Mortgage Agreement - Connecticut

MORTGAGE DEED, ASSIGNMENT OF RENTS, AND SECURITY AGREEMENT

(Connecticut)

TABLE OF CONTENTS

1. Document Header
2. Definitions
3. Granting Clauses
4. Obligations Secured
5. Representations & Warranties
6. Covenants
7. Default & Remedies
8. Risk Allocation
9. Dispute Resolution
10. General Provisions
11. Execution Block

1. DOCUMENT HEADER

This MORTGAGE DEED, ASSIGNMENT OF RENTS, AND SECURITY AGREEMENT (this “Mortgage”) is made as of [EFFECTIVE DATE] (the “Effective Date”), by and between:

• Borrower: [BORROWER LEGAL NAME], a [ENTITY TYPE & STATE OF ORGANIZATION] having an address at [ADDRESS] (“Borrower”); and
• Lender: [LENDER LEGAL NAME], a [ENTITY TYPE & STATE OF ORGANIZATION] having an address at [ADDRESS] (“Lender”).

RECITALS
A. Borrower is indebted to Lender under that certain Promissory Note dated of even date herewith in the original principal amount of [INSERT DOLLAR AMOUNT] (the “Note”).
B. Borrower desires to secure the Obligations (as defined below) with a mortgage lien on the Property (as defined below).
C. The parties intend this Mortgage to comply with and be enforceable under the laws of the State of Connecticut.

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are acknowledged, Borrower hereby agrees as follows:

2. DEFINITIONS

For purposes of this Mortgage, the following terms have the following meanings. Capitalized terms not defined here have the meanings ascribed to them elsewhere in this Mortgage or in the Note.

“Collateral” – collectively, the Real Property, Fixtures, Personal Property, Rents, and Proceeds.

“Default Rate” – the per-annum rate specified in the Note to apply after an Event of Default.

“Environmental Laws” – any and all federal, state, or local statutes, regulations, ordinances, and common-law principles relating to pollution, contamination, or protection of human health or the environment.

“Event of Default” – any event described in Section 7.1.

“Fixtures” – all goods that are, or are to become, fixtures affixed to the Real Property.

“Indebtedness” – the principal of, interest on, and all other amounts payable under the Note, this Mortgage, and any other Loan Documents.

“Loan Documents” – collectively, the Note, this Mortgage, and any other instruments evidencing, securing, or governing the loan contemplated herein.

“Obligations” – (a) the Indebtedness; (b) Borrower’s performance under the Loan Documents; and (c) all renewals, extensions, modifications, and replacements of any of the foregoing.

“Personal Property” – all goods, accounts, general intangibles, inventory, equipment, and other personal property now or later located on, used in connection with, or arising from the ownership, use, or operation of the Real Property.

“Property” – the Real Property together with the Fixtures and Personal Property.

“Proceeds” – all proceeds (as defined in Article 9 of the Uniform Commercial Code) of the Property.

“Real Property” – the land described on Exhibit A attached hereto, together with all easements, rights-of-way, privileges, and appurtenances belonging thereto.

“Rents” – all present and future rents, issues, profits, royalties, and income of the Property, whether due or to become due.

3. GRANTING CLAUSES

3.1 Grant of Mortgage. Borrower, intending to be legally bound, hereby mortgages, grants, bargains, sells, conveys, and confirms unto Lender, with mortgage covenants and upon the statutory condition, all of Borrower’s right, title, and interest in and to the Collateral, to secure the Obligations. Any foreclosure shall proceed through a court action under Section 7.

3.2 Grant of Security Interest. Borrower grants to Lender a security interest in the Fixtures, Personal Property, Rents, and Proceeds to secure the Obligations and authorizes Lender to file UCC financing statements describing the Collateral.

3.3 Assignment of Rents. Borrower absolutely and unconditionally assigns to Lender all Rents. Until an Event of Default, Borrower may collect and retain Rents; upon an Event of Default, Lender may, without notice, collect Rents and apply them to the Obligations.

4. OBLIGATIONS SECURED

This Mortgage secures:
a. Payment and performance of the Indebtedness;
b. Payment and performance of all other Obligations; and
c. All costs, expenses, advances, and disbursements incurred by Lender pursuant to the Loan Documents.

5. REPRESENTATIONS & WARRANTIES

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

5.1 Organization and Authority. Borrower is duly organized, validly existing, and in good standing under the laws of its state of organization and is duly qualified to transact business in Connecticut.

5.2 Title; No Liens. Borrower holds marketable fee simple title to the Real Property, free and clear of all liens and encumbrances except those permitted in Schedule 1 (the “Permitted Encumbrances”).

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

5.4 Compliance With Laws. The Property and its present use comply in all material respects with applicable zoning, building, environmental, and other laws.

5.5 Hazardous Materials. No Hazardous Materials (as defined under Environmental Laws) are present on the Real Property in violation of Environmental Laws.

Survival. All representations and warranties shall survive closing and shall not be merged into any foreclosure deed or reconveyance.

6. COVENANTS

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

6.1 Payment; Performance. Borrower shall promptly pay and perform the Obligations when due.

6.2 Taxes and Impositions. Borrower shall pay prior to delinquency all real estate taxes, assessments, and charges affecting the Property.

6.3 Insurance. Borrower shall maintain insurance on the Property in types and amounts reasonably required by Lender, naming Lender as mortgagee and loss payee pursuant to a standard mortgagee clause.

6.4 Maintenance. Borrower shall keep the Property in good order and repair, and shall not commit waste or permit impairment of the Property.

6.5 Compliance With Laws. Borrower shall comply with all laws, ordinances, regulations, and orders affecting the Property, including Environmental Laws.

6.6 Further Assurances. Borrower shall, upon request, execute and deliver further instruments reasonably required to carry out the intent of this Mortgage.

6.7 Negative Covenants. Without Lender’s prior written consent, Borrower shall not:
a. Create or permit any lien on the Property other than Permitted Encumbrances;
b. Transfer any interest in the Property, except as expressly permitted; or
c. Alter the Property in a manner that would materially reduce its value.

6.8 Inspection. Lender or its agents may enter and inspect the Property upon reasonable notice and during reasonable hours.

6.9 Notice of Certain Matters. Borrower shall promptly notify Lender of any: (i) default under any obligation secured by a lien on the Property; (ii) litigation or governmental proceeding affecting the Property; or (iii) release or threatened release of Hazardous Materials on or near the Property.

7. DEFAULT & REMEDIES

7.1 Events of Default. Any of the following constitutes an “Event of Default”:

a. Failure to pay any amount due under the Note or this Mortgage within [GRACE PERIOD] days after its due date;
b. Breach of any covenant, warranty, or obligation under any Loan Document and continuance beyond any applicable cure period;
c. Any representation or warranty proves materially false or misleading;
d. Voluntary or involuntary bankruptcy or insolvency of Borrower;
e. Any levy, seizure, or attachment of the Property not released within [NUMBER] days.

7.2 Notice and Cure. Except for payment defaults (which require notice only if and to the extent required by applicable law), Lender shall give Borrower written notice of default and a cure period of [DAYS] days unless such notice or cure period is waived or prohibited by applicable law.

7.3 Remedies. Upon an Event of Default and expiration of any required notice or cure period, Lender may, at its option and without further demand:

a. Declare the entire Indebtedness immediately due and payable;
b. Exercise all rights of a secured party under the Uniform Commercial Code;
c. Enter and take possession of the Property and collect Rents;
d. Commence a foreclosure action in accordance with Connecticut law, which may be:
i. Strict foreclosure; or
ii. Foreclosure by sale.
e. Seek appointment of a receiver;
f. Pursue any other remedy permitted at law or in equity.

7.4 Right of Redemption. Connecticut recognizes two methods of mortgage foreclosure: strict foreclosure and foreclosure by sale, at the court's discretion under Conn. Gen. Stat. § 49-24. In a strict foreclosure, Borrower's equity of redemption is not extinguished by a fixed post-sale redemption period but rather by the passage, without payment in full, of the "law day" assigned to Borrower by the court (with subsequent encumbrancers, if any, assigned successive law days in inverse order of lien priority); in a foreclosure by sale, Borrower's redemption rights continue until the court approves the foreclosure sale. Borrower waives any right of redemption to the fullest extent permitted by law after the expiration of the applicable law day(s) or court approval of sale, as the case may be.

7.5 Deficiency Judgment. If this Mortgage is foreclosed by strict foreclosure, Lender (or any other party to the foreclosure action) may, within thirty (30) days after the time limited for redemption has expired (i.e., after the last law day has passed without redemption), file a motion seeking a deficiency judgment pursuant to Conn. Gen. Stat. § 49-14, which motion shall be set for an evidentiary hearing held not less than fifteen (15) days after filing, at which the court will establish a valuation for the Property and render judgment for the difference, if any, between such valuation and Lender's claim; failure to timely file such motion following a strict foreclosure permanently bars Lender from recovering any deficiency from Borrower (but not necessarily from a guarantor). If this Mortgage is foreclosed by sale, Lender may seek a deficiency judgment pursuant to Conn. Gen. Stat. § 49-28, which does not impose the same fixed thirty-day filing deadline, although Lender should not unreasonably delay in filing such a motion.

7.6 Attorneys’ Fees and Costs. Borrower shall pay all reasonable attorneys’ fees, costs, and expenses incurred by Lender in enforcing the Loan Documents, whether or not litigation is commenced, plus interest thereon at the Default Rate.

8. RISK ALLOCATION

8.1 Indemnification by Borrower. Borrower shall indemnify, defend, and hold harmless Lender and its affiliates, 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: (a) the Property or its operation; (b) any breach of the Loan Documents; or (c) the presence or release of Hazardous Materials on or about the Property, except to the extent caused by the gross negligence or willful misconduct of an Indemnified Party.

8.2 Limitation of Liability. Lender’s recourse against Borrower shall be limited to the Collateral and the secured debt amount, except for: (a) fraud or intentional misrepresentation; (b) misapplication of insurance or condemnation proceeds; (c) waste; or (d) Environmental indemnity obligations (collectively, “Excluded Matters”).

8.3 Insurance and Casualty. Insurance proceeds shall be applied in accordance with the Loan Documents. In the event of condemnation, awards shall, at Lender’s option, be applied to restoration of the Property or to the Indebtedness.

8.4 Force Majeure. Performance by Borrower shall be excused to the extent delayed by events beyond Borrower’s reasonable control (other than payment obligations), provided Borrower promptly notifies Lender and resumes performance as soon as practicable.

9. DISPUTE RESOLUTION

9.1 Governing Law. This Mortgage and the Loan Documents shall be governed by, and construed in accordance with, the laws of the State of Connecticut, without regard to its conflict-of-laws principles.

9.2 Forum Selection. Borrower submits to the Connecticut Superior Court in the judicial district of [JUDICIAL DISTRICT] for an action arising out of the Loan Documents, subject to mandatory venue rules. A foreclosure or redemption action shall be made returnable to the judicial district where the Property is located, subject to the exceptions in Conn. Gen. Stat. § 51-345(b).

9.3 Arbitration Excluded. The parties expressly agree that arbitration is excluded; all disputes shall be resolved in accordance with Section 9.2.

9.4 Jury Trial Waiver. TO THE EXTENT PERMITTED BY APPLICABLE LAW, BORROWER AND LENDER KNOWINGLY, VOLUNTARILY, AND INTENTIONALLY WAIVE ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING ARISING OUT OF THE LOAN DOCUMENTS.

9.5 Injunctive Relief. Nothing herein shall limit Lender’s right to seek injunctive or equitable relief, including foreclosure or appointment of a receiver.

10. GENERAL PROVISIONS

10.1 Modifications; Waivers. No modification or waiver of any provision of the Loan Documents is effective unless in a written instrument signed by the party against whom enforcement is sought.

10.2 Assignment. Lender may assign or participate its interests without consent. Borrower may not assign any rights without Lender’s prior written consent.

10.3 Successors and Assigns. The Loan Documents bind and benefit the parties and their respective successors and assigns.

10.4 Severability. If any provision is held invalid, the remaining provisions shall remain in full force to the fullest extent permitted by law.

10.5 Merger. The Loan Documents constitute the entire agreement between the parties with respect to the loan, superseding all prior agreements.

10.6 Counterparts; Electronic Signatures. The Loan Documents may be executed in counterparts and by electronic signatures, each of which shall be deemed an original.

10.7 Notices. All notices shall be in writing and delivered by hand, overnight courier, or certified mail (return receipt requested) to the addresses set forth above (or such other address as a party may designate), effective upon receipt or refusal.

10.8 Recording. Borrower shall pay all recording taxes, fees, and charges, including the per-page recording fees charged by the town clerk under Conn. Gen. Stat. § 7-34a (currently $60 for the first page and $5 for each additional page of the recorded instrument, with a higher flat fee applicable where a "nominee of a mortgagee," such as MERS, appears as mortgagee). Upon satisfaction of the Obligations, Lender shall execute and deliver a release or satisfaction in recordable form.

10.9 Right to Release Portions. Lender may, without notice, release any portion of the Collateral, grant extensions, or otherwise modify the Obligations, all without releasing Borrower.

11. EXECUTION BLOCK

IN WITNESS WHEREOF, Borrower has executed this Mortgage as of the Effective Date, in the presence of the two witnesses subscribing below, as required for a valid conveyance of Connecticut real property under Conn. Gen. Stat. § 47-5.

BORROWER:
☐
By: ________________________
Name: ______________________
Title: _____________________

Signed, sealed, and delivered in the presence of:

WITNESS 1:
Signature: ________________________
Print Name: _______________________

WITNESS 2:
Signature: ________________________
Print Name: _______________________

[Corporate/LLC acknowledgment block]

LENDER:
☐
By: ________________________
Name: ______________________
Title: _____________________

Signed, sealed, and delivered in the presence of:

WITNESS 1:
Signature: ________________________
Print Name: _______________________

WITNESS 2:
Signature: ________________________
Print Name: _______________________

[Corporate/LLC acknowledgment block]

[NOTARY ACKNOWLEDGMENT – CONNECTICUT]
State of Connecticut )
County of ___________ ) ss. [CITY], Connecticut [DATE]

On this ___ day of __________, 20__, before me, the undersigned notary public, personally appeared ____________________________, who acknowledged that (he/she) is the __________________ of ________________________, a _____________, and that (he/she) signed the foregoing instrument in such capacity, and that the instrument is the free act and deed of the entity and (his/her) free act and deed.

___________________________________
Notary Public
My Commission Expires: _____________

EXHIBIT A

Legal Description of Real Property

[INSERT METES AND BOUNDS OR PLAT DESCRIPTION]

SCHEDULE 1

Permitted Encumbrances

[List of matters permitted to remain of record]