals and extensions thereof.

3.3 Payment and Performance

Borrower shall pay and perform all Secured Obligations in strict accordance with the terms of the Loan Documents on or before the dates and in the manner provided therein.

3.4 Taxes and Assessments

Borrower shall pay, prior to delinquency, all taxes, assessments, and governmental charges levied against the Property, and shall deliver to Lender, upon request, evidence of such payment.

3.5 Insurance

(a) Required Coverage. Borrower shall maintain property insurance covering loss or damage to the Collateral on an “all-risk” basis in an amount not less than 100% of the full insurable replacement cost.
(b) Lender as Loss Payee. All policies shall name Lender as mortgagee and loss payee pursuant to a standard mortgagee clause.
(c) Evidence of Insurance. Borrower shall deliver certificates of insurance and, upon request, copies of policies.

3.6 Maintenance of Property

Borrower shall keep the Property in good order and repair, free from waste, and in compliance with Applicable Law.

3.7 Compliance With Environmental Laws

Borrower shall comply with all Environmental Laws and shall not cause or permit any Hazardous Materials to be located on the Property except in compliance with Applicable Law.

3.8 Books and Records; Inspection

Borrower shall maintain complete and accurate books and records relating to the Property and shall permit Lender to inspect the Property and such records upon reasonable notice.

3.9 Transfers; Encumbrances

Except as expressly permitted by Lender in writing, Borrower shall not sell, convey, lease (except bona fide arms-length leases), pledge, or encumber any interest in the Collateral.

3.10 Further Assurances

Borrower shall execute and deliver all instruments and take all actions reasonably requested by Lender to better evidence, perfect, or protect the lien and security interests granted herein.

4. REPRESENTATIONS & WARRANTIES

Borrower represents and warrants to Lender as of the Effective Date and continuing thereafter that:

4.1 Organization; Authority. Borrower is duly organized, validly existing, and in good standing under the laws of its state of formation and has full power and authority to execute the Loan Documents and mortgage the Collateral.

4.2 Title. Borrower holds good and marketable fee simple title to the Property, free and clear of all liens and encumbrances except the Permitted Encumbrances.

4.3 Enforceability. The Loan Documents constitute the legal, valid, and binding obligations of Borrower enforceable in accordance with their terms.

4.4 No Conflicts. The execution and performance of the Loan Documents do not violate any organizational documents, contracts, or Applicable Law binding on Borrower.

4.5 Litigation. No litigation or proceeding is pending or, to Borrower’s knowledge, threatened that would materially adversely affect Borrower or the Property.

4.6 Compliance. The Property and its current use comply in all material respects with Applicable Law, including zoning, environmental, and building codes.

4.7 Survival. All representations and warranties survive the execution and delivery of this Mortgage and any foreclosure or conveyance in lieu thereof.

5. COVENANTS & RESTRICTIONS

5.1 Affirmative Covenants
(a) Performance. Borrower shall duly perform all covenants required under the Loan Documents.
(b) Notices. Borrower shall promptly notify Lender of any Event of Default, material casualty, condemnation, or litigation affecting the Collateral.
(c) Financial Reporting. Borrower shall deliver to Lender (i) annual financial statements within 120 days after fiscal year-end, and (ii) such other information as Lender reasonably requests.

5.2 Negative Covenants
(a) Alterations. Except for non-structural alterations not exceeding [DOLLAR THRESHOLD] in any twelve-month period, Borrower shall not materially alter the Improvements without Lender’s prior written consent.
(b) Hazardous Materials. Borrower shall not permit the release of Hazardous Materials on the Property in violation of Environmental Laws.
(c) Change of Control. Borrower shall not permit a Change of Control without Lender’s prior written consent.

5.3 Cure Period
Except as otherwise expressly provided herein, Borrower shall have [10] days to cure monetary defaults and [30] days to cure non-monetary defaults following receipt of written notice from Lender; provided, however, that no cure period shall apply to (i) intentional waste, (ii) fraud, or (iii) any default incapable of cure.

6. DEFAULT & REMEDIES

6.1 Events of Default

Each of the following shall constitute an “Event of Default”:
(a) Failure to make any payment of principal, interest, or other amount under the Note when due;
(b) Breach of any covenant or agreement contained in any Loan Document not cured within the applicable cure period;
(c) Any representation or warranty proves untrue in any material respect;
(d) Insolvency, bankruptcy, or assignment for the benefit of creditors by Borrower;
(e) Attachment, levy, or seizure of the Collateral or any part thereof;
(f) Abandonment or material waste of the Property.

6.2 Remedies Upon Event of Default

Upon the occurrence and during the continuance of an Event of Default, Lender may, subject to State-Specific Foreclosure Law:

1. Acceleration – Declare all Secured Obligations immediately due and payable.
2. Judicial Foreclosure – Commence an action in the appropriate South Dakota circuit court to foreclose this Mortgage and, upon obtaining judgment, cause the Property to be sold by the sheriff in accordance with South Dakota law.
3. Appointment of Receiver – Seek appointment of a receiver for the Property, including collection of Rents.
4. Possession – Take immediate possession of the Property if permitted by the court.
5. Recovery of Fees – Recover all costs of enforcement, including reasonable attorneys’ fees and expenses.
6. Other Rights – Exercise any other right or remedy available at law or in equity.

6.3 Foreclosure Procedure; Statutory Redemption

(a) Judicial Action Required. Foreclosure shall be by judicial action only; power-of-sale foreclosure is not available in South Dakota.
(b) Redemption Period. Borrower (and, where applicable, junior lienholders) shall have the statutory right to redeem the Property within the period prescribed by South Dakota law (currently [INSERT REDEMPTION PERIOD] following the sheriff’s sale), unless such right is shortened or waived in accordance with Applicable Law.
(c) Waivers. Any waiver or shortening of the redemption period shall comply strictly with the requirements of South Dakota law and public policy.

6.4 Deficiency Judgment

Lender may seek a Deficiency Judgment to the extent permitted by South Dakota law, provided that (i) the application is made within the statutory time limit (currently [INSERT TIME LIMIT, e.g., 90 DAYS] following the foreclosure sale), and (ii) the court determines the fair value of the Property in accordance with Applicable Law.

[// GUIDANCE: South Dakota imposes specific procedural steps for deficiency judgments, including fair-value determinations. Insert the correct statutory deadlines.]

7. RISK ALLOCATION

7.1 Indemnification by Borrower

Borrower shall indemnify, defend, and hold harmless the Indemnified Parties from and against any and all claims, liabilities, losses, damages, penalties, fines, costs, and expenses (including reasonable attorneys’ fees) arising out of or relating to (a) the ownership, operation, or condition of the Collateral, (b) any breach of the Loan Documents, or (c) the presence or release of Hazardous Materials on the Property, except to the extent arising from the gross negligence or willful misconduct of an Indemnified Party.

7.2 Limitation of Liability

Notwithstanding anything to the contrary contained herein, the aggregate liability of either party to the other shall not exceed the then-outstanding amount of the Debt; provided, however, that the foregoing limitation shall not apply to (i) Borrower’s indemnity obligations under Section 7.1, (ii) fraud, or (iii) intentional misconduct.

7.3 Insurance Proceeds and Condemnation Awards

All insurance proceeds and condemnation awards shall be applied in accordance with the terms of the Note or, if not addressed therein, as Lender may elect, subject to applicable South Dakota law governing the rights of mortgagees.

7.4 Force Majeure

Neither party shall be liable for failure or delay in performance (other than monetary obligations) caused by events beyond its reasonable control, including acts of God, war, terrorism, or governmental actions, provided that such party gives prompt notice and uses commercially reasonable efforts to resume performance.

8. DISPUTE RESOLUTION

8.1 Governing Law. This Mortgage and the Secured Obligations shall be governed by the laws of the State of South Dakota.

8.2 Forum Selection. Each party irrevocably submits to the exclusive jurisdiction of the state courts located in [COUNTY], South Dakota, and waives any objection based on forum non conveniens.

8.3 Arbitration. Arbitration is expressly excluded.

8.4 Jury Trial Waiver. TO THE EXTENT PERMITTED BY LAW, EACH PARTY KNOWINGLY AND VOLUNTARILY WAIVES ANY RIGHT TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING ARISING OUT OF THE LOAN DOCUMENTS.

8.5 Injunctive Relief. Nothing herein shall limit Lender’s right to seek specific performance, appointment of a receiver, or other equitable relief, including foreclosure.

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 against whom enforcement is sought.

9.2 Assignment. Lender may assign or participate its interest in the Loan Documents without Borrower’s consent. Borrower may not assign any obligations without Lender’s prior written consent.

9.3 Successors and Assigns. This Mortgage shall be binding on and inure to the benefit of the parties hereto and their respective successors and assigns.

9.4 Severability. If any provision is held invalid or unenforceable, the remaining provisions shall remain in full force and effect, and the invalid provision shall be reformed to the minimum extent necessary to render it enforceable.

9.5 Integration. The Loan Documents constitute the entire agreement between the parties with respect to the subject matter and supersede all prior understandings.

9.6 Counterparts; Electronic Signatures. This Mortgage may be executed in multiple counterparts, each of which shall be deemed an original, and all of which together constitute one instrument. Signatures transmitted electronically or by facsimile shall be deemed original signatures.

9.7 Notices. All notices shall be in writing and delivered by (i) certified mail, return receipt requested, (ii) nationally recognized overnight courier, or (iii) personal delivery, addressed to the party at its address set forth in Section 1.1 (or such other address as a party may designate by notice).

10. EXECUTION & ACKNOWLEDGMENT

IN WITNESS WHEREOF, Borrower has executed this Mortgage as of the date first set forth above.

Borrower:

[BORROWER LEGAL NAME]
By: _____
Name: _____
Title: _______

[ADD ADDITIONAL SIGNATURE BLOCKS IF MULTIPLE BORROWERS]

Lender:

[LENDER LEGAL NAME]
By: _____
Name: _____
Title: _______

NOTARY ACKNOWLEDGMENT

State of South Dakota )
) ss.
County of [COUNTY] )

On this _ day of _, 20__, before me, the undersigned officer, personally appeared [NAME(S) OF SIGNATORY(IES)], 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.

Witness my hand and official seal.

Notary Public
My Commission Expires: _______

EXHIBIT A

LEGAL DESCRIPTION OF PROPERTY

[INSERT COMPLETE LEGAL DESCRIPTION]

EXHIBIT B

PERMITTED ENCUMBRANCES

1. Real property taxes and assessments not yet delinquent.
2. Easements, covenants, and restrictions of record, provided they do not materially adversely affect the lien of this Mortgage or the value or use of the Property.
3. [ADD ADDITIONAL PERMITTED ENCUMBRANCES, IF ANY]

[// GUIDANCE: Record this Mortgage with the Register of Deeds for the county where the Property is located. Confirm documentary tax requirements and add any required transfer tax declarations or recording cover sheets.]