MORTGAGE AND SECURITY AGREEMENT
(West Virginia – Real Property)
[// GUIDANCE: This document is drafted for use as a traditional mortgage securing a promissory note, but it also includes bracketed language permitting conversion to a deed-of-trust structure should a trustee and power of sale be preferred. Customise all bracketed text prior to execution.]
TABLE OF CONTENTS
- Document Header & Recitals
- Definitions
- Grant of Mortgage and Security Interest
- Representations & Warranties of Borrower
- Covenants & Restrictions
- Payment Terms; Taxes; Insurance
- Events of Default
- Remedies Upon Default
- Risk Allocation
- Dispute Resolution
- General Provisions
- Execution & Acknowledgment
1. DOCUMENT HEADER & RECITALS
THIS MORTGAGE AND SECURITY AGREEMENT (this “Mortgage”) is made and entered into as of [EFFECTIVE DATE] (the “Effective Date”) by and between:
a. Borrower: [BORROWER NAME], a [STATE] [ENTITY TYPE], having its principal address at [ADDRESS] (“Borrower”); and
b. Lender: [LENDER NAME], a [STATE] [ENTITY TYPE], having its principal address at [ADDRESS] (“Lender”).
[OPTIONAL – Deed-of-Trust Structure]
c. Trustee: [TRUSTEE NAME], whose address is [ADDRESS] (“Trustee”).
RECITALS
A. Borrower has executed that certain Promissory Note dated as of the Effective Date (as amended, restated, renewed, or replaced, the “Note”) in the principal amount of [MAXIMUM PRINCIPAL AMOUNT] (the “Secured Debt”).
B. Borrower desires to secure prompt payment and performance of the Secured Debt and all other Obligations (as defined below).
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 all purposes of this Mortgage, the below terms shall have the following meanings. All section references are to this Mortgage unless expressly indicated otherwise.
“Collateral” – the Real Property, Improvements, Rents, Personal Property, and Proceeds described in Section 3.
“Debt” – collectively, the principal, interest, premiums, late charges, costs, expenses, fees, and any other amounts owing under the Note, this Mortgage, or any other Loan Document.
“Default Rate” – the per-annum rate specified in the Note to accrue upon the occurrence and during the continuance of an Event of Default.
“Environmental Law” – any applicable federal, state, or local statute, regulation, or ordinance governing or regulating Hazardous Materials or the environment.
“Event of Default” – any of the events or circumstances enumerated in Section 7.
“Hazardous Materials” – any substance, waste, or material defined or regulated as hazardous, toxic, or dangerous under any Environmental Law.
“Improvements” – all buildings, structures, fixtures, and betterments situate on the Land now or hereafter erected or affixed, together with all appurtenances, easements, rights, and hereditaments.
“Land” – the real property legally described in Exhibit A attached hereto (the “Real Property”).
“Loan Documents” – collectively, the Note, this Mortgage, and all other present or future agreements, certificates, and instruments executed in connection with the Secured Debt.
“Obligations” – the Debt and all covenants, duties, indemnities, and other obligations of Borrower under the Loan Documents.
“Permitted Encumbrances” – those liens and encumbrances listed in Exhibit B.
“Personal Property” – all machinery, equipment, fixtures, goods, account rights, intangibles, and other personal property now or hereafter located on or used in connection with the Real Property.
“Proceeds” – all proceeds, products, substitutions, and replacements of the Collateral, including insurance and condemnation awards.
“Rents” – all present and future rents, issues, profits, and other revenues of the Real Property.
3. GRANT OF MORTGAGE AND SECURITY INTEREST
3.1 Grant. Borrower hereby irrevocably mortgages, grants, bargains, sells, conveys, assigns, and pledges to Lender, WITH POWER OF SALE and right of foreclosure (or, if the Deed-of-Trust option is selected, to Trustee in trust for the benefit of Lender), all of Borrower’s right, title, and interest, whether now owned or hereafter acquired, in and to the Collateral, to secure the full and punctual payment and performance of the Obligations.
3.2 Fixture Filing. This Mortgage constitutes a financing statement (fixture filing) pursuant to Article 9 of the Uniform Commercial Code. The filing/recording information set forth below shall satisfy the requirements of § 9-502 of the UCC.
3.3 Future Advances. This Mortgage also secures any future advances that Lender, at its discretion, may make to or for the benefit of Borrower, up to but not exceeding the maximum principal amount stated in the Note, together with interest thereon.
3.4 Maximum Liability Cap. Notwithstanding anything to the contrary, Borrower’s liability under this Mortgage is capped at the Secured Debt Amount, plus (i) interest and costs as allowed by law, (ii) protective advances, and (iii) Lender’s enforcement expenses.
4. REPRESENTATIONS & WARRANTIES OF BORROWER
Borrower represents and warrants to Lender that, as of the Effective Date and continuing until the 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 formation and qualified to transact business in West Virginia.
4.2 Power & Enforceability. Borrower has full power and authority to execute, deliver, and perform this Mortgage and the other Loan Documents; this Mortgage constitutes a legal, valid, and binding obligation enforceable against Borrower in accordance with its terms.
4.3 Title. Borrower holds good, marketable, and insurable fee simple title to the Real Property, free of all liens and encumbrances except Permitted Encumbrances.
4.4 Compliance. The Collateral and Borrower’s use thereof comply in all material respects with applicable zoning, environmental, and other laws.
4.5 Litigation. No litigation or proceeding is pending or, to Borrower’s knowledge, threatened that would materially adversely affect the Collateral or Borrower’s ability to perform its Obligations.
4.6 Financial Condition. All financial statements delivered to Lender are true, correct, and complete in all material respects and fairly present Borrower’s financial condition.
4.7 Survival. Each representation and warranty shall survive until the Obligations have been indefeasibly paid in full.
5. COVENANTS & RESTRICTIONS
Borrower covenants and agrees with Lender that, until the Obligations are paid in full:
5.1 Payment & Performance. Borrower shall timely pay the Debt and perform all Obligations in accordance with the Loan Documents.
5.2 Maintenance. Borrower shall keep the Collateral in good repair, free from waste, comply with all laws, and make all necessary repairs.
5.3 Taxes & Assessments. Borrower shall pay when due all real estate taxes, assessments, and other charges against the Collateral, subject to Borrower’s right to contest in good faith and by appropriate proceedings.
5.4 Insurance. Borrower shall maintain (i) all-risk property insurance in an amount not less than the insurable replacement cost of the Improvements, (ii) commercial general liability insurance with limits of not less than [INSURANCE LIMITS], and (iii) such other insurance as Lender may reasonably require. Policies shall name Lender as mortgagee and loss payee and provide at least 30 days’ prior written notice of cancellation.
5.5 Negative Covenants. Without Lender’s prior written consent, Borrower shall not:
a. Create, incur, or permit any lien on the Collateral other than Permitted Encumbrances;
b. Transfer, sell, lease (except arm’s-length space leases in the ordinary course), or otherwise dispose of any interest in the Collateral;
c. Amend organizational documents in a manner that could materially impair Borrower’s ability to perform its Obligations.
5.6 Books & Records; Inspection. Borrower shall keep accurate books and records and permit Lender to inspect the Collateral and such records upon reasonable notice.
5.7 Notice Requirements. Borrower shall promptly notify Lender of (i) any Event of Default, (ii) any material casualty or condemnation affecting the Collateral, or (iii) any governmental or private claim materially affecting the Collateral.
5.8 Right of Redemption. Borrower retains its equity of redemption and may reinstate the Debt by tendering all sums then due at any time prior to (but not after) a foreclosure sale or entry of judicial foreclosure decree, unless a longer statutory redemption period is required by applicable law.
6. PAYMENT TERMS; TAXES; INSURANCE
6.1 Principal & Interest. Borrower shall make monthly installments of principal and interest in the amounts and on the dates set forth in the Note.
6.2 Escrows. At Lender’s option or upon the occurrence of an Event of Default, Borrower shall deposit with Lender monthly sums equal to one-twelfth of the annual (i) real estate taxes and assessments, and (ii) insurance premiums, to be applied by Lender to the payment thereof.
6.3 Late Charges & Default Interest. If any installment is not paid within [GRACE PERIOD] days after its due date, Borrower shall pay a late charge of [LATE FEE %] of the overdue amount and interest shall accrue at the Default Rate.
7. EVENTS OF DEFAULT
Each of the following shall constitute an “Event of Default”:
a. Payment Default. Failure to pay any installment of principal, interest, or other amount within [X] days after the due date.
b. Covenant Default. Failure to perform or observe any covenant, obligation, or condition under any Loan Document, and such failure continues for [CURE PERIOD DAYS] days after written notice (or, if incapable of cure within such period, within a reasonable time not to exceed [OUTER LIMIT] days provided Borrower diligently prosecutes cure).
c. False Representation. Any representation or warranty proves to have been materially false when made or remade.
d. Insolvency. Borrower (i) becomes insolvent, (ii) makes an assignment for the benefit of creditors, (iii) files or has filed against it a petition for bankruptcy or similar relief, not dismissed within [30] days.
e. Attachment, Seizure, or Condemnation of a material portion of the Collateral.
f. Cross-Default. An uncured default occurs under any other Loan Document or any other agreement securing indebtedness of Borrower to Lender.
8. REMEDIES UPON DEFAULT
Upon the occurrence and during the continuance of any Event of Default, Lender may, at its option and without demand (except where required by law):
8.1 Acceleration. Declare all Obligations immediately due and payable.
8.2 Possession. Enter upon and take possession of the Collateral and perform any acts necessary to preserve or protect same.
8.3 Foreclosure.
(i) Judicial Foreclosure: Institute an action to foreclose this Mortgage in a court of competent jurisdiction within the State of West Virginia.
(ii) [Power of Sale / Deed-of-Trust Option]: Direct Trustee to sell the Collateral at public auction pursuant to non-judicial foreclosure procedures permitted under West Virginia law.
8.4 Appointment of Receiver. Seek appointment of a receiver to collect Rents and operate the Collateral.
8.5 Offset. Apply any indebtedness of Lender to Borrower against the Obligations.
8.6 Deficiency. After foreclosure and application of sale proceeds, Lender may recover any deficiency from Borrower to the extent permitted by West Virginia law, provided that any lawsuit for such deficiency is commenced within the applicable statute of limitations.
8.7 Cumulative Rights. All rights and remedies are cumulative and may be exercised concurrently or successively.
8.8 Costs & Fees. Borrower shall pay all costs of collection, including reasonable attorneys’ fees, appraisal fees, receiver fees, and court costs.
[// GUIDANCE: WV permits non-judicial trustee sales for deeds of trust; judicial foreclosure is available for mortgages. Select the path that aligns with your chosen instrument and local practice.]
9. RISK ALLOCATION
9.1 Indemnification by Borrower. Borrower shall indemnify, defend, and hold harmless Lender, its affiliates, and their respective officers, directors, employees, and agents (“Indemnified Parties”) from and against any and all claims, losses, liabilities, damages, costs, and expenses (including reasonable attorneys’ fees) arising out of or relating to (i) the ownership, operation, or use of the Collateral, (ii) any breach by Borrower of the Loan Documents, or (iii) violation of any law, except to the extent caused by the gross negligence or willful misconduct of an Indemnified Party. This indemnity shall survive satisfaction of the Obligations and any foreclosure.
9.2 Limitation of Liability. Lender’s liability to Borrower for any matter arising out of or relating to the Loan Documents shall not exceed the Secured Debt Amount and shall exclude consequential, special, or punitive damages.
9.3 Insurance Proceeds & Condemnation Awards. Lender may apply any insurance proceeds or condemnation awards to restoration of the Improvements or to the Debt, at Lender’s sole discretion.
9.4 Force Majeure. Neither party shall be liable for failure to perform non-monetary obligations due to causes beyond its reasonable control (excluding financial inability), provided that prompt notice is given and diligent efforts to resume performance are undertaken.
10. DISPUTE RESOLUTION
10.1 Governing Law. This Mortgage and the Obligations shall be governed by and construed in accordance with the laws of the State of West Virginia, without regard to its conflict-of-law principles.
10.2 Forum Selection. Borrower irrevocably submits to the exclusive jurisdiction of any state court located in [COUNTY], West Virginia for any action or proceeding arising out of or relating to the Loan Documents, and Borrower waives any objection based on inconvenient forum.
10.3 Arbitration. The parties expressly exclude arbitration; any dispute shall be resolved in the courts specified above.
10.4 Jury Trial Waiver. [JURY WAIVER LANGUAGE: “TO THE EXTENT PERMITTED BY APPLICABLE LAW, EACH PARTY HEREBY WAIVES ITS RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THE LOAN DOCUMENTS.”]
[// GUIDANCE: WV courts generally enforce pre-dispute jury waivers between sophisticated parties; nonetheless, review current state precedents before inclusion.]
10.5 Injunctive Relief. Nothing herein shall impair Lender’s right to (i) seek specific performance, writs of assistance, or other equitable relief, or (ii) proceed with foreclosure or obtain a receiver, all without the necessity of posting bond except as may be mandated by law.
11. GENERAL PROVISIONS
11.1 Amendments; Waivers. No amendment, modification, or waiver of any provision shall be effective unless in writing signed by both Borrower and Lender. A waiver on one occasion shall not constitute a waiver on any subsequent occasion.
11.2 Assignment. Lender may assign, sell, or participate its interest in the Loan Documents without Borrower’s consent. Borrower may not assign any rights or delegate any obligations without Lender’s prior written consent.
11.3 Successors & Assigns. The Loan Documents shall bind and inure to the benefit of the parties and their respective heirs, representatives, successors, and permitted assigns.
11.4 Severability. If any provision is held unenforceable, such provision shall be narrowed or excised to the extent necessary to render it enforceable, and the remaining provisions shall remain in full force.
11.5 Integration. The Loan Documents collectively constitute the entire agreement between the parties regarding the subject matter 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 transmitted electronically (e.g., PDF, DocuSign®) shall be deemed originals.
11.7 Recording. Borrower shall pay all recording fees, transfer taxes, intangible taxes, and similar charges incident to the recording of this Mortgage.
11.8 Notices. All notices required or permitted shall be in writing and delivered (i) personally, (ii) by certified mail (return receipt requested), or (iii) by nationally recognized overnight courier, to the addresses first set forth above (or as later designated). Notice is deemed given upon delivery or first attempted delivery.
12. EXECUTION & ACKNOWLEDGMENT
IN WITNESS WHEREOF, the parties have executed this Mortgage as of the Effective Date.
BORROWER:
[Borrower Entity Name]
By: ____
Name: ____
Title: _________
LENDER:
[Lender Entity Name]
By: ____
Name: ____
Title: _________
[OPTIONAL – TRUSTEE SIGNATURE]
TRUSTEE:
[Trustee Name]
By: ____
Name: ____
Title: _________
NOTARY ACKNOWLEDGMENT
State of West Virginia
County of [___]
On this _ day of _, 20__, before me, the undersigned Notary Public, personally appeared [NAME], [TITLE] of [BORROWER NAME], who acknowledged that (s)he executed the foregoing instrument for the purposes therein contained.
Witness my hand and official seal.
Notary Public
My Commission Expires: _______
[// GUIDANCE: Duplicate acknowledgment blocks for Lender and Trustee as required. WV Code requires notarization and, in some counties, two witness signatures for recordation—confirm local clerk requirements.]
EXHIBIT A
Legal Description of Real Property
EXHIBIT B
Permitted Encumbrances
[// GUIDANCE: Prior to closing, counsel should (1) confirm that the legal description matches the latest survey and title commitment, (2) verify compliance with West Virginia’s foreclosure notice and advertising statutes, and (3) ensure the recording package conforms to county clerk formatting rules (margins, font size, cover sheet, etc.).]