AMORTIZATION
The reduction of a debt incurred, for example, in the purchase of stocks or bonds, by regular payments consisting of interest and part of the principal made over a specified time period upon the expiration of which the entire debt is repaid. A mortgage is amortized when it is repaid with periodic payments over a particular term. After a certain portion of each payment is applied to the interest on the debt, any balance reduces the principal.
The allocation of the cost of an intangible asset, for example, a patent or COPYRIGHT, over its estimated useful life that is considered an expense of doing business and is used to offset the earnings of the asset by its declining value. If an intangible asset has an indefinite life, such as good will, it cannot be amortized.
Amortization is not the same as deprecia-
tion, which is the allocation of the original cost
of a tangible asset computed over its anticipated
useful life, based on its physical wear and tear
and the passage of time. Amortization of intan-
gible assets and depreciation of tangible assets
are used for tax purposes to reduce the yearly
income generated by the assets by their decreas-
ing values so that the tax imposed upon the
earnings of assets is less. Amortization differs
from depletion, which is a reduction in the book
value of a natural resource, such as a mineral,
resulting from its conversion into a marketable
product. Depletion is used for a similar tax pur-
pose as amortization and depreciation—to
reduce the yearly income generated by the asset
by the expenses involved in its sale so that less tax will be due.
Amortization Provision with an Acceleration Clause
THIS INDENTURE, made as of the _____ day of ____________, 20__, by and between __________________________, (Mortgagor), and
____________________________________, (Mortgagee).
AMOUNT OF LIEN:
WHEREAS, Mortgagor is justly indebted to Mortgagee in the sum of __________ dollars ($ ____) and has agreed to pay the same, with
interest thereon, according to the terms of a certain note (Note) given by Mortgagor to Mortgagee, which is attached hereto as Exhibit A.
DESCRIPTION OF PROPERTY SUBJECT TO LIEN:
NOW, THEREFORE, in consideration of the premises and the sum set forth above, and to secure the payment of the Secured Indebtedness
as defined herein, Mortgagor by these presents does grant, bargain, sell and convey unto Mortgagee the property located at
_____________________________________________________________________________________________________________,
more particularly described as:
Together with all buildings, structures and other improvements now or hereafter located on, above or below the surface of the property; and,
Together with all the common elements appurtenant to any parcel, unit or lot which is all or part of the Premises; and,
ALL the foregoing encumbered by this Mortgage being collectively referred to herein as the Premises;
TO HAVE AND TO HOLD the Premises hereby granted to the use, benefit and behalf of the Mortgagee, forever. Conditioned, however, that if
Mortgagor shall promptly pay or cause to be paid to Mortgagee, at its address listed in the Note, or at such other place, which may
hereafter be designated by Mortgagee, its successors or assigns, with interest, the principal sum of ___________ dollars ($______) with
final maturity, if not sooner paid, as stated in said Note unless amended or extended according to the terms of the Note executed by
Mortgagor and payable to the order of Mortgagee, then these presents shall cease and be void, otherwise these presents shall remain in
full force and effect.
COVENANTS OF MORTGAGOR
Mortgagor covenants and agrees with Mortgagee as follows:
Secured Indebtedness. This Mortgage is given as security for the Note and also as security for any and all other sums, indebtedness,
obligations and liabilities of any and every kind arising, under the Note or this Mortgage, as amended or modified or supplemented from
time to time, and any and all renewals, modifications or extensions of any or all of the foregoing (all of which are collectively referred to
herein as the Secured Indebtedness), the entire Secured Indebtedness being equally secured with and having the same priority as any
amounts owed at the date hereof.
Performance of Note, Mortgage, Etc. Mortgagor shall perform, observe and comply with all provisions hereof and of the Note and shall
promptly pay, in lawful money of the United States of America, to Mortgagee the Secured Indebtedness with interest thereon as provided
in the Note, this Mortgage and all other documents constituting the Secured Indebtedness.
Extent Of Payment Other Than Principal And Interest. Mortgagor shall pay, when due and payable, (1) all taxes, assessments, general or
special, and other charges levied on, or assessed, placed or made against the Premises, this instrument or the Secured Indebtedness or
any interest of the Mortgagee in the Premises or the obligations secured hereby; (2) premiums on policies of fire and other hazard
insurance covering the Premises, as required herein; (3) ground rents or other lease rentals; and (4) other sums related to the Premises or
the indebtedness secured hereby, if any, payable by Mortgagor.
Care of Property. Mortgagor shall maintain the Premises in good condition and repair and shall not commit or suffer any material waste to
the Premises.
Prior Mortgage. With regard to the Prior Mortgage, Mortgagor hereby agrees to: (1) Pay promptly, when due, all installments of principal
and interest and all other sums and charges made payable by the Prior Mortgage; (2) Promptly perform and observe all of the terms,
covenants and conditions required to be performed and observed by Mortgagor under the Prior Mortgage, within the period provided in
said Prior Mortgage; (3) Promptly notify Mortgagee of any default, or notice claiming any event of default by Mortgagor in the performance
or observance of any term, covenant or condition to be performed or observed by Mortgagor under any such Prior Mortgage. (4)
Mortgagor will not request nor will it accept any voluntary future advances under the Prior
Mortgage without Mortgagee’s prior written consent, which consent shall not be unreasonably withheld.
DEFAULTS
Default. The occurrence of any one of the following events which shall not be cured within _________ days after written notice of the
occurrence of the event, if the default is monetary, or which shall not be cured within _________ days after written notice, if the default is
non-monetary, shall constitute an Event of Default: (1) Mortgagor fails to pay the Secured Indebtedness, or any part thereof, or the taxes,
insurance and other charges, as herein before provided, when and as the same shall become due and payable; (2) Any material warranty of
Mortgagor herein contained, or contained in the Note, proves untrue or misleading in any material respect; (3) Mortgagor materially fails
to keep, observe, perform, carry out and execute the covenants, agreements, obligations and conditions set out in this Mortgage, or in the
Note; (4) Foreclosure proceedings (whether judicial or otherwise) are instituted on any mortgage or any lien of any kind secured by any
portion of the Premises and affecting the priority of this Mortgage.
Upon the occurrence of any Event of Default, the Mortgagee may immediately do any one or more of the following: (1) Declare the total
Secured Indebtedness, including without limitation all payments for taxes, assessments, insurance premiums, liens, costs, expenses and
attorney’s fees herein specified, without notice to Mortgagor (such notice being hereby expressly waived), to be due and payable at once,
by foreclosure or otherwise; (2) In the event that Mortgagee elects to accelerate the maturity of the Secured Indebtedness and declares the
Secured Indebtedness to be due and payable in full at once as provided for herein, or as may be provided for in the Note, then Mortgagee
shall have the right to pursue all of Mortgagee’s rights and remedies for the collection of such Secured Indebtedness, whether such rights
and remedies are granted by this Mortgage, any other agreement, law, equity or otherwise, to include, without limitation, the institution of
foreclosure proceedings against the Premises under the terms of this Mortgage and any applicable state or federal law.
MISCELLANEOUS PROVISIONS
Prior Liens. Mortgagor shall keep the Premises free from all prior liens (except for those consented to by Mortgagee).
Notice, Demand and Request. Every provision for notice and demand or request shall be deemed fulfilled by written notice and demand or
request delivered in accordance with the provisions of the Note relating to notice.
Severability. If any provision of this Mortgage shall, for any reason and to any extent, be invalid or unenforceable, the remainder of the
instrument in which such provision is contained, shall be enforced to the maximum extent permitted by law.
Governing Law. The terms and provisions of this Mortgage are to be governed by the laws of the State of __________. No payment of
interest or in the nature of interest for any debt secured in part by this Mortgage shall exceed the maximum amount permitted by law.
Descriptive Headings. The descriptive headings used herein are for convenience of reference only, and they are not intended to have any
effect whatsoever in determining the rights or obligations of the Mortgagor or Mortgagee and they shall not be used in the interpretation or
construction hereof.
Attorney’s Fees. As used in this Mortgage, attorneys’ fees shall include, but not be limited to, fees incurred in all matters of collection and
enforcement, construction and interpretation, before, during and after suit, trial, proceedings and appeals. Attorneys’ fees shall also include
hourly charges for paralegals, law clerks and other staff members operating under the supervision of an attorney.
Exculpation. Notwithstanding anything contained herein to the contrary, the Note which this Mortgage secures is a non-recourse Note and
such Note shall be enforced against Mortgagor only to the extent of Mortgagor’s interest in the Premises as described herein and to the
extent of Mortgagor’s interest in any personalty as may be described herein.
IN WITNESS WHEREOF, the Mortgagor has caused this instrument to be duly executed as of the day and year first above written.
_______________________________
Mortgagor
STATE OF )
COUNTY OF )
Subscribed and sworn before me this the ______ day of _______________________, 20_____.
Witness my hand and seal.
_____________________________________________ My commission expires:
Notary Public
Warning:
These forms are provided AS IS. They may not be any good. Even if they are good in one jurisdiction, they may not work in another.
And the facts of your situation may make these forms inappropriate for you. They are for informational purposes only, and you should
consult an attorney before using them.
