MORTGAGE AGREEMENT
(Indiana – Real Property)
[// GUIDANCE: This instrument is intended for use in Indiana to secure a promissory note or other indebtedness with an interest in real property. Adapt all bracketed placeholders and optional provisions to the particulars of your transaction, title report, and lender requirements.]
TABLE OF CONTENTS
- Document Header
- Definitions
- Grant of Mortgage & Secured Obligations
- Representations & Warranties of Borrower
- Covenants of Borrower
- Taxes, Insurance, and Impounds
- Events of Default
- Remedies Upon Default
- Risk Allocation
- Dispute Resolution
- General Provisions
- Execution & Acknowledgment
1. DOCUMENT HEADER
1.1 Parties
This Mortgage Agreement (this “Mortgage”) is made effective as of [EFFECTIVE DATE] (the “Effective Date”) by and between:
a. [LENDER NAME], a [STATE OF ORGANIZATION] [ENTITY TYPE] (together with its successors and assigns, “Lender”); and
b. [BORROWER NAME], a [STATE OF ORGANIZATION] [ENTITY TYPE] or individual with an address at [BORROWER ADDRESS] (“Borrower”).
1.2 Recitals
A. Borrower is indebted to Lender under that certain Promissory Note dated as of the Effective Date (as amended, renewed, or restated, the “Note”) in the principal amount of $[PRINCIPAL AMOUNT] (the “Loan”).
B. As a condition to the Loan, Lender requires that Borrower grant to Lender a mortgage lien on the Property (defined below) as security for the Secured Obligations (defined below).
C. Borrower is willing to grant such mortgage on the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual covenants herein and other 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 capitalized terms have the meanings set forth below. Undefined capitalized terms shall have the meanings assigned in the Note. Section references are to this Mortgage unless otherwise indicated.
“Affiliate” – any Person controlling, controlled by, or under common control with another Person.
“Applicable Law” – all federal, state (including Indiana), and local laws, statutes, ordinances, regulations, and common-law principles governing or affecting this Mortgage, the Property, the Loan, or any party’s rights or obligations.
“Collateral” – collectively, the Property, the Rents, and the Personal Property.
“Default Rate” – the per-annum rate specified in the Note to accrue on the Secured Obligations upon an Event of Default.
“Event of Default” – any event described in Section 7.1.
“Impositions” – all taxes, assessments, water and sewer rents, fees, levies, and other governmental charges against the Property.
“Personal Property” – all fixtures, furniture, machinery, equipment, building materials, and other personal property now or hereafter located on, affixed to, used in connection with, or intended for use in connection with the Property, together with all replacements, substitutions, and additions thereto.
“Property” – the real property described in Exhibit A attached hereto, together with all improvements, easements, hereditaments, and appurtenances now or hereafter pertaining thereto.
“Rents” – all present and future rents, issues, profits, royalties, and income of the Property.
“Right of Redemption” – Borrower’s statutory and equitable rights, if any, to redeem the Property prior to the judicial foreclosure sale in accordance with Applicable Law.
“Secured Obligations” – (i) the principal, interest, fees, costs, and other amounts payable under the Note; (ii) all obligations under this Mortgage and any other Loan Documents; and (iii) all renewals, extensions, modifications, or replacements of the foregoing.
3. GRANT OF MORTGAGE & SECURED OBLIGATIONS
3.1 Grant
Borrower, in consideration of the Loan and intending to be legally bound, hereby irrevocably grants, bargains, sells, conveys, mortgages, pledges, assigns, and warrants to Lender, with power of sale to the extent permitted by Applicable Law, the Collateral, to secure the full and prompt payment and performance of the Secured Obligations.
3.2 Fixture Filing
This Mortgage constitutes a financing statement filed as a fixture filing under Article 9 of the Uniform Commercial Code as adopted in Indiana with respect to any portion of the Personal Property that may be deemed fixtures.
[// GUIDANCE: Verify with title company whether a separate UCC fixture filing is required in the county of the Property.]
4. REPRESENTATIONS & WARRANTIES OF BORROWER
Borrower represents and warrants to Lender as of the Effective Date and continuing until the Secured Obligations are paid in full:
4.1 Organization & Authority – Borrower is duly organized, validly existing, and in good standing under the laws of its state of organization and qualified to do business in Indiana if required. Borrower has full power and authority to execute, deliver, and perform this Mortgage and the other Loan Documents.
4.2 Title – Borrower lawfully owns the Property in fee simple, free and clear of all liens and encumbrances except those (a) of record and approved in writing by Lender or (b) created by the Loan Documents.
4.3 No Conflicts – The execution, delivery, and performance of this Mortgage do not and will not (i) violate Borrower’s organizational documents, (ii) breach or default any agreement binding on Borrower or the Property, or (iii) violate Applicable Law.
4.4 Compliance – The Property and its current use comply in all material respects with Applicable Law, including zoning, building codes, and environmental regulations.
4.5 Litigation – No litigation or administrative proceeding is pending or, to Borrower’s knowledge, threatened that could adversely affect Borrower, the Property, or the Loan.
4.6 Financial Information – All financial statements delivered to Lender were prepared in accordance with generally accepted accounting principles and fairly present Borrower’s financial condition.
4.7 Environmental – Borrower has not received notice of, and has no knowledge of, any material violation of environmental laws or releases of hazardous substances on the Property.
4.8 Survival – The representations and warranties in this Section 4 shall survive the execution and delivery of this Mortgage and any foreclosure or transfer of the Property.
5. COVENANTS OF BORROWER
Borrower covenants and agrees that until the Secured Obligations are paid in full and the lien of this Mortgage is released:
5.1 Payment & Performance – Borrower shall timely pay and perform all Secured Obligations.
5.2 Preservation of Collateral – Borrower shall (i) keep the Property in good repair, (ii) make all necessary or appropriate capital improvements, and (iii) prevent waste or impairment of the Property.
5.3 Impositions – Borrower shall pay all Impositions before delinquency. Lender may require Borrower to deposit monthly escrow amounts sufficient to pay Impositions and insurance premiums.
5.4 Insurance – Borrower shall maintain insurance on the Property (including casualty, liability, and flood insurance if applicable) with financially sound insurers in amounts and coverages satisfactory to Lender, naming Lender as mortgagee and loss payee.
5.5 Taxes on Loan – Borrower shall pay all taxes imposed on the Loan or the Mortgage, excluding taxes on Lender’s net income.
5.6 Compliance with Law – Borrower shall comply with all Applicable Law affecting Borrower or the Property and shall promptly cure any violation.
5.7 Transfers & Liens – Without Lender’s prior written consent, Borrower shall not (i) sell, convey, lease (except bona fide arm’s-length leases in the ordinary course), transfer, or encumber the Property; (ii) create or permit any junior liens; or (iii) transfer majority ownership or control of Borrower.
5.8 Books & Records; Inspection – Borrower shall keep accurate books and permit Lender, upon reasonable notice, to inspect the Property and Borrower’s records.
5.9 Further Assurances – Borrower shall execute and deliver such further instruments as Lender may reasonably request to carry out the intent of the Loan Documents.
6. TAXES, INSURANCE, AND IMPOUNDS
6.1 Escrow Account – Upon notice from Lender, Borrower shall deposit with Lender on each payment date under the Note a sum equal to one-twelfth (1/12) of the annual Impositions and insurance premiums as estimated by Lender.
6.2 Application – Lender shall apply escrowed funds to the payment of Impositions and insurance premiums before delinquency. Any excess or deficiency shall be handled pursuant to Lender’s standard escrow procedures.
6.3 Lender Advances – If Borrower fails to maintain insurance or pay Impositions, Lender may advance amounts necessary to protect its interest, which advances shall be Secured Obligations bearing interest at the Default Rate.
7. EVENTS OF DEFAULT
7.1 Events – Each of the following shall constitute an “Event of Default”:
a. Monetary Default – Failure to pay any amount under the Note or this Mortgage when due, subject to any grace period expressly provided in the Note.
b. Covenant Default – Failure to perform any non-monetary covenant or obligation within thirty (30) days after written notice (or such longer period as Lender may approve, provided Borrower commences and diligently pursues cure).
c. Misrepresentation – Any material representation or warranty is false or misleading in any material respect.
d. Insolvency – Borrower (i) is the subject of voluntary or involuntary bankruptcy or receivership, or (ii) makes an assignment for the benefit of creditors.
e. Attachment/Condemnation – The Property is subjected to attachment, levy, or condemnation that materially impairs its value and Borrower fails to diligently contest or resolve the same.
7.2 Automatic Acceleration – Upon an Event of Default, Lender may declare the Secured Obligations immediately due and payable without presentment, demand, or notice.
8. REMEDIES UPON DEFAULT
8.1 Judicial Foreclosure – Lender may institute proceedings in an Indiana state court of competent jurisdiction to foreclose this Mortgage in accordance with Applicable Law.
8.2 Receivership – Lender shall be entitled to appointment of a receiver for the Property without notice or bond to the extent permitted by law.
8.3 Possession & Rents – Lender may, personally or through a receiver, (i) enter, take possession of, manage, and operate the Property, and (ii) collect and apply Rents to the Secured Obligations.
8.4 Sale of Property – Following judgment of foreclosure, the Property may be sold at sheriff’s sale. Lender or its nominee may bid, in cash or by credit against the Secured Obligations.
8.5 Right of Redemption – Borrower may redeem the Property at any time prior to the foreclosure sale by paying all amounts required by Applicable Law, including costs and interest at the Default Rate.
8.6 Deficiency Judgment – To the extent permitted by Indiana law, if proceeds of any foreclosure sale are insufficient to satisfy the Secured Obligations, Lender may seek a deficiency judgment for the remaining balance; provided that the amount of any deficiency shall be limited to the Secured Debt Amount and subject to fair-value defenses available under Applicable Law.
8.7 Additional Remedies – Lender may exercise any other right or remedy available at law, in equity, or under the Loan Documents, all of which shall be cumulative and not exclusive.
8.8 Application of Proceeds – Proceeds from foreclosure or any disposition of Collateral shall be applied: (i) first, to costs of foreclosure, sale, and receivership (including attorney fees); (ii) second, to accrued interest; (iii) third, to principal; (iv) fourth, to any other Secured Obligations; and (v) fifth, any surplus to the party lawfully entitled thereto.
9. RISK ALLOCATION
9.1 Indemnification by Borrower – Borrower shall indemnify, defend, and hold harmless Lender and its Affiliates, and their respective officers, directors, employees, and agents (each, an “Indemnified Party”) from and against any and all claims, liabilities, losses, damages, costs, and expenses (including reasonable attorney fees) arising out of or relating to (i) the Loan, this Mortgage, or the Property, (ii) environmental conditions or violations, (iii) Borrower’s breach of any representation, warranty, or covenant, or (iv) bodily injury or property damage on or about the Property, except to the extent caused by the gross negligence or willful misconduct of an Indemnified Party.
9.2 Limitation of Liability – Lender’s liability to Borrower for any claim arising under this Mortgage or the Loan shall in no event exceed the Secured Debt Amount. Neither party shall be liable for any special, consequential, punitive, or exemplary damages, except as expressly required by Applicable Law.
9.3 Insurance – Borrower’s insurance policies shall (i) name Lender as additional insured (liability) and mortgagee/loss payee (property), (ii) provide at least thirty (30) days’ prior written notice of cancellation or material change, and (iii) be written by insurers rated “A-” or better by A.M. Best.
9.4 Force Majeure – Borrower’s non-monetary obligations shall be excused during, and extended for a period equal to, any delay caused by acts of God, governmental action, or other events beyond Borrower’s reasonable control; provided that Borrower gives Lender prompt notice and diligently seeks to remedy such delay.
10. DISPUTE RESOLUTION
10.1 Governing Law – This Mortgage and the Secured Obligations shall be governed by the laws of the State of Indiana, without regard to conflict-of-laws principles that would result in the application of any other law.
10.2 Forum Selection – Borrower irrevocably submits to the exclusive jurisdiction of the state courts located in the county where the Property is situated (and, if jurisdiction is appropriate, to the corresponding federal courts sitting in Indiana) for the adjudication of any dispute arising under or relating to this Mortgage or the Loan.
10.3 Arbitration – Arbitration is expressly excluded. Any controversy or claim shall be resolved solely by the courts identified in Section 10.2.
10.4 Jury Trial Waiver – [OPTION 1 – INCLUDE IF ENFORCEABLE: EACH PARTY KNOWINGLY AND VOLUNTARILY WAIVES ITS RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS MORTGAGE, THE NOTE, OR ANY OTHER LOAN DOCUMENT.]
[OPTION 2 – OMIT IF NOT ENFORCEABLE.]
10.5 Injunctive & Foreclosure Relief – Nothing in this Section 10 shall limit Lender’s right to seek (i) injunctive or equitable relief, (ii) foreclosure of this Mortgage, (iii) appointment of a receiver, or (iv) any other provisional remedy.
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. No waiver shall constitute a waiver of any other or subsequent breach.
11.2 Assignment – Lender may assign or participate its interest in the Loan and this Mortgage without notice to Borrower. Borrower shall not assign its rights or delegate its obligations without Lender’s prior written consent.
11.3 Successors & Assigns – This Mortgage binds and inures to the benefit of the parties and their respective successors and permitted assigns.
11.4 Severability – If any provision is held invalid or unenforceable, the remaining provisions shall remain in full force, and the invalid provision shall be reformed to the minimum extent necessary to render it enforceable.
11.5 Integration – The Loan Documents collectively constitute the entire agreement of the parties with respect to the subject matter and supersede all prior understandings.
11.6 Notices – All notices shall be in writing and deemed given (i) when delivered personally, (ii) when sent by nationally recognized overnight courier, or (iii) three (3) business days after being mailed by certified U.S. mail, return receipt requested, postage prepaid, to the addresses set forth below (or such other addresses as either party may designate by notice).
11.7 Counterparts; Electronic Signatures – This Mortgage may be executed in counterparts (including by electronic or scanned signatures), each of which shall constitute an original and all of which together shall constitute one instrument. Electronic signatures shall be deemed originals for all purposes.
11.8 Recording – Borrower shall pay all costs of recording this Mortgage and any related financing statements and shall cause this Mortgage to be promptly recorded in the official records of the county where the Property is located.
11.9 Time of Essence – Time is of the essence with respect to all obligations under this Mortgage.
12. EXECUTION & ACKNOWLEDGMENT
IN WITNESS WHEREOF, Borrower has executed this Mortgage as of the Effective Date.
BORROWER:
[____]
By: ____
Name: ____
Title (if applicable): ______
State of __ )
County of __ ) ss:
On this ___ day of _, 20_, before me, the undersigned, a Notary Public in and for said County and State, personally appeared ________, who acknowledged the execution of the foregoing Mortgage for and on behalf of [BORROWER NAME].
Notary Public Signature: _____
Printed Name: _____
My Commission Expires: _____
Resident County: _____
[Seal]
LENDER:
[____]
By: ____
Name: ____
Title: ________
[// GUIDANCE: Depending on lender type, additional corporate authority certificates or board resolutions may be required.]
EXHIBIT A
Legal Description of Property
[INSERT FULL LEGAL DESCRIPTION AS PROVIDED BY SURVEY OR TITLE COMMITMENT]
[// GUIDANCE: After execution, record this Mortgage in the recorder’s office of the Indiana county where the Property is located. Verify that document meets formatting, margin, and font requirements for recording (e.g., 2" top margin on first page, ½" margins elsewhere, 10-point minimum type).]