Mortgage Agreement

MORTGAGE AGREEMENT

(Kentucky – Judicial Foreclosure Jurisdiction)

TABLE OF CONTENTS

1. Document Header
2. Definitions
3. Granting Clause & Security Interest
4. Indebtedness and Payment Obligations
5. Representations and Warranties
6. Covenants
7. Insurance, Taxes, and Impounds
8. Events of Default
9. Remedies (Including Judicial Foreclosure)
10. Risk Allocation
11. Dispute Resolution
12. General Provisions
13. Execution Block
14. Notary Acknowledgment

1. DOCUMENT HEADER

This MORTGAGE AGREEMENT (this “Mortgage”) is entered into effective as of [EFFECTIVE DATE] (the “Effective Date”) by and between:

• Mortgagor: [BORROWER LEGAL NAME], a [STATE] [ENTITY TYPE], having an address at [ADDRESS] (“Mortgagor”); and
• Mortgagee: [LENDER LEGAL NAME], a [STATE] [BANK/CORPORATION], having an address at [ADDRESS] (“Mortgagee”).

Recitals
A. Mortgagee has made or agreed to make a loan (the “Loan”) to Mortgagor in the original principal amount of $[PRINCIPAL AMOUNT] evidenced by that certain Promissory Note dated [NOTE DATE] (as amended from time to time, the “Note”).
B. As a condition precedent to making the Loan, Mortgagee requires that Mortgagor grant a first-priority mortgage lien on the Property (defined below).
C. Mortgagor is willing to grant such lien to secure performance of all Obligations (defined below).

NOW, THEREFORE, in consideration of the Loan and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:

2. DEFINITIONS

Unless otherwise indicated, capitalized terms have the meanings set forth below:

“Approved Lease” – Any lease of all or any portion of the Property approved in writing by Mortgagee as required under Section 6.2(b).

“Collateral” – Collectively, the Property, Fixtures, Rents, and all other real and personal property interests described in Section 3.

“Environmental Laws” – Any and all federal, state, or local statutes, regulations, ordinances, rules, or common-law duties relating to the environment, hazardous substances, or human health and safety.

“Events of Default” – Any of the occurrences enumerated in Section 8.1.

“Fixtures” – All goods that are or are to become fixtures on or relating to the Property.

“Obligations” – All present and future indebtedness, liabilities, and covenants of Mortgagor to Mortgagee arising under the Loan Documents (including the Note and this Mortgage) plus interest, fees, costs, and expenses.

“Property” – The real property located at [PROPERTY ADDRESS] in the County of [COUNTY], Commonwealth of Kentucky, more particularly described on Exhibit A attached hereto (the “Land”), together with all buildings, improvements, easements, appurtenances, and hereditaments now or hereafter thereon or thereof.

“Rents” – All present and future rents, issues, profits, royalties, income, and other benefits derived from the Property.

[Add additional defined terms as needed.]

3. GRANTING CLAUSE & SECURITY INTEREST

3.1 Grant of Mortgage. To secure prompt payment and performance of the Obligations, Mortgagor hereby MORTGAGES, GRANTS, BARGAINS, SELLS, CONVEYS, ASSIGNS, and PLEDGES to Mortgagee, with mortgage covenants and warranty of title, the Collateral, SUBJECT, HOWEVER, to the Permitted Encumbrances (as defined in the Note or Schedule 1).

3.2 Assignment of Rents. Mortgagor absolutely and unconditionally assigns to Mortgagee all present and future Rents. Until the occurrence of an Event of Default, Mortgagee grants Mortgagor a revocable license to collect and use Rents. Upon an Event of Default, such license shall automatically terminate without notice.

3.3 Security Interest in Fixtures. This Mortgage constitutes a security agreement under the Uniform Commercial Code to the extent it covers any property that may be deemed personal property or fixtures. Mortgagor authorizes Mortgagee to file any financing statements or amendments deemed necessary by Mortgagee to perfect its security interest.

4. INDEBTEDNESS AND PAYMENT OBLIGATIONS

4.1 The Note. Mortgagor shall pay the principal, interest, late charges, and all other amounts due under the Note in accordance with its terms.

4.2 Protective Advances. Mortgagee may, but shall not be obligated to, pay any sums necessary to (i) protect the priority or validity of this Mortgage, (ii) prevent or cure a default by Mortgagor under any senior lien, or (iii) protect the Property from waste or impairment. All such sums shall be added to the principal balance of the Note, bear interest at the default rate, and be secured hereby.

4.3 Liability Cap. Consistent with the metadata directive, the aggregate liability of Mortgagor under indemnification or other monetary obligations herein shall not exceed the secured debt amount outstanding under the Note except for (a) fraud, (b) intentional waste, or (c) Environmental Liabilities, which shall remain unlimited.

5. REPRESENTATIONS AND WARRANTIES

Mortgagor represents and warrants to Mortgagee, as of the Effective Date and continuing thereafter:

5.1 Authority and Enforceability. Mortgagor has full power and authority to execute, deliver, and perform this Mortgage; this Mortgage constitutes a legal, valid, and binding obligation enforceable against Mortgagor in accordance with its terms.

5.2 Title. Mortgagor holds fee simple title to the Property free of liens and encumbrances other than the Permitted Encumbrances.

5.3 Compliance. The Property and its current use comply in all material respects with applicable zoning, building, and Environmental Laws.

5.4 Litigation. No litigation or proceeding is pending or, to Mortgagor’s knowledge, threatened that could materially impair Mortgagor’s ability to perform its Obligations.

5.5 Accuracy of Information. All information provided by Mortgagor to Mortgagee in connection with the Loan is true, correct, and complete in all material respects.

[Representations may be expanded as transaction requires.]

5.6 Survival. Each representation and warranty shall survive execution of this Mortgage and foreclosure or deed-in-lieu thereof.

6. COVENANTS

6.1 Affirmative Covenants. Mortgagor shall:
(a) Pay when due all principal, interest, and other amounts owed under the Note and this Mortgage;
(b) Promptly pay all real estate taxes and assessments and deliver paid receipts upon request;
(c) Maintain the Property in good condition, repair, and working order;
(d) Maintain insurance as required under Section 7;
(e) Comply with all applicable laws and ordinances affecting the Property; and
(f) Furnish Mortgagee, within 10 days of request, evidence of compliance with the foregoing.

6.2 Negative Covenants. Without Mortgagee’s prior written consent, Mortgagor shall not:
(a) Transfer, convey, or encumber any interest in the Collateral, except for Approved Leases and Permitted Encumbrances;
(b) Permit any lease of the Property other than an Approved Lease;
(c) Commit or permit waste; or
(d) Alter the zoning classification of the Property.

6.3 Notice; Cure. Mortgagor shall promptly (and in any event within five Business Days) notify Mortgagee in writing of any Event of Default or any event that with notice or lapse of time would constitute an Event of Default.

7. INSURANCE, TAXES, AND IMPOUNDS

7.1 Insurance Coverage. Mortgagor shall maintain at its expense:
• All-risk property insurance in an amount not less than 100% of full replacement cost;
• Commercial general liability insurance with limits of not less than $[LIMIT];
• Flood insurance if the Property is located in a designated flood zone; and
• Such other coverage as Mortgagee may reasonably require.

7.2 Policy Requirements. All insurance shall (a) name Mortgagee as mortgagee and loss payee, (b) provide for 30 days’ prior written notice to Mortgagee of cancellation or material change, and (c) be issued by insurers rated A- (VIII) or better by A.M. Best.

7.3 Escrow for Taxes and Insurance. If required by Mortgagee, Mortgagor shall deposit with Mortgagee monthly escrow payments equal to one-twelfth of annual taxes and insurance premiums. Escrowed amounts shall be applied to pay such items when due.

8. EVENTS OF DEFAULT

8.1 “Event of Default” means the occurrence of any one or more of the following:
(a) Monetary Default. Failure to pay any amount under the Note or this Mortgage within five days after its due date.
(b) Covenant Default. Failure to perform or observe any covenant or agreement herein and continuation for 30 days after written notice (10 days for insurance or tax violations).
(c) Misrepresentation. Any representation or warranty proves materially false or misleading.
(d) Insolvency. Mortgagor’s insolvency, bankruptcy, assignment for the benefit of creditors, or appointment of a receiver.
(e) Cross-Default. A default under any Loan Document not cured within applicable grace periods.

8.2 Kentucky Right of Redemption. Nothing herein shall impair any statutory or equitable right of redemption Mortgagor may have under Kentucky law. Mortgagor acknowledges that Kentucky law presently affords an equitable right of redemption until confirmation of a judicial foreclosure sale and, under limited circumstances, a post-sale statutory redemption period.

9. REMEDIES (INCLUDING JUDICIAL FORECLOSURE)

Upon the occurrence and during the continuance of any Event of Default, Mortgagee may, at its option and without prejudice to any other right or remedy provided herein or by law:

9.1 Acceleration. Declare the entire unpaid principal, accrued interest, and all other Obligations immediately due and payable.

9.2 Judicial Foreclosure. Commence an action in any Kentucky state court of competent jurisdiction to foreclose this Mortgage and sell the Property in accordance with Kentucky Rules of Civil Procedure and applicable statutes.

9.3 Appointment of Receiver. Seek appointment of a receiver to collect Rents, manage the Property, and protect the Collateral. Mortgagor hereby consents to such appointment without the necessity of showing irreparable harm.

9.4 Collection of Rents. Exercise all rights to collect Rents directly, including the right to enter the Property and demand possession.

9.5 Deficiency Judgment. To the extent permitted by Kentucky law, and subject to appraisal and confirmation procedures, pursue a deficiency judgment for any balance remaining after application of foreclosure sale proceeds.

9.6 Other Remedies. Exercise any other right or remedy available at law or in equity, including specific performance and injunctive relief.

9.7 Cumulative Remedies. All remedies herein are cumulative and concurrent and may be exercised singly, successively, or together.

10. RISK ALLOCATION

10.1 Indemnification by Mortgagor. Mortgagor shall indemnify, defend, and hold Mortgagee and its affiliates harmless from and against any and all losses, liabilities, damages, claims, costs, and expenses (including reasonable attorneys’ fees) arising out of or relating to:
(a) Ownership, operation, or condition of the Property;
(b) Violation of Environmental Laws or release of hazardous substances;
(c) Personal injury or property damage occurring on or about the Property; and
(d) Any Event of Default.

10.2 Liability Cap. Except for liabilities described in Section 4.3 (fraud, intentional waste, Environmental Liabilities), Mortgagor’s total liability under Section 10.1 shall not exceed the then-outstanding principal balance and accrued interest under the Note.

10.3 Force Majeure. Neither party shall be liable for failure to perform non-monetary obligations due to events beyond its reasonable control (e.g., natural disasters, acts of war), provided such party gives written notice within 10 days after the event and resumes performance as soon as practicable. Monetary obligations are expressly excluded from the force-majeure excuse.

11. DISPUTE RESOLUTION

11.1 Governing Law. This Mortgage and the rights of the parties shall be governed by and construed in accordance with the laws of the Commonwealth of Kentucky, without regard to conflict-of-laws principles.

11.2 Forum Selection. Each party irrevocably submits to the exclusive jurisdiction of the state courts located in [COUNTY], Kentucky, for any action or proceeding arising out of or relating to the Loan Documents.

11.3 Arbitration Excluded. The parties expressly agree that binding arbitration is excluded; disputes shall be resolved solely in the forum identified above.

11.4 Jury Trial Waiver. [OPTION A – ENFORCEABLE WAIVER] TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, EACH PARTY VOLUNTARILY, KNOWINGLY, AND IRREVOCABLY WAIVES TRIAL BY JURY IN ANY ACTION ARISING OUT OF OR RELATING TO THE LOAN DOCUMENTS.

11.5 Injunctive Relief. Nothing herein limits Mortgagee’s right to seek injunctive or equitable relief, including foreclosure, appointment of a receiver, or specific performance.

12. GENERAL PROVISIONS

12.1 Amendments and Waivers. No amendment or waiver shall be effective unless in writing signed by the party against whom enforcement is sought.

12.2 Assignment. Mortgagee may assign or participate its interest, in whole or in part, without notice to Mortgagor. Mortgagor shall not assign any rights or delegate any duties without Mortgagee’s prior written consent.

12.3 Successors and Assigns. This Mortgage binds and benefits the parties and their respective successors and permitted assigns.

12.4 Severability. If any provision is held invalid, the remaining provisions shall remain in full force so long as the economic and legal substance of the transactions contemplated hereby is not affected in any manner adverse to either party.

12.5 Merger. This Mortgage, the Note, and the other Loan Documents constitute the entire agreement of the parties regarding the subject matter and supersede all prior agreements.

12.6 Counterparts; Electronic Signatures. This Mortgage may be executed in counterparts, each of which shall be deemed an original, and together constitute one instrument. Signatures transmitted by electronic means shall be deemed original signatures for all purposes.

12.7 Notices. All notices shall be in writing and delivered (a) by hand, (b) by nationally recognized overnight courier, or (c) by certified mail, return receipt requested, to the addresses first written above (or such other address as either party may designate). Notices shall be effective upon receipt or refusal.

12.8 Recording. Mortgagor shall cause this Mortgage, and any related financing statements, to be duly recorded in the appropriate Kentucky county clerk’s office and pay all recording taxes and fees.

12.9 Time of Essence. Time is of the essence with respect to all obligations herein.

13. EXECUTION BLOCK

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

[Borrower Signature Block]

_______________________________________
[BORROWER LEGAL NAME],
a [STATE] [ENTITY TYPE]

By: _________________________________
Name: [NAME]
Title: [TITLE]

[Lender Signature Block]

_______________________________________
[LENDER LEGAL NAME],
a [STATE] [BANK/CORPORATION]

By: _________________________________
Name: [NAME]
Title: [TITLE]

14. NOTARY ACKNOWLEDGMENT

Commonwealth of Kentucky )
County of ☐ )

On this ___ day of __________, 20__, before me, the undersigned notary public, personally appeared ____________________________________, who acknowledged himself/herself to be the [TITLE] of [BORROWER LEGAL NAME], a [STATE] [ENTITY TYPE], and that he/she, as such officer, being authorized so to do, executed the foregoing instrument for the purposes therein contained on behalf of said entity.

Witness my hand and official seal.

_______________________________________
Notary Public
My Commission Expires: _____________

EXHIBIT A

Legal Description of the Property

[INSERT FULL METES-AND-BOUNDS OR PLAT DESCRIPTION]

SCHEDULE 1

Permitted Encumbrances

1. Taxes and assessments not yet due and payable.
2. Easements, covenants, and restrictions of record that do not materially interfere with the current use of the Property.
3. [Other permitted items.]