Mortgage

OMB Control No. 0610-0096
Expiration Date: xx/xx/20xx

(Large top margin left to accommodate recording information, as necessary)

[[[Insert the “instrument prepared by” clause and contact information as required by local law]]]
AGREEMENT AND MORTGAGE
WHEREAS, the [______________] (hereinafter called Mortgagor) has applied to,
received, and accepted from the United States Department of Commerce, Economic
Development Administration (EDA) [include agency addresses as necessary and appropriate] a
grant under the Public Works and Economic Development Act of 1965 (41 U.S.C. § 3121 et
seq.) (PWEDA) in the amount of [$___________] Dollars (EDA Grant Amount) pursuant to a
Financial Assistance Award dated [__________], and bearing EDA Award No. [____________]
(Award);
WHEREAS, pursuant to the application submitted by Mortgagor requesting said Award,
which includes all forms, documentation, and any information submitted to EDA as part and in
furtherance of the request for the Award, including any information submitted after the initial
application (Grant Application) and pursuant to the Award, the Grant Amount is to be used for
the purpose of acquiring or making improvements to the real property described in Exhibit A,
attached hereto and made a part hereof (Project Property), consisting of
[_____________________________________________________________________________
______________________________________________________________________________
__________________________________________________] (Project);
WHEREAS, [_____] years from the [trigger date (e.g., date of award, construction end
date, etc.)], as determined by EDA, is the Estimated Useful Life, as defined in 13 C.F.R. § 314.1,
of the improvements made to the Project Property pursuant to the Project;
WHEREAS, under government-wide regulations set out at 2 CFR part 200 and EDA’s
regulations governing the Award at 13 CFR Chapter III, any transfer or conveyance of Project
Property or any portion thereof must have the prior written approval of EDA;
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WHEREAS, in accordance with PWEDA, EDA is not authorized to permit transfer or
conveyance of Project Property to parties that are not eligible to receive EDA grants unless EDA
is repaid the Federal Share as defined at 13 CFR § 314.5 (“Federal Share”) or unless the
authorized purpose of the Award is to develop land in order to lease or sell it for a specific use, in
which case EDA may authorize a lease or sale of the Project Property or a portion thereof if
certain conditions are met;
WHEREAS, the aforesaid Award from EDA provides the purposes for which the Grant
Amount may be used and provides, inter alia, that Mortgagor will not sell, lease, mortgage, or
otherwise use or alienate any right to, or interest in the Project Property, or use the Project
Property for purposes other than or different from those purposes set forth in the Award and the
Grant Application made by Mortgagor therefor, such alienation or use being prohibited by
13 CFR part 314 and 2 CFR part 200; and
WHEREAS, Mortgagor and EDA desire to establish an obligation for and first priority
lien [or other priority position, as approved by EDA] on Project Property in favor of EDA in the
event that the Project Property is used, transferred, or alienated in violation of the Award,
13 CFR Chapter III, or 2 CFR part 200;
NOW THEREFORE, Mortgagor does hereby grant and convey unto EDA, its successors
and assigns, a mortgage and a lien on said Project Property to secure Mortgagor’s obligation (i)
to comply with the terms and conditions of the Award and the regulations set forth in
13 CFR Chapter III and 2 CFR part 200, and (ii) to use Project Property only for the purposes set
forth therein for the Estimated Useful Life of Project Property. Mortgagor agrees that a debt,
with interest thereon at the rate set forth in 31 U.S.C. § 3717, in the amount of the Federal Share,
which amount shall be determined at the sole discretion of EDA in accordance with its
authorities and regulations, such amount being either EDA’s pro-rata share of the fair market
value of the Project Property, as further set forth at 13 CFR § 314.5, as that provision may be
amended from time, the Grant Amount, or the amount actually disbursed under the Award
(Indebtedness), shall be due and payable by Mortgagor to EDA upon the termination of the
Award, or any attempt to use, transfer, or alienate any interest in Project Property in violation of
the Award or of the regulations set forth in 13 CFR Chapter III or 2 CFR part 200 and does,
moreover, agree that such Indebtedness shall be extinguished only through the full payment
thereof to the Federal Government.
Mortgagor further covenants and agrees as follows:
1.

Lease of Project Property:

If the Grant Application provides for and the Award authorizes Mortgagor to lease
Project Property, each lease arrangement shall be subject to the prior written approval of EDA.
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EDA must determine that the applicable lease arrangement is consistent with the Grant
Application and authorized general and special purpose(s) of the Award; will provide adequate
employment and economic benefits for the area in which Project Property is located; is
consistent with EDA policies concerning, but not limited to, non-discrimination, non-relocation,
and environmental requirements; and that the proposed lessee is providing adequate
compensation, as defined in 13 CFR § 314.1, to Mortgagor for said lease. Any lease agreement
entered into by Mortgagor of the Project Property shall be subordinate, junior, and inferior to this
Agreement and Mortgage, and, at EDA’s request, be expressly subordinated in writing and the
written subordination recorded in the same manner as this Agreement and Mortgage [Note that if
a Recipient objects to this provision because there’s no record notice of the lease, the last
sentence of this provision can be modified.]
2.

Charges; Liens:

Mortgagor shall protect the title and possession of all Project Property; pay when due all
taxes, assessments, mechanic and/or materialmen liens, and other charges, fines, and impositions
now existing or hereafter levied or assessed upon Project Property; and preserve and maintain the
priority of the lien hereby created on Project Property, including any improvements hereafter
made a part of the realty.
3.

Hazard Insurance:

Mortgagor shall insure and keep insured all improvements now or hereafter created upon
Project Property against loss or damage by fire and windstorm and any other hazard or hazards
included within the term “extended coverage.” The amount of insurance shall be the full
insurable value of said improvements but in no event less that the full replacement value of the
improvements. Any insurance proceeds received by Mortgagor due to loss shall be applied to
restoration or repair of any damaged Project Property, provided such restoration or repair is
economically feasible and the security of this Agreement and Mortgage is not thereby impaired.
If such restoration or repair is not economically feasible or if the security of this Agreement and
Mortgage would be impaired, Mortgagor shall use said insurance proceeds to compensate EDA
for its Federal Interest. EDA’s Federal Interest, as defined at 13 C.F.R. § 314.2 (“Federal
Interest”) shall be satisfied when amount received is equal to the Federal Share as that term is
defined at 13 CFR § 314.5 (“Federal Share”).
4.

Preservation and Maintenance of the Project Property:

Mortgagor shall keep Project Property in good condition and repair during the Estimated
Useful Life and shall not permit or commit any waste, impairment, or deterioration of Project
Property, but shall give notice written thereof to EDA without delay.
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5.

Indemnification

To the extent permitted by law, Recipient agrees to indemnify and hold the Federal
Government harmless from and against all liabilities that the Federal Government may incur as a
result of providing an award to assist, directly or indirectly, in the preparation of the Project
Property or construction, renovation, or repair of any facility on the Project Property, to the
extent that such liabilities are incurred because of toxic or hazardous contamination of
groundwater, surface water, soil, or other conditions caused by operations of the Recipient or any
of its predecessors (other than the Federal Government or its agents) on the Project Property. See
also 13 C.F.R. § 302.19 (“Indemnification”).
6.

Inspection:

EDA may make or cause to be made reasonable entries upon and inspection of Project
Property by EDA or an authorized representative of EDA.
7.

Condemnation:

The proceeds of any award or claim for damages, direct or consequential, in connection
with any condemnation or other taking of Project Property, or any part thereof, or for any
conveyance in lieu of condemnation shall be used by Mortgagor to compensate EDA for EDA’s
Federal Share. EDA’s Federal Share of said condemnation proceeds shall be equal to that
percentage which the Grant Amount bore to the total project costs under the Award for which the
condemned property was acquired or improved. See also 13 CFR § 314.5 (“Federal Share”).
8.

Recording of Agreement and Mortgage – Mortgagor’s Copy:

Mortgagor shall record this Agreement and Mortgage in accordance with the laws and
rules of the County where Project Property is located, and shall ensure that the lien hereby
granted is a first and prior lien on Project Property senior to all other interests save those which
may arise by operation of law [or other priority position as approved by EDA]. EDA shall be
furnished with the original, recorded Agreement and Mortgage as executed.
9.

Notice:

Any notice from EDA to Mortgagor provided for in this Agreement and Mortgage shall
be sent by certified mail to Mortgagor’s last known address or at such address as Mortgagor may
designate to EDA, except for any notice given to Mortgagor in the manner as may be prescribed
by applicable law as provided hereafter in this Mortgage. Likewise, any notice from Mortgagor
to EDA shall be sent by certified mail to EDA’s address.

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10.

Remedies:

Upon Mortgagor’s breach of any term or condition of the Award or any provision of this
Agreement and Mortgage, then EDA, its designees, successors, or assigns may declare the
Indebtedness immediately due and payable, and may enforce any and all remedies available
including but not limited to foreclosure by an action brought either in a United States District
Court or in any State Court having jurisdiction, but such action shall not be deemed to be a
release or waiver of any other right or remedy to recover repayment thereof.
After any breach on the part of Mortgagor, EDA shall, upon bill filed or the proper legal
proceedings being commenced for the foreclosure of this Agreement and Mortgage, be entitled,
as a matter of right, to the appointment by any competent court, without notice to any party, of a
receiver of the rents, issues, and profits of Project Property, with power to lease and control such
Property, and with such other powers as may be deemed necessary.
11.

Remedies Cumulative:

All remedies provided in this Agreement and Mortgage are distinct and cumulative to any
other right or remedy under this Agreement and Mortgage, the Award, or related documents, or
afforded by law or equity, and may be exercised concurrently, independently or successively.
12.

Forbearance Not a Waiver:

Any forbearance by EDA in exercising any right or remedy hereunder, or otherwise
afforded by applicable law, shall not be a waiver of or preclude the exercise of any right or
remedy. The procurement of insurance or the payment of taxes or other liens or charges by EDA
shall not be a waiver of EDA’s rights under this Agreement and Mortgage.
13.

Release:

EDA and the Mortgagor agree that, so long as the possession and use of Project Property
by Mortgagor has been only for the purposes set forth in the Award and Grant Application, then
after the Estimated Useful Life of the improvements to Project Property, Mortgagor may request
a release of the Federal Interest in accordance with 13 CFR part 314, which will not be withheld
except for good cause, as determined in EDA’s sole discretion; provided, however, that in
accordance with 13 CFR part 314, restrictions upon the religious use or discriminatory practices
in connection with the use of Project Property shall survive this Agreement and Mortgage and
any release thereof, which shall be evidenced by a separate recorded covenant.
14.

Governing Law; Severability:

This Agreement and Mortgage shall be governed by applicable federal law, if any, and if
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there is no applicable federal law by state law, and nothing contained herein shall be construed to
limit the rights the EDA, its designees, successors, or assigns are entitled to under applicable
federal or state law. In the event that any provision or clause of this instrument conflicts with
applicable law, such conflict shall not affect other provisions of this instrument which can be
given effect without the conflicting provision, and to this end the provisions of this instrument
are declared to be severable.
15.

Authority to Execute Agreement and Mortgage:

Recipient represents and warrants to and covenants with EDA that Recipient has been
duly authorized by Recipient’s governing body by all necessary action and has received all
necessary third party consents to enter into this Agreement and Mortgage.
[Optional: 16.
If EDA approves and enters into an Intercreditor Agreement with
one or more Creditor under which EDA shares a first priority lien position with said creditors, a
default in the shared mortgage shall constitute a default under this Agreement and Mortgage.]
IN WITNESS WHEREOF, Mortgagor has hereunto set its hand and seal on this the ___
day of _____________________, 20__.

ATTEST:

Mortgagor

By: ___________________________

By: __________________________

Title: ____________________________

Its: __________________________

Approved: ________________________
Attorney for Mortgagor

[Optional depending on RO:
“This approval by Mortgagor’s counsel shall be in addition to and in no way a
restriction or limitation of said Attorney’s separate written legal opinion regarding
this Agreement and Mortgage.]
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this space for acknowledgment

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EXHIBIT A
Property Description

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