NORTH CAROLINA MORTGAGE (DEED OF TRUST) AGREEMENT

[// GUIDANCE: Use this instrument to secure a real-property loan in North Carolina. NC customarily uses a “Deed of Trust,” which incorporates a third-party Trustee and non-judicial power-of-sale foreclosure. This template is drafted to function as either a true Mortgage or a Deed of Trust. Select the appropriate terminology in the brackets below and conform all references accordingly.]

TABLE OF CONTENTS

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

1. DOCUMENT HEADER

Mortgage (Deed of Trust) Agreement (“Agreement”) made effective as of [EFFECTIVE DATE], by and among:

a. [BORROWER LEGAL NAME], a [STATE] [ENTITY TYPE], having its principal address at [BORROWER ADDRESS] (“Borrower” or “Grantor”);
b. [LENDER LEGAL NAME], a [STATE] [ENTITY TYPE], having its principal address at [LENDER ADDRESS] (“Lender” or “Beneficiary”); and
c. [TRUSTEE NAME], whose business address is [TRUSTEE ADDRESS] (“Trustee”) [// GUIDANCE: If using a true Mortgage (no Trustee), delete all Trustee references and convert power-of-sale language to judicial foreclosure.]

Recitals:
A. Borrower is indebted to Lender under that certain Promissory Note dated [LOAN DATE] in the original principal amount of $[SECURED OBLIGATION AMOUNT] (as amended, “Note”).
B. Borrower desires to secure performance of the Note and all other Secured Obligations (defined below) by granting a first-priority lien on the Property (defined below).
C. Lender is willing to extend or continue credit upon the execution and delivery of this Agreement.

Therefore, for valuable consideration, Borrower hereby agrees as follows:

2. DEFINITIONS

For purposes of this Agreement, the following terms shall have the meanings set forth below (alphabetically):

“Affiliate” – Any person or entity that, directly or indirectly, controls, is controlled by, or is under common control with Borrower.
“Applicable Law” – All constitutions, statutes, regulations, ordinances, and judicial or administrative orders of any governmental authority having jurisdiction over the parties or the Property, including the North Carolina General Statutes governing real-property security instruments and power-of-sale foreclosure.
“Default Rate” – The lesser of (i) [DEFAULT RATE]% per annum or (ii) the maximum rate permitted by Applicable Law.
“Event of Default” – Any of the events described in Section 6.1.
“Imposition” – All taxes, assessments, levies, charges, and utility fees relating to the Property.
“Indemnified Parties” – Lender, Trustee, their respective successors, assigns, officers, directors, employees, agents, and attorneys.
“Personal Property” – All fixtures, appurtenances, rents, leases, profits, and proceeds associated with or derived from the Property.
“Property” – The real property located at [PROPERTY ADDRESS], situated in [COUNTY] County, North Carolina, together with all improvements, easements, and hereditaments more particularly described in Exhibit A attached hereto.
“Secured Obligations” – Collectively, (i) the Note, (ii) all renewals, extensions, modifications, and substitutions thereof, (iii) all advances made by Lender to protect its security, and (iv) all other indebtedness and obligations of Borrower to Lender, absolute or contingent, now existing or hereafter arising, capped in the aggregate at the maximum principal amount of $[SECURED OBLIGATION AMOUNT].

[// GUIDANCE: Add/modify defined terms as needed for deal-specific concepts.]

3. GRANTING CLAUSE & SECURED OBLIGATIONS

3.1 Grant. Borrower hereby (a) grants, bargains, sells, conveys, assigns, and mortgages to Trustee, in trust for the benefit of Lender, a first priority lien on the Property and the Personal Property, together with the power of sale; and (b) grants to Lender a security interest under Article 9 of the Uniform Commercial Code in all Personal Property, to secure prompt payment and performance of the Secured Obligations.

3.2 Fixture Filing. This Agreement shall be filed of record as a financing statement fixture filing. The mailing address of Borrower and Lender are as set forth in Section 9.4.

3.3 Maximum Obligation. Notwithstanding anything to the contrary, Borrower’s liability and Lender’s recovery under this Agreement shall not exceed the unpaid balance of the Secured Obligations (inclusive of lawful interest, protective advances, fees, and expenses).

4. REPRESENTATIONS & WARRANTIES

Borrower represents and warrants to Lender, as of the Effective Date and continuing until the Secured Obligations are indefeasibly paid in full:

4.1 Organization; Authority. Borrower is duly organized, validly existing, and in good standing under the laws of its state of formation, and possesses requisite authority to execute and deliver this Agreement and perform hereunder.

4.2 Title. Borrower is the lawful fee simple owner of the Property, free and clear of all liens and encumbrances other than those approved in writing by Lender.

4.3 Enforceability. This Agreement constitutes a legal, valid, and binding obligation of Borrower, enforceable in accordance with its terms, subject only to Applicable Law affecting creditor rights generally.

4.4 Compliance. The Property and its present use comply in all material respects with Applicable Law, including zoning, building codes, and environmental regulations.

4.5 Litigation. No pending or, to Borrower’s knowledge, threatened actions could materially impair Borrower’s ability to perform the Secured Obligations or the value of the Property.

4.6 Taxes & Impositions. All Impositions relating to the Property have been paid or duly contested in accordance with Section 5.2.

[// GUIDANCE: Insert additional industry-specific reps (e.g., environmental, flood zone, OFAC) as needed.]

The representations and warranties shall survive until full satisfaction of the Secured Obligations.

5. COVENANTS & RESTRICTIONS

5.1 Payment. Borrower shall punctually pay the Secured Obligations in accordance with their terms.

5.2 Impositions and Assessments. Borrower shall pay all Impositions prior to delinquency, subject to Borrower’s right to contest the same in good faith if (a) Borrower maintains reserves as Lender may reasonably require, and (b) such contest does not create a lien senior to this Agreement.

5.3 Maintenance; Waste. Borrower shall maintain the Property in good repair, shall not commit or permit waste, and shall comply with all Applicable Law. Without Lender’s prior written consent, Borrower shall not remove, demolish, or materially alter any improvement, nor abandon the Property.

5.4 Insurance.
(a) Required Coverage. Borrower shall maintain (i) “all-risk” property insurance in an amount not less than the full replacement cost, (ii) liability insurance with limits of not less than $[AMOUNT] per occurrence, and (iii) such other coverages as Lender may reasonably require.
(b) Endorsements. Each policy shall (i) name Lender as mortgagee and loss payee, (ii) provide at least 30 days’ prior written notice of cancellation or modification, and (iii) be issued by insurers rated A- or better by A.M. Best.
(c) Evidence. Borrower shall deliver certificates of insurance and, upon request, complete copies of policies.

5.5 Negative Covenants. Without Lender’s prior written consent, Borrower shall not:
(i) create or permit any lien superior to this Agreement;
(ii) transfer any interest in the Property, except permitted leases in the ordinary course;
(iii) materially change the Property’s use; or
(iv) incur indebtedness secured by the Property, other than the Secured Obligations.

5.6 Books & Records; Inspection. Borrower shall keep accurate books regarding the Property and shall permit Lender or its agents to enter and inspect the Property upon reasonable notice.

5.7 Notice & Cure. Borrower shall promptly notify Lender of any Event of Default or material adverse change relating to the Property, and shall diligently pursue cure of the same.

6. DEFAULT & REMEDIES

6.1 Events of Default. Each of the following shall constitute an Event of Default:
a. Failure to pay any amount due under the Note or other Secured Obligation within [GRACE PERIOD] days after its due date.
b. Breach of any covenant, representation, or warranty herein and failure to cure within [CURE PERIOD] days after written notice.
c. Insolvency, bankruptcy, or assignment for the benefit of creditors by Borrower.
d. Entry of any judgment against Borrower or the Property that is not discharged, bonded, or stayed within 30 days.
e. Transfer of any interest in the Property in violation of Section 5.5.

6.2 Notice of Default. Upon occurrence of an Event of Default, Lender shall deliver written notice specifying the default (unless notice is waived by law).

6.3 Remedies. Subject to Applicable Law and required pre-foreclosure hearings:
a. Acceleration. Lender may declare the entire unpaid balance of the Secured Obligations immediately due and payable.
b. Power-of-Sale Foreclosure. Trustee shall, upon Lender’s request, sell the Property at public auction after giving statutorily required notice and conducting any mandatory hearing before the clerk of superior court (the “Foreclosure Hearing”).
c. Appointment of Successor Trustee. Lender may, by instrument recorded in the county registry, appoint a successor Trustee.
d. Protective Advances. Lender may advance funds to protect the lien or the Property; such advances shall bear interest at the Default Rate and be secured hereby.
e. Receiver. Lender may seek appointment of a receiver for the Property’s income.
f. Deficiency. To the extent permitted by Applicable Law, Lender may recover any deficiency between the sale proceeds (credited at fair market value as determined under Applicable Law) and the Secured Obligations.
g. Other Remedies. Lender may exercise any rights available under the UCC or other Applicable Law.

6.4 Right of Redemption & Upset Bid. Borrower (or an eligible party) may redeem the Property by paying the full amount due at any time prior to the foreclosure sale and during any statutory upset-bid period thereafter, as permitted by Applicable Law.

6.5 Application of Proceeds. Foreclosure or other proceeds shall be applied:
(i) to costs and expenses of sale (including Trustee’s commission not exceeding the maximum allowed by law);
(ii) to the Secured Obligations in such order as Lender elects; and
(iii) any surplus to the person lawfully entitled thereto.

6.6 Attorneys’ Fees and Costs. Borrower shall pay all reasonable fees, costs, and expenses (including attorneys’ fees) incurred by Lender in enforcing this Agreement, subject to any statutory caps or requirements.

7. RISK ALLOCATION

7.1 Indemnification. Borrower shall indemnify, defend, and hold harmless the Indemnified Parties from and against any and all claims, losses, liabilities, costs, and expenses (including reasonable attorneys’ fees) arising out of or related to (i) Borrower’s breach of this Agreement, (ii) ownership or operation of the Property, or (iii) environmental conditions on, under, or about the Property, except to the extent caused by the gross negligence or willful misconduct of the Indemnified Parties.

7.2 Limitation of Liability. Lender’s and Trustee’s liability in connection with this Agreement shall be limited to the extent of their gross negligence or willful misconduct, and in no event shall exceed the aggregate amount of the Secured Obligations actually received by Lender hereunder.

7.3 Insurance Proceeds; Condemnation Awards. Unless Lender elects otherwise, all insurance proceeds and condemnation awards shall be applied to restoration of the Property or to repayment of the Secured Obligations, in Lender’s sole discretion.

7.4 Force Majeure. No failure or delay by Borrower resulting from acts of God, war, terrorism, pandemics, or other events beyond Borrower’s reasonable control shall constitute a default, provided Borrower gives prompt notice and diligently resumes performance once the force majeure event ceases.

8. DISPUTE RESOLUTION

8.1 Governing Law. This Agreement and the Secured Obligations shall be governed by and construed in accordance with the laws of the State of North Carolina, without regard to its conflict-of-laws principles.

8.2 Forum Selection. Borrower irrevocably submits to the exclusive jurisdiction of the state courts located in [COUNTY] County, North Carolina (and, if jurisdiction is otherwise proper, the federal courts sitting in the Middle or Eastern District of North Carolina) for any suit, action, or proceeding arising out of or relating to this Agreement.

8.3 Arbitration. The parties expressly exclude arbitration; disputes shall be resolved solely in the courts designated above.

8.4 Jury Waiver. [OPTIONAL IF ENFORCEABLE IN NC] BORROWER AND LENDER EACH KNOWINGLY, VOLUNTARILY, AND INTENTIONALLY WAIVE ANY RIGHT THEY MAY HAVE TO A TRIAL BY JURY IN ANY LITIGATION ARISING OUT OF OR RELATING TO THIS AGREEMENT. [// GUIDANCE: North Carolina case law on pre-dispute jury waivers is unsettled. Retain or delete after local counsel review.]

8.5 Injunctive Relief. Nothing in this Section shall limit Lender’s right to seek injunctive, equitable, or provisional relief (including foreclosure, appointment of receiver, or specific performance).

9. GENERAL PROVISIONS

9.1 Amendments and Waivers. No amendment or waiver shall be effective unless in writing signed by Borrower and Lender (and Trustee if necessary). A waiver on one occasion shall not constitute a waiver on any subsequent occasion.

9.2 Assignment. Lender may assign or participate its interest, in whole or in part, without Borrower’s consent. Borrower may not assign this Agreement without Lender’s prior written consent.

9.3 Successors and Assigns. This Agreement shall bind and benefit the parties and their respective successors and permitted assigns.

9.4 Notices. Any notice required or permitted shall be in writing and deemed given when (i) delivered in person, (ii) sent by nationally recognized overnight courier, or (iii) deposited in the U.S. Mail, certified, return-receipt requested, postage prepaid, addressed as follows (or such other address as a party may designate):

Borrower: [BORROWER NOTICE ADDRESS]
Lender: [LENDER NOTICE ADDRESS]
Trustee: [TRUSTEE NOTICE ADDRESS]

9.5 Severability; Reformation. If any provision is held unenforceable, it shall be reformed to the minimum extent necessary, and the remainder shall remain in full force.

9.6 Integration. This Agreement, together with the Note and any related documents, constitutes the entire agreement of the parties with respect to the subject matter and supersedes all prior agreements.

9.7 Counterparts; Electronic Signatures. This Agreement may be executed in any number of counterparts (including PDF or electronic signatures), each of which shall be deemed an original and all of which together constitute one instrument.

9.8 Recording. Borrower shall cause this Agreement and any assignments or modifications to be promptly recorded in the Office of the Register of Deeds for [COUNTY] County, NC, and shall pay all recording and documentary fees.

9.9 Further Assurances. Borrower shall execute and deliver such additional documents, and take such further actions, as Lender may reasonably request to perfect and continue the lien and security interests created hereby.

10. EXECUTION & ACKNOWLEDGMENT

IN WITNESS WHEREOF, the parties have executed this Mortgage (Deed of Trust) Agreement as of the Effective Date.

[// GUIDANCE: Use a signature block appropriate to entity type; include notary acknowledgment meeting NC acknowledgment requirements (G.S. § 10B-40).]

Borrower: [BORROWER LEGAL NAME]
By: ___________
Name: [NAME]
Title: [TITLE]

Lender: [LENDER LEGAL NAME]
By: ___________
Name: [NAME]
Title: [TITLE]

Trustee: [TRUSTEE NAME]

(Signature)

NOTARY ACKNOWLEDGMENT (NORTH CAROLINA)

State of North Carolina
County of [COUNTY]

I, [NOTARY NAME], a Notary Public for the aforesaid County and State, do hereby certify that [NAME OF SIGNATORY], personally appeared before me this day and acknowledged that (s)he is [TITLE] of [ENTITY], and that by authority duly given and as the act of the entity, the foregoing instrument was signed and sealed on behalf of the entity. Witness my hand and official seal this ___ day of _, 20.

(SEAL)

Notary Public
My commission expires: ____

EXHIBIT A

(Legal Description of Property)

[INSERT METES AND BOUNDS OR LOT/BLOCK LEGAL DESCRIPTION]

[// GUIDANCE:
1. Verify local recording requirements: margins, font size, document excise tax, and trustee signature/seal formatting.
2. Confirm foreclosure notices comply with N.C. Gen. Stat. Chapter 45, Article 2A (power-of-sale).
3. Evaluate inclusion of environmental indemnity, escrow provisions, and multi-state due-on-sale language if appropriate.
4. For consumer/owner-occupied property, review federal (TILA, RESPA) and NC predatory lending statutes before use.
5. Delete or adjust optional jury-waiver clause based on most current NC precedent and client risk tolerance.
]