MORTGAGE AND SECURITY AGREEMENT

(State of New Jersey)

[// GUIDANCE: This template is designed for fee-simple, single-parcel, commercial or residential transactions in the State of New Jersey. It is court-ready but should be reviewed and customized for each deal. Bracketed language requires user input or optional selection.]

TABLE OF CONTENTS

I. Document Header
II. Definitions
III. Operative Provisions
    A. Grant of Mortgage and Security Interest
    B. Debt Secured
IV. Representations and Warranties
V. Covenants & Restrictions
VI. Default & Remedies
VII. Risk Allocation
VIII. Dispute Resolution
IX. General Provisions
X. Execution Block
XI. Exhibits

I. DOCUMENT HEADER

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

1. Borrower/Mortgagor: [BORROWER LEGAL NAME], a [STATE & TYPE OF ENTITY / INDIVIDUAL], having an address at [BORROWER ADDRESS] (“Borrower”); and
2. Lender/Mortgagee: [LENDER LEGAL NAME], a [STATE & TYPE OF ENTITY], having an address at [LENDER ADDRESS] (“Lender”).

Recitals

A. Borrower is indebted to Lender under that certain promissory note dated as of the Effective Date in the original principal amount of $[PRINCIPAL AMOUNT] (together with all renewals, extensions, modifications, replacements and future advances, the “Note”).
B. To secure the Note and all other Obligations (as defined herein), Borrower agrees to grant Lender a first-priority mortgage lien on the real property described herein.
C. The parties intend that this Mortgage conform to and be enforceable under New Jersey law, including the Fair Foreclosure Act, N.J. Stat. Ann. §§ 2A:50-53 to -68 (West 2023).

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are acknowledged, the parties agree as follows:

II. DEFINITIONS

For ease of reference, the following terms have the meanings set forth below. All capitalized terms used but not defined herein shall have the meanings assigned in the Note.

“Applicable Law” means all federal, state and local statutes, regulations, ordinances and judicial decisions governing the Mortgaged Property, including without limitation the New Jersey Fair Foreclosure Act and N.J. Stat. Ann. § 2A:50-2 (West 2023) (deficiency judgments).

“Business Day” means any day other than Saturday, Sunday or legal holiday in the State of New Jersey.

“Event of Default” has the meaning set forth in Section VI.1.

“Impositions” means all real estate taxes, assessments, water and sewer rents, and other governmental charges imposed on the Mortgaged Property.

“Indebtedness” means the unpaid principal of, interest on, and all other amounts due under the Note and this Mortgage, including Protective Advances.

“Mortgaged Property” means the real property, improvements, fixtures, rents, and personal property located at [STREET ADDRESS], [CITY], County of [COUNTY], State of New Jersey, more particularly described in Exhibit A.

“Obligations” means the Indebtedness and all other debts, liabilities and duties of performance now or hereafter owing by Borrower to Lender under the Loan Documents.

“Protective Advances” means all sums advanced by Lender to protect or preserve its security interest, including taxes, insurance premiums and costs of maintenance.

“Right of Redemption” is defined in Section VI.5.

III. OPERATIVE PROVISIONS

1. Grant of Mortgage and Security Interest

Borrower hereby MORTGAGES, GRANTS, BARGAINS, SELLS, CONVEYS, ASSIGNS, TRANSFERS and SETS OVER to Lender, with mortgage covenants, the Mortgaged Property, TO HAVE AND TO HOLD the same unto Lender, its successors and assigns forever, in trust to secure the Obligations.

Borrower additionally grants to Lender a security interest in all fixtures and personal property now or hereafter affixed to or used in connection with the Mortgaged Property, together with all replacements, additions, proceeds and products thereof, pursuant to Article 9 of the Uniform Commercial Code as adopted in New Jersey.

[// GUIDANCE: File a UCC-1 fixture filing concurrently with recording this Mortgage to perfect the security interest in fixtures.]

2. Debt Secured

This Mortgage secures:
a. the principal sum of $[PRINCIPAL AMOUNT], together with interest at the rate(s) set forth in the Note;
b. any future advances up to a maximum aggregate principal amount of $[MAXIMUM SECURED DEBT];
c. all other Obligations and Protective Advances; and
d. Lender’s costs and expenses, including reasonable attorneys’ fees, incurred in enforcing the Loan Documents.

IV. REPRESENTATIONS & WARRANTIES

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

1. Existence & Authority. Borrower is duly organized, validly existing and in good standing under the laws of its state of formation, and has full power and authority to execute and deliver this Mortgage.
2. Title. Borrower holds indefeasible fee simple title to the Mortgaged Property, free of all liens except those permitted in Schedule 1.
3. Enforceability. The Loan Documents constitute valid and binding obligations of Borrower, enforceable against Borrower in accordance with their terms.
4. Compliance with Laws. The Mortgaged Property is in material compliance with all Applicable Laws.
5. Environmental Matters. Borrower has received no written notice of, and to Borrower’s knowledge there exist no, material violations of Environmental Laws relating to the Mortgaged Property.
6. Financial Statements. All financial information delivered to Lender is true, complete and fairly presents Borrower’s financial condition.
7. Solvency. After giving effect to the transactions contemplated herein, Borrower is solvent and able to pay its debts as they mature.

All representations and warranties shall survive recordation of this Mortgage and any foreclosure sale.

V. COVENANTS & RESTRICTIONS

Borrower covenants and agrees that until the Obligations are paid in full:

1. Payment & Performance. Borrower shall punctually pay the Indebtedness and perform all Obligations.
2. Maintenance. Borrower shall maintain the Mortgaged Property in good order and repair, free of waste.
3. Insurance. Borrower shall keep the improvements insured against fire and other hazards in commercially reasonable amounts, naming Lender as mortgagee and loss payee pursuant to a standard mortgagee clause.
4. Taxes and Impositions. Borrower shall pay all Impositions before delinquency and deliver paid receipts upon request.
5. Further Assurances. Borrower shall execute and deliver such additional documents as Lender may reasonably require to perfect and continue the lien hereof.
6. Transfer Restrictions. Without Lender’s prior written consent, Borrower shall not (i) sell, convey or transfer any interest in the Mortgaged Property, or (ii) permit additional financing secured by the Mortgaged Property, except as expressly permitted in the Loan Documents.
7. Notice Obligations. Borrower shall promptly give Lender written notice of (i) any Event of Default, (ii) any material litigation affecting Borrower or the Mortgaged Property, or (iii) any governmental notice alleging violation of Applicable Law.
8. Books & Records. Borrower shall keep complete and accurate books and records and permit Lender to inspect the Mortgaged Property and such records upon reasonable notice.

VI. DEFAULT & REMEDIES

1. Events of Default

Each of the following shall constitute an “Event of Default”:

a. Failure to pay any installment of principal, interest or other sum within [X] days after its due date;
b. Breach of any covenant or agreement within [Y] days after written notice from Lender;
c. Any representation or warranty proving to have been materially false when made;
d. Insolvency, bankruptcy or assignment for the benefit of creditors by Borrower;
e. Levy or attachment against the Mortgaged Property not discharged within [Z] days.

2. Notice & Cure

Except for payment defaults (which require [X]-day notice only), Lender shall provide written notice specifying the default and allow the applicable cure period before exercising remedies.

3. Remedies Upon Default

Upon the occurrence and continuance of an Event of Default, Lender may, at its option and without further demand:

a. Accelerate the maturity of the Indebtedness;
b. Commence judicial foreclosure in the Superior Court of New Jersey pursuant to N.J. Stat. Ann. §§ 2A:50-53 to -68;
c. Apply for appointment of a receiver;
d. Enter and take possession of the Mortgaged Property;
e. Make Protective Advances to preserve the lien; and
f. Exercise all other rights and remedies available at law or in equity.

4. Foreclosure Procedures

Borrower acknowledges that foreclosure in New Jersey is judicial. Following final judgment, the Mortgaged Property may be sold by the county sheriff after public notice in accordance with Applicable Law.

5. Right of Redemption & Reinstatement

Borrower retains the equitable right to redeem the Mortgaged Property at any time prior to entry of final judgment of foreclosure by paying all sums then due, together with costs and attorneys’ fees, as permitted by Applicable Law (“Right of Redemption”).

6. Deficiency Judgment

To the extent permitted by N.J. Stat. Ann. § 2A:50-2, Lender may, within the statutory period, pursue a separate action for any deficiency remaining after application of the foreclosure sale proceeds to the Indebtedness. Borrower waives any defenses to such action not expressly provided by statute.

7. Attorney Fees & Costs

Borrower shall pay all reasonable attorneys’ fees, court costs and expenses incurred by Lender in enforcing the Loan Documents, whether or not suit is filed, and whether incurred upon appeal or in bankruptcy.

VII. RISK ALLOCATION

1. Indemnification by Borrower

Borrower shall indemnify, defend and hold harmless Lender and its affiliates, officers, directors, employees and agents from and against any and all claims, liabilities, losses, damages and expenses (including reasonable attorneys’ fees) arising out of or relating to (i) the Mortgaged Property, (ii) any breach of Borrower’s representations, warranties or covenants, or (iii) the presence, release or discharge of Hazardous Materials, except to the extent caused by Lender’s gross negligence or willful misconduct.

2. Limitation of Liability

Notwithstanding anything herein to the contrary, Lender’s monetary recovery under this Mortgage shall be limited to (i) the Mortgaged Property and its proceeds, and (ii) the Secured Debt Amount (as defined in Section III.2), except for claims arising from Lender’s gross negligence or willful misconduct.

3. Insurance Requirements

Borrower shall maintain, at a minimum:
a. All-risk property insurance in an amount not less than 100% of full replacement cost;
b. Commercial general liability insurance with limits of not less than $[AMOUNT] per occurrence; and
c. Flood insurance if the Mortgaged Property is in a FEMA special flood hazard area.

4. Force Majeure

Neither party shall be liable for failure to perform non-monetary obligations due to events beyond its reasonable control (e.g., acts of God, war, terrorism, strikes) provided that the affected party gives prompt notice and resumes performance as soon as practicable. This provision shall not excuse payment obligations.

VIII. DISPUTE RESOLUTION

1. Governing Law. This Mortgage and the rights of the parties shall be governed by the laws of the State of New Jersey, without regard to its conflict of laws principles.
2. Forum Selection. Subject to judicial foreclosure proceedings, any litigation arising out of or relating to the Loan Documents shall be instituted exclusively in the state courts located in [COUNTY], New Jersey, and Borrower irrevocably submits to the jurisdiction of such courts.
3. Arbitration Excluded. The parties expressly agree that no claim arising under the Loan Documents shall be submitted to arbitration.
4. Jury Waiver. TO THE EXTENT PERMITTED BY APPLICABLE LAW, EACH PARTY HEREBY KNOWINGLY AND VOLUNTARILY WAIVES TRIAL BY JURY IN ANY ACTION OR PROCEEDING (INCLUDING ANY COUNTERCLAIM) ARISING OUT OF OR RELATING TO THE LOAN DOCUMENTS. IF SUCH WAIVER IS DETERMINED TO BE UNENFORCEABLE, THIS CLAUSE SHALL BE DEEMED STRICKEN AND THE MATTER SHALL PROCEED WITHOUT IT.
5. Injunctive Relief. Nothing herein shall limit Lender’s right to seek interim or permanent injunctive relief, including but not limited to appointment of a receiver or specific performance.

IX. GENERAL PROVISIONS

1. Amendments & Waivers. No amendment or waiver of any provision shall be effective unless in writing and signed by the party against whom enforcement is sought. A waiver on one occasion shall not be deemed a waiver on any subsequent occasion.
2. Assignment. Lender may assign this Mortgage and the Note without Borrower’s consent. Borrower may not assign or delegate its obligations without Lender’s prior written consent.
3. Successors & Assigns. This Mortgage shall bind and inure to the benefit of the parties and their respective successors and permitted assigns.
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 achieve its intended purpose.
5. Integration. The Loan Documents constitute the entire agreement between the parties with respect to the subject matter hereof and supersede all prior agreements or understandings.
6. Counterparts; Electronic Signatures. This Mortgage may be executed in any number of counterparts, each of which shall be deemed an original. Signatures delivered by facsimile, “.pdf” or other electronic means shall be deemed original signatures and fully enforceable.
7. Recording & Documentary Fees. Borrower shall pay all costs of recording this Mortgage and any recordation or transfer taxes.
8. Notice. All notices shall be in writing and shall be deemed given when delivered personally, sent by nationally recognized overnight courier, or deposited in the U.S. Mail, certified, return-receipt requested, postage prepaid, addressed to the party at its address stated herein (or as later changed by notice).

X. EXECUTION BLOCK

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

BORROWER:
[Borrower Legal Name]
By: _____
Name: [AUTHORIZED SIGNATORY]
Title: [TITLE]
Date: ____

LENDER:
[Lender Legal Name]
By: _____
Name: [AUTHORIZED SIGNATORY]
Title: [TITLE]
Date: ____

NOTARY ACKNOWLEDGMENT

State of New Jersey )
County of ____ ) ss.:

On this ___ day of _, 20_, before me, the undersigned Notary Public, personally appeared ____, who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the foregoing instrument and acknowledged that he/she/they executed the same in his/her/their authorized capacity, and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.

Witness my hand and official seal.

Notary Public, State of New Jersey
My Commission Expires: ____

XI. EXHIBITS

• Exhibit A – Legal Description of Mortgaged Property
• Schedule 1 – Permitted Encumbrances
• Exhibit B – Form of Assignment of Leases and Rents (if applicable)
• Exhibit C – UCC-1 Fixture Filing (sample)

[// GUIDANCE:
1. Verify that the legal description in Exhibit A matches the title commitment.
2. Complete Schedule 1 with any liens or easements acceptable to Lender.
3. If Leases exist, attach Exhibit B and obtain tenant estoppels.
4. File the Mortgage in the county clerk’s office and the UCC-1 with the Division of Commercial Recording.
5. For residential two-to-four family properties, append all consumer protection disclosures required under federal and NJ law.]