Mortgage Agreement - Delaware

MORTGAGE AND SECURITY AGREEMENT

(Delaware Real Property – Judicial Foreclosure Jurisdiction)

TABLE OF CONTENTS

1. Document Header
2. Definitions
3. Operative Provisions
4. Representations & Warranties
5. Covenants & Restrictions
6. Default & Remedies
7. Risk Allocation
8. Dispute Resolution
9. General Provisions
10. Execution Block
11. Notary Acknowledgment

1. DOCUMENT HEADER

THIS MORTGAGE AND SECURITY AGREEMENT (this “Mortgage”) is made as of [EFFECTIVE DATE] (the “Effective Date”) by and between:

• [BORROWER LEGAL NAME], a [STATE OF ORGANIZATION] [ENTITY TYPE], having an address at [BORROWER ADDRESS] (“Mortgagor” or “Borrower”); and

• [LENDER LEGAL NAME], a [STATE OF ORGANIZATION] [ENTITY TYPE], having an address at [LENDER ADDRESS] (“Mortgagee” or “Lender”).

Recitals

A. Borrower is indebted to Lender under that certain [LOAN AGREEMENT/NOTE] dated [DATE] (as amended, the “Credit Agreement”) in the original principal amount of $[PRINCIPAL AMOUNT] (together with all extensions, renewals, modifications, future advances and other indebtedness described herein, the “Secured Debt”).

B. Borrower desires to grant, and Lender is willing to accept, a mortgage lien and security interest in the Property (as defined below) to secure the Secured Debt upon the terms and conditions of this Mortgage.

NOW, THEREFORE, in consideration of the mutual covenants herein, and other valuable consideration, the receipt and sufficiency of which are acknowledged, the parties agree as follows:

2. DEFINITIONS

Capitalized terms used but not defined herein shall have the meanings set forth in the Credit Agreement. As used herein:

“Affiliate” means any Person that directly or indirectly controls, is controlled by, or is under common control with another Person.

“Code” means the Internal Revenue Code of 1986, as amended.

“Collateral” has the meaning assigned in Section 3.1.

“County” means [COUNTY NAME], Delaware.

“Environmental Law” means any federal, state, or local statute, regulation, or ordinance relating to pollution, hazardous substances, or environmental protection.

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

“Fixtures” has the meaning given in 6 Del. C. § 9-102(a)(41).

“Foreclosure” means a judicial foreclosure action by writ of scire facias sur mortgage under 10 Del. C. § 5061 et seq., or other judicial remedy exercised by Mortgagee after an Event of Default, including sale of the Property by the sheriff pursuant to a Delaware Superior Court judgment.

“Impositions” means all taxes, assessments, water rates, sewer rents, and other governmental and quasi-governmental charges on or relating to the Property.

“Property” means collectively the Real Property, Improvements, Fixtures, and Personal Property described in Section 3.1.

“Real Property” means the land located in the County described on Exhibit A attached hereto and incorporated herein by reference.

“Right of Redemption” means Borrower's limited right, before confirmation of a sheriff's sale under 10 Del. C. §§ 5065–5066, to satisfy the secured debt, accrued interest, and allowable costs to redeem the Property. An objection to confirmation or motion to set aside the sale is separate, as described in Section 6.4.

“Secured Debt” has the meaning set forth in Recital A and Section 3.2.

3. OPERATIVE PROVISIONS

3.1 Grant of Mortgage and Security Interest

For good and valuable consideration, Borrower hereby irrevocably grants, bargains, sells, conveys, mortgages, pledges, assigns, transfers, and sets over to Lender the following (collectively, the “Collateral”), subject to foreclosure by judicial process as provided in Section 6.4:

a. The Real Property;

b. All buildings, structures, and other improvements now or hereafter erected thereon (the “Improvements”);

c. All Fixtures now or hereafter attached thereto;

d. All rents, issues, profits, royalties, income, and other benefits arising from the Real Property (together, “Rents”);

e. All leases, licenses, and occupancy agreements affecting the Real Property, together with all guaranties thereof (collectively, the “Leases”); and

f. All additions, substitutions, replacements, insurance and condemnation proceeds, and products of the foregoing, whether now owned or hereafter acquired (collectively, the “Personal Property”).

3.2 Indebtedness Secured

This Mortgage secures:

i. Payment and performance of the Secured Debt;

ii. All future advances that Lender may, at its option, make to or for the benefit of Borrower, whether obligatory or made at Lender's option, and whether or not any indebtedness is outstanding at the time an advance is made, to the same extent and with the same priority as if such future advances were made on the Effective Date, in accordance with 25 Del. C. § 2118; provided that the total unpaid principal balance secured hereby at any one time shall not exceed $[MAXIMUM PRINCIPAL AMOUNT]; and

iii. All costs, fees, and expenses, including Attorneys’ Fees (as defined in Section 6.3), incurred by Lender in protecting or enforcing its rights hereunder.

3.3 Fixture Filing

This Mortgage constitutes a financing statement filed as a fixture filing under Article 9 of the Uniform Commercial Code as adopted in Delaware. The record owner of the Real Property is Borrower, whose organizational information appears in Section 1. Upon recording, this Mortgage is effective as a financing statement filed as a fixture filing and perfects a security interest in any collateral described herein that is or may become Fixtures, provided the requirements of 6 Del. C. § 9-502(b)-(c) are satisfied (indication that the collateral is or will become fixtures, a real property description sufficient to give constructive notice of a mortgage, and, if Borrower does not have a recorded interest in the Real Property, the name of the record owner).

3.4 Conditions Precedent

The obligations of Lender to make any future advance are subject to satisfaction of all conditions precedent set forth in the Credit Agreement and Section 5 herein.

3.5 Payment Terms

Borrower shall repay the Secured Debt in accordance with the Credit Agreement. All payments shall be made in lawful money of the United States, free of set-off or counterclaim, to Lender at its address for notices or such other place as Lender may designate.

4. REPRESENTATIONS & WARRANTIES

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

4.1 Authority and Enforceability. Borrower is duly organized, validly existing, and in good standing under the laws of its state of formation, has full power and authority to execute and deliver this Mortgage, and this Mortgage constitutes a legal, valid, and binding obligation enforceable against Borrower in accordance with its terms.

4.2 Title. Borrower holds fee simple title to the Real Property, free of all liens, encumbrances, and claims except those permitted under the Credit Agreement and those set forth on Schedule 4.2 hereto.

4.3 Compliance. The Property and its present use comply in all material respects with all applicable laws, including zoning, building codes, and Environmental Laws.

4.4 No Litigation. Except as disclosed on Schedule 4.4, there is no litigation, arbitration, or administrative proceeding pending or, to Borrower’s knowledge, threatened against Borrower or the Property that could reasonably be expected to impair Borrower’s ability to perform its obligations hereunder or under the Credit Agreement.

4.5 Financial Statements. All financial statements delivered to Lender are true, correct, and complete in all material respects and fairly present the financial condition of Borrower as of the dates thereof.

4.6 Survival. All representations and warranties shall survive the execution and delivery of this Mortgage and any transfer by Lender of its interest herein.

5. COVENANTS & RESTRICTIONS

Borrower covenants and agrees that until the Secured Debt is paid in full and this Mortgage is released:

5.1 Payment and Performance. Borrower shall promptly pay and perform the Secured Debt as and when due.

5.2 Maintenance of Property. Borrower shall keep the Property in good repair, free from waste, and in compliance with all laws.

5.3 Impositions. Borrower shall pay all Impositions before delinquency, subject to Borrower’s right to contest in good faith with adequate reserves.

5.4 Insurance. Borrower shall maintain insurance as required by the Credit Agreement and, at a minimum, (a) property insurance against all risk of loss in an amount not less than the full replacement cost of the Improvements, and (b) commercial general liability insurance with limits acceptable to Lender. Policies shall (i) name Lender as mortgagee and loss payee, (ii) provide at least 30 days’ prior written notice of cancellation to Lender, and (iii) be otherwise satisfactory to Lender.

5.5 Transfers and Encumbrances. Borrower shall not, without Lender’s prior written consent, sell, transfer, lease (other than Permitted Leases), or further encumber the Property, except as permitted under the Credit Agreement.

5.6 Books and Records; Inspection. Borrower shall maintain complete and accurate books and records and permit Lender and its agents, upon reasonable notice, to inspect the Property and such records.

5.7 Further Assurances. Borrower shall, upon Lender’s request, execute, acknowledge, and deliver further instruments and documents, and take such other actions, as Lender deems necessary or advisable to perfect, continue, or evidence the lien of this Mortgage.

5.8 Notice and Cure. Borrower shall promptly (a) provide written notice to Lender of any Event of Default, material casualty, condemnation, or legal proceeding affecting the Property, and (b) upon request, update all representations and warranties made herein.

6. DEFAULT & REMEDIES

6.1 Events of Default

Each of the following constitutes an “Event of Default”:

a. Borrower’s failure to pay any portion of the Secured Debt when due;

b. Borrower’s breach of any covenant, condition, or agreement contained herein, in the Credit Agreement, or in any other Loan Document and such breach continues beyond any applicable notice and cure period;

c. Any representation or warranty made by Borrower proves materially false or misleading when made;

d. The occurrence of any “Event of Default” under the Credit Agreement or any other Loan Document;

e. Borrower’s insolvency, assignment for the benefit of creditors, or the commencement of any bankruptcy or similar proceeding by or against Borrower; or

f. Failure of Borrower to maintain required insurance coverage.

6.2 Notice and Cure

Except for payment defaults (which shall have no cure period unless mandated by law), Borrower shall have [10–30] days after receipt of written notice from Lender to cure any non-monetary default, provided that if such default cannot reasonably be cured within such period, Borrower shall have an additional [60] days so long as it commences cure within the initial period and diligently pursues completion.

6.3 Remedies

Upon an Event of Default and expiration of any applicable cure period, Lender may, at its option and without further notice except as required by law:

1. Declare the entire unpaid Secured Debt immediately due and payable;

2. Commence a judicial foreclosure action by writ of scire facias sur mortgage in the Superior Court of the Delaware county in which the Property is situated, obtain judgment, and cause the Property to be sold by the sheriff at public auction in accordance with 10 Del. C. § 5061 et seq. and the Superior Court Civil Rules;

3. Enter into and take possession of the Property, collect Rents, and manage the Property without taking possession if permitted by law;

4. Seek appointment of a receiver for the Property;

5. Exercise all rights with respect to the Personal Property and Fixtures, including self-help remedies and disposition under Article 9 of the UCC, or proceed with respect to the Fixtures in accordance with Delaware real property law, as permitted by 6 Del. C. § 9-604; and

6. Exercise any and all other rights and remedies available at law, in equity, or under the Loan Documents.

Borrower shall pay to Lender all costs of collection and enforcement, including reasonable attorneys’ fees and costs (“Attorneys’ Fees”).

6.4 Foreclosure Procedures; Right of Redemption; Deficiency

a. Delaware is a judicial foreclosure jurisdiction. Foreclosure of this Mortgage is effected by an action styled scire facias sur mortgage, brought in the Superior Court of the county in which the Property is situated pursuant to 10 Del. C. § 5061 et seq., under which the sheriff is directed to make known to Borrower and other statutorily required parties that they must appear and show cause why the Property should not be seized and sold to satisfy the Secured Debt. If the Property is Borrower's owner-occupied 1- to 4-family primary residence, the action is also subject to Delaware's pre-suit notice-of-intent-to-foreclose, loss-mitigation-affidavit, and Automatic Residential Mortgage Foreclosure Mediation Program requirements under 10 Del. C. §§ 5062A-5062D.

b. Following entry of judgment, the Property is sold by the sheriff at public auction. Delaware does not provide a statutory post-sale right of redemption running for a fixed period after confirmation of the sheriff's sale. Before confirmation, Borrower may seek to redeem by paying the secured debt, accrued interest, and allowable costs, rather than merely the auction price. Borrower may also object to confirmation or seek to set aside the sale on a ground recognized by the court. Under 10 Del. C. §§ 5065–5066, confirmation and conveyance discharge the mortgagor's equity of redemption. This Agreement does not waive any right or relief that survives under applicable law or court order.

c. A scire facias foreclosure judgment enforces the Mortgage against the Property; it does not by itself impose personal liability for an unpaid balance. If the Loan Documents and applicable law permit personal recovery, Lender may seek judgment on the Note through a separately pleaded claim in the foreclosure action or a separate action. Any recovery on the Note must credit the proceeds of a confirmed sale and remains subject to Borrower's available defenses.

7. RISK ALLOCATION

7.1 Indemnification by Borrower

Borrower shall indemnify, defend, and hold harmless Lender, its Affiliates, and their respective officers, directors, employees, and agents (collectively, “Indemnitees”) from and against any and all claims, damages, losses, liabilities, penalties, fines, costs, and expenses (including Attorneys’ Fees) arising out of or related to: (a) ownership, operation, or use of the Property; (b) breach of any representation, warranty, covenant, or agreement of Borrower; (c) violation of any law, including Environmental Laws; and (d) any bodily injury, death, or property damage occurring on or about the Property, except to the extent caused by the gross negligence or willful misconduct of an Indemnitee.

7.2 Limitation of Liability

Notwithstanding anything to the contrary, Lender’s aggregate liability under this Mortgage and the other Loan Documents shall not exceed the Secured Debt amount actually received by Lender. In no event shall either party be liable to the other for any punitive, exemplary, or consequential damages.

7.3 Insurance Proceeds and Condemnation Awards

All insurance proceeds and condemnation awards shall be applied in accordance with the Credit Agreement.

7.4 Force Majeure

Performance by Borrower (other than payment obligations) shall be excused during periods of delay due to acts of God, war, terrorism, riot, governmental restrictions, or other causes beyond Borrower’s reasonable control, provided Borrower gives prompt written notice to Lender and resumes performance as soon as practicable.

8. DISPUTE RESOLUTION

8.1 Governing Law. This Mortgage and the Secured Debt shall be governed by and construed in accordance with the laws of the State of Delaware, without regard to conflict-of-laws principles.

8.2 Forum Selection. Borrower irrevocably submits to the exclusive jurisdiction of the Superior Court of the State of Delaware in and for [COUNTY] County for the purpose of any action or proceeding arising out of or relating to this Mortgage or the Secured Debt, including any Foreclosure action, which under Delaware law must be brought in the Superior Court of the county in which the Property is situated.

8.3 Arbitration Excluded. The parties expressly agree not to submit any dispute arising hereunder to arbitration.

8.4 Jury Trial Waiver. To the fullest extent permitted by applicable law, each party hereby waives trial by jury in any action or proceeding related to this Mortgage.

8.5 Injunctive Relief. Nothing herein shall limit Lender’s right to seek and obtain provisional or injunctive relief, including Foreclosure or appointment of a receiver, from any court of competent jurisdiction.

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 rights and interests under this Mortgage without Borrower’s consent. Borrower may not assign its rights or delegate its duties without Lender’s prior written consent.

9.3 Successors and Assigns. This Mortgage shall bind and benefit the parties hereto and their respective heirs, personal representatives, successors, and permitted 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 uphold the parties’ intent.

9.5 Integration. This Mortgage, the Credit Agreement, and the other Loan Documents constitute the entire agreement of the parties with respect to the subject matter hereof and supersede all prior oral or written agreements.

9.6 Counterparts; Electronic Signatures. This Mortgage may be executed in any number of counterparts, each of which constitutes an original, and all of which together constitute one instrument. Signatures delivered by facsimile, PDF, or other electronic means shall be deemed original signatures.

9.7 Notices. All notices required or permitted shall be in writing and delivered in accordance with the notice provisions of the Credit Agreement.

9.8 Recording. Borrower authorizes Lender to record this Mortgage and any related documents in the appropriate land records of the County. Borrower shall pay all recording taxes, fees, and charges.

9.9 Release. Upon payment in full of the Secured Debt and satisfaction of all obligations, Lender shall, at Borrower’s request and expense, execute and deliver a satisfaction or release of this Mortgage.

10. EXECUTION BLOCK

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

MORTGAGOR:
[BORROWER LEGAL NAME]
By: ________________________________
Name: ______________________________
Title: _______________________________
Date: _______________________________

MORTGAGEE:
[LENDER LEGAL NAME]
By: ________________________________
Name: ______________________________
Title: _______________________________
Date: _______________________________

11. NOTARY ACKNOWLEDGMENT

State of Delaware )
County of [COUNTY] ) ss.:

On this ____ day of __________, 20__, before me, the undersigned Notary Public in and for said State, personally appeared [NAME(S) OF SIGNATORY(IES)], who acknowledged themselves to be the [TITLE(S)] of [BORROWER LEGAL NAME], and that they executed the foregoing instrument for the purposes therein contained, as their free act and deed and the free act and deed of said entity.

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

____________________________________
Notary Public

My Commission Expires: _____________

Exhibit A – Legal Description of Real Property

[INSERT FULL AND ACCURATE LEGAL DESCRIPTION]

END OF DOCUMENT