MORTGAGE AND SECURITY AGREEMENT
(Georgia — Non-Judicial Power-of-Sale Instrument)
[// GUIDANCE: This template is drafted for use in Georgia, a title-theory, non-judicial foreclosure state that customarily employs a “Deed to Secure Debt.” Because many national lending programs reference a “Mortgage,” the instrument below blends traditional mortgage terminology with the Georgia power-of-sale framework. Always confirm with local counsel that a security deed is not required for your particular transaction.]
TABLE OF CONTENTS
- Document Header
- Definitions
- Grant of Lien and Security Interest
- Obligations Secured; Payment Terms
- Representations and Warranties
- Covenants
- Events of Default
- Remedies; Foreclosure Procedures
- Risk Allocation
- Dispute Resolution; Governing Law
- General Provisions
- Execution Block
1. DOCUMENT HEADER
This Mortgage and Security Agreement (“Mortgage”) is made and entered into as of [EFFECTIVE DATE] (the “Effective Date”), by and between:
• [BORROWER LEGAL NAME], a [ENTITY TYPE & JURISDICTION] (“Borrower”), whose address is [BORROWER NOTICE ADDRESS]; and
• [LENDER LEGAL NAME], a [ENTITY TYPE & JURISDICTION] (“Lender”), whose address is [LENDER NOTICE ADDRESS].
RECITALS
A. Borrower is indebted to Lender pursuant to that certain Promissory Note dated of even date herewith in the original principal amount of $[PRINCIPAL AMOUNT] (as amended, restated, renewed, or replaced, the “Note”).
B. To secure the payment and performance of the Note and all other Secured Obligations (defined below), Borrower desires to grant to Lender a first-priority security interest in the real property described herein, together with all improvements, fixtures, and appurtenances thereto (collectively, the “Property”).
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Borrower and Lender agree as follows:
2. DEFINITIONS
Unless the context requires otherwise, the following capitalized terms shall have the meanings set forth below. References to “Articles” and “Sections” are to this Mortgage. Terms defined in the Uniform Commercial Code as adopted in Georgia (the “UCC”) shall have the meanings set forth therein unless otherwise defined herein.
“Acceleration” means the declaration by Lender that the entire unpaid balance of the Secured Obligations is immediately due and payable.
“Borrower” has the meaning given in the Document Header and includes any successor to or assignee of Borrower permitted hereunder.
“Code” means the Internal Revenue Code of 1986, as amended.
“Default Rate” means the lesser of (a) [DEFAULT INTEREST RATE]% per annum, or (b) the maximum rate permitted by applicable law.
“Event of Default” has the meaning set forth in Article 7.
“Impositions” means all real property taxes, assessments (special or otherwise), water and sewer rents, and other governmental charges with respect to the Property.
“Permitted Encumbrances” means (a) liens for current Impositions not yet due and payable, (b) easements, covenants, and restrictions of record that do not materially impair the use or value of the Property, and (c) those matters listed on Schedule A attached hereto.
“Property” means the real estate located in the County of [COUNTY], State of Georgia, more particularly described on Exhibit A attached hereto, together with (i) all buildings and improvements now or hereafter located thereon, (ii) all fixtures, machinery, equipment, and building materials now or hereafter affixed thereto, (iii) all leases, rents, issues, and profits therefrom, (iv) all accessions, replacements, and proceeds of the foregoing, and (v) all estates, rights, tenements, hereditaments, and appurtenances thereunto belonging or in any way appertaining.
“Right of Redemption” means Borrower’s statutory right to satisfy the Secured Obligations and reclaim the Property at any time prior to the consummation of a foreclosure sale. [// GUIDANCE: Georgia affords no post-sale statutory redemption in a mortgage foreclosure; see O.C.G.A. § 44-14-162.2.]
“Secured Obligations” means (a) all indebtedness evidenced by the Note, (b) all obligations under this Mortgage, (c) all future advances made by Lender to or for the benefit of Borrower, and (d) all renewals, extensions, modifications, and replacements of any of the foregoing.
“UCC” has the meaning set forth above.
3. GRANT OF LIEN AND SECURITY INTEREST
3.1 Grant. Borrower hereby irrevocably grants, bargains, sells, conveys, assigns, transfers, and sets over unto Lender, with power of sale, the Property, subject only to Permitted Encumbrances, to secure the prompt payment and performance of the Secured Obligations.
3.2 Fixture Filing. This Mortgage constitutes a “fixture filing” under Article 9 of the UCC and covers goods that are or are to become fixtures on the Property.
3.3 Future Advances. Pursuant to O.C.G.A. § 44-14-80, this Mortgage shall secure future advances up to the maximum principal amount of $[MAXIMUM SECURED AMOUNT], whether such advances are obligatory or discretionary.
4. OBLIGATIONS SECURED; PAYMENT TERMS
4.1 Incorporation of Note. The Note is hereby incorporated by reference as though fully set forth herein.
4.2 Payment. Borrower shall pay the Secured Obligations when due, without offset or counterclaim, in lawful money of the United States.
4.3 Interest; Default Rate. Interest shall accrue on the outstanding principal balance of the Note at the rate specified therein. Upon an Event of Default, interest shall accrue at the Default Rate.
4.4 Impositions and Escrows. Borrower shall pay all Impositions before delinquency and, at Lender’s option upon thirty (30) days’ notice, shall deposit with Lender monthly escrows in an amount reasonably estimated to pay the next due Impositions and insurance premiums.
4.5 Prepayment. [PREPAYMENT TERMS / PREMIUMS].
5. REPRESENTATIONS AND WARRANTIES
Borrower represents and warrants to Lender as of the Effective Date and continuing thereafter:
5.1 Organization; Authority. Borrower is duly organized, validly existing, and in good standing under the laws of its jurisdiction of formation and has full power and authority to execute and perform this Mortgage.
5.2 Title. Borrower is seized of indefeasible fee simple title to the Property, free of all liens and encumbrances except Permitted Encumbrances.
5.3 Enforceability. This Mortgage constitutes a legal, valid, and binding obligation of Borrower, enforceable in accordance with its terms.
5.4 Compliance. The Property is in material compliance with all applicable laws, ordinances, and regulations, including building, zoning, environmental, and health and safety laws.
5.5 Environmental. To Borrower’s knowledge, there are no hazardous substances on, in, or under the Property in violation of applicable environmental laws.
5.6 Financial Statements. All financial statements heretofore delivered to Lender are true, complete, and fairly present Borrower’s financial condition.
5.7 Survival. The representations and warranties in this Article 5 shall survive the recordation of this Mortgage and any foreclosure thereof.
6. COVENANTS
6.1 Payment and Performance. Borrower shall timely pay and perform all Secured Obligations.
6.2 Preservation of Property. Borrower shall keep the Property in good order and repair and shall not commit waste. Borrower shall promptly comply with all governmental requirements affecting the Property.
6.3 Insurance. Borrower shall maintain (a) all-risk property insurance on a replacement-cost basis, (b) commercial general liability insurance (if applicable), and (c) such other insurance as Lender may reasonably require, all from insurers and in amounts satisfactory to Lender. Policies shall name Lender as mortgagee and loss payee pursuant to a standard mortgagee clause.
6.4 Transfers; Encumbrances. Except with Lender’s prior written consent, Borrower shall not (a) sell or transfer any interest in the Property, (b) grant additional liens on the Property, or (c) permit any encumbrance other than Permitted Encumbrances. Any prohibited transfer shall constitute an Event of Default.
6.5 Books and Records; Inspection. Borrower shall keep accurate books and records and permit Lender or its agents, upon reasonable notice, to inspect the Property and such books and records.
6.6 Indemnification. Borrower shall indemnify, defend, and hold Lender harmless from and against all losses, liabilities, claims, and expenses (including reasonable attorneys’ fees) arising out of or relating to (a) the Secured Obligations, (b) the ownership, operation, or condition of the Property, or (c) any breach of Borrower’s representations, warranties, or covenants herein. [// GUIDANCE: This satisfies the metadata requirement “borrower_obligations.”]
6.7 Further Assurances. Borrower shall execute and deliver such additional documents and instruments as Lender may reasonably request to perfect and continue the lien and security interest herein granted.
7. EVENTS OF DEFAULT
Each of the following constitutes an “Event of Default”:
a. Failure to pay any installment of principal, interest, or other amount due under the Note or this Mortgage within [5] days after the same becomes due;
b. Breach of any covenant, representation, or warranty contained in this Mortgage, the Note, or any other loan document, which breach is not cured within [30] days after notice from Lender;
c. Insolvency or bankruptcy of Borrower or commencement of any proceeding under any bankruptcy or insolvency law by or against Borrower;
d. Any prohibited transfer or encumbrance of the Property;
e. Entry of any judgment against Borrower or the Property that is not discharged, bonded, or stayed within [30] days.
8. REMEDIES; FORECLOSURE PROCEDURES
8.1 Acceleration. Upon an Event of Default, Lender may declare the Secured Obligations immediately due and payable without notice or demand, except as expressly required by applicable law.
8.2 Power of Sale. Georgia Non-Judicial Foreclosure. Subject to O.C.G.A. §§ 44-14-162 through 162.4, Lender may foreclose the lien of this Mortgage by advertisement and sale of the Property at public outcry to the highest bidder for cash after:
i. Recording of this Mortgage;
ii. Giving Borrower at least thirty (30) days’ written notice of Lender’s intent to foreclose; and
iii. Advertising the sale once a week for four (4) consecutive weeks in the official newspaper of the county where the Property is located.
8.3 Application of Proceeds. Foreclosure proceeds shall be applied in the following order: (a) costs and expenses of sale (including Lender’s reasonable attorneys’ fees and trustee/auctioneer fees), (b) unpaid interest, (c) unpaid principal, (d) other Secured Obligations, and (e) any surplus to the person legally entitled thereto.
8.4 Right of Redemption. Borrower may redeem the Property at any time prior to the foreclosure sale by paying the Secured Obligations in full, together with Lender’s incurred costs and expenses. Borrower acknowledges that Georgia law affords no statutory right of redemption after completion of the foreclosure sale.
8.5 Deficiency. Borrower shall remain liable for any deficiency remaining after application of foreclosure proceeds, subject to confirmation of the sale by a court of competent jurisdiction within thirty (30) days after the sale in accordance with O.C.G.A. § 44-14-161.
8.6 Appointment of Receiver. Upon an Event of Default, Lender may apply to any court of competent jurisdiction for the appointment of a receiver to collect rents and profits, and Borrower hereby consents to such appointment and waives notice and hearing to the extent permitted by law.
8.7 Preservation of Other Remedies. The remedies in this Article 8 are cumulative and in addition to all other rights and remedies provided by law or in equity, including injunctive relief, specific performance, and set-off.
9. RISK ALLOCATION
9.1 Indemnification. See Section 6.6.
9.2 Limitation of Liability. Lender’s total liability to Borrower under this Mortgage shall not exceed the then-outstanding principal balance of the Secured Obligations. In no event shall Lender be liable for consequential, special, or punitive damages. [// GUIDANCE: Implements “liability_caps: secured_debt_amount.”]
9.3 Force Majeure. No Party shall be liable for failure to perform its obligations (other than payment obligations) when such failure is due to causes beyond its reasonable control, including acts of God, war, terrorism, pandemic, or governmental action; provided that the affected Party gives prompt notice and uses commercially reasonable efforts to resume performance.
9.4 Insurance Proceeds. Insurance proceeds received shall, at Lender’s option, be (a) applied to restoration of the Property, or (b) applied to the Secured Obligations, with any excess paid to Borrower. Until applied, such proceeds shall be held in trust for Lender.
10. DISPUTE RESOLUTION; GOVERNING LAW
10.1 Governing Law. This Mortgage, the Note, and the other loan documents shall be governed by, and construed in accordance with, the laws of the State of Georgia, without regard to its conflict-of-laws principles.
10.2 Forum Selection. Borrower irrevocably submits to the exclusive jurisdiction of the state courts located in [COUNTY] County, Georgia, and agrees that any action or proceeding arising out of or relating to the loan documents shall be brought only in such courts.
10.3 Waiver of Jury Trial. BORROWER AND LENDER HEREBY KNOWINGLY, VOLUNTARILY, AND INTENTIONALLY WAIVE ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS MORTGAGE OR THE TRANSACTIONS CONTEMPLATED HEREBY.
10.4 Arbitration Excluded. Nothing in this Mortgage or any other loan document shall be construed to require arbitration of any dispute.
10.5 Injunctive Relief. Borrower acknowledges that Lender’s foreclosure rights constitute unique and valuable remedies, and nothing herein shall limit Lender’s right to seek injunctive or declaratory relief to protect such remedies.
11. GENERAL PROVISIONS
11.1 Amendments; 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. Any waiver shall be limited to the specific instance and purpose for which given.
11.2 Assignment. Lender may assign or participate its interest in the Secured Obligations and this Mortgage without Borrower’s consent. Borrower may not assign its rights or delegate its duties without Lender’s prior written consent.
11.3 Successors and Assigns. This Mortgage shall bind Borrower and its successors and assigns and shall inure to the benefit of Lender and its successors and assigns.
11.4 Severability. If any provision of this Mortgage is held invalid or unenforceable, the remaining provisions shall remain in full force and effect, and the invalid or unenforceable provision shall be reformed to the maximum extent permitted to effectuate the Parties’ original intent.
11.5 Integration. The Note, this Mortgage, and the other loan documents collectively constitute the entire agreement between the Parties with respect to the subject matter hereof and supersede all prior or contemporaneous oral or written agreements.
11.6 Counterparts; Electronic Signatures. This Mortgage may be executed in multiple counterparts, each of which shall be deemed an original, and all of which together shall constitute one instrument. Signatures delivered by facsimile, e-mail, or other electronic means shall be deemed original signatures for all purposes.
11.7 Notices. All notices shall be in writing and shall be deemed given (a) when delivered in person, (b) one business day after being sent by nationally recognized overnight courier, or (c) three business days after being deposited in the United States mail, certified, return receipt requested, postage prepaid, addressed to the applicable Party at its notice address set forth above (or such other address as such Party may designate by notice).
12. EXECUTION BLOCK
IN WITNESS WHEREOF, Borrower has executed and delivered this Mortgage under seal as of the date first written above.
[// GUIDANCE: Georgia law generally requires the instrument to be executed under seal, attested by one witness, and notarized for recording.]
[BORROWER LEGAL NAME]
By: ____
Name: ____
Title: _______
(Seal)
Attest (Witness): ____
Name: _______
STATE OF GEORGIA
COUNTY OF ____
On this _ day of __, 20__, before me, the undersigned Notary Public, personally appeared ________, who executed the foregoing Mortgage in the capacity indicated, and acknowledged the same to be his/her free act and deed.
Notary Public
My commission expires: _______
[NOTARY SEAL]
EXHIBIT A
Legal Description of the Property
[INSERT FULL METES AND BOUNDS OR LOT AND BLOCK DESCRIPTION]
SCHEDULE A
Permitted Encumbrances
- [List of specific easements, covenants, restrictions]
- [Any taxes or assessments not yet due and payable]
[// GUIDANCE: After execution, record this instrument in the real estate records of the county where the Property is located to perfect the lien. Confirm recording fees and intangible tax (if any) under O.C.G.A. § 48-6-77.]