Model of agreement on mortgage of right to reclaim a debt

Model of agreement on mortgage of right to reclaim a debt in accordance with Vietnamese laws on security transactions.

Mortgage Agreement of right to recliam a debt (Model)

No.

This Mortgage Agreement (this “Agreement”) is entered into on October 20th, 2014 by and between:

(1)  A (the “Mortgagee”)

Head office:
Represented by:
- Passport No.:
- Position:  .

(2) B (the “Mortgagor”)

Head office:
Represented by:
- Passport No.:
- Position: 

; and
     
(3)  C (the “Debtor”)

Head office:
Represented by:
- Passport No.:
- Position: 

The Mortgagee, the Mortgagor and the Debtor are hereinafter referred to as the “Parties”, collectively, and as “Party”, individually.

RECITALS

WHEREAS:

A. The Mortgagee agrees to grant the Mortgagor a loan in an aggregate principal amount of VND21,000,000,000.00 (in words: VN dongs twenty one billion only) (the “Loan”) pursuant to the loan agreement executed by the Parties as dated October 20th, 2014 on the attached Loan Agreement No…. (the “Loan Agreement”);

B. Pursuant to the Sale Agreement to be executed by and between the Mortgagor and the Debtor or any other legal instruments equivalent to the Sale Agreement (the “Sale Agreement”), the Mortgagor will be entitled to the right to reclaim debt from the Debtor (the “Credit”) ;

C. For the purpose of securing the obligations of the Mortgagor to the Mortgagee under the Loan Agreement (the “Obligations”), the Mortgagor agrees to mortgage 100% of the Credit (the “Mortgage”) to the Mortgagee pursuant to the terms and conditions contained herein.

NOW, THEREFORE, it is agreed as follows:

ARTICLE 1. Establishment of Mortgage

1.1 The Mortgagor hereby mortgages its rights, title and interests in the Credit to be created during the term of this Agreement (as set forth in Article 7) to the Mortgagee as security for the due and punctual payment of the Obligations by the Mortgagor to the Mortgagee pursuant to the Loan Agreement.  The effectiveness of this Mortgage shall be also applicable to the equivalents to the Credit such as the Mortgagor’s reclaim for compensation against the Debtor in the event of the Debtor’s non-payment of the Credit.

1.2 The Debtor hereby accepts such mortgage of the Credit as set forth in Article 1.1.

1.3 The Mortgagor hereby undertakes to register the mortgage of the Credit under this Agreement with the relevant registrar office or the National Registration Agency for Secured Transactions (the “NRAST”) and deliver the certificate of such registration to the Mortgagee within three (3) working days from the date hereof.

ARTICLE 2. Mortgagor’s Representations and Warranties

The Mortgagor hereby represents and warrants to the Mortgagee the following as of the date hereof:

(a) The Mortgagor and the Debtor, respectively, are corporations duly organized and validly existing under the applicable law in Vietnam;

(b) The Mortgagor and the Debtor, respectively, have full legal right,  power and authority to perform and observe the terms and conditions hereof and have obtained all authorization, approvals and consents from all the governmental authorities in any relevant jurisdictions or any third parties necessary for the execution, delivery and performance of this Agreement;

(c) The Credit, which is enforceable under the relevant laws of Vietnam, has been created by legitimate business operations and transactions by and between the Mortgagor and the Debtor, and is not subject to any grounds for invalidity or revocation;

(d) The Mortgagor and the Debtor, respectively, have not agreed to amend, dispose of, transfer, or mortgage the Credit or any part thereof or any of its rights, title and interest therein and thereto.  There is no court-ordered act or prohibition against the Credit, and the Credit is free from any and all encumbrances;

(e) The Mortgagor and the Debtor, respectively, have not breached any terms and conditions of the Supply Agreement, and the Supply Agreement is not subject to any ground for termination by either Party;

(f) The execution and performance of this Agreement have been duly authorized by the Mortgagor and the Debtor, and are not in conflict with any applicable law or any other agreement or undertaking by which the Parties are bound.

ARTICLE 3. Covenants of the Mortgagor and the Debtor

3.1 The Mortgagor and the Debtor agree that any portions of the Credit due after the signing this Agreement shall be fully paid into the bank account opened by the Mortgagee (the “Credit Account”).

Type of Account Account Number Bank
Ordinary Deposit (USD) 
Ordinary Deposit (VND) 

3.2 The Mortgagor and the Debtor shall not modify, waive, assign, transfer, further mortgage or otherwise encumber the Credit, and shall not seek a waiver of repayment or early repayment.

3.3 In the event that an occurrence of any Triggering Event as set forth in Article 4.1 below is reasonably anticipated or is believed to be imminent, the Mortgagor and the  Debtor shall notify the Mortgagee of such.

3.4 The Mortgagor and the Debtor shall, upon the Mortgagee’s request, update the Mortgagee on the implementation status of the Supply Agreement and the status of the Credit from time to time.

ARTICLE 4. Enforcement of the Mortgage

4.1 Upon occurrence of any of the following events (the “Triggering Event”), the Mortgagee shall become entitled to enforce the Mortgage:

(a) Any Triggering Event as set forth in Article [8] in the Loan Agreement occurs;

(b) The Mortgagor fails to pay interest on the principal of the Loan as set forth in the Loan Agreement for fourteen (14) consecutive days;

(c) The Mortgagor delays or breaches the Obligations as set forth in the Loan Agreement ;

(d) The Mortgagor or the Debtor is in breach of the Representations and Warranties in Article 2, Covenants in Article 3 or any other obligations hereof ;

(e) Commencement of an injunctive relief or other relief or proceeding by any third parties with respect to the Credit under the laws ;

(f) The Mortgagee determines that there is any variation of the rights attaching to or conferred by all or any part of the assets of the Mortgagor or the  Debtor in any manner which would reasonably be expected to materially prejudice the value of, or the ability of the Mortgagee to realize the Mortgage over the Credit.

(g) Major corporate changes such as a change of majority shareholders and commencement of any mergers, dissolution, reorganization, winding-up, business suspension or similar proceeding with respect to the Mortgagor or the  Debtor under the bankruptcy, insolvency, liquidation, reorganization and other similar law;

4.2 In order for the Mortgagee to enforce the Mortgage, the Mortgagee may be entitled to the Credit by serving a written notice stipulating a legitimate ground for the enforcement and the intent of acquiring the Credit (the “Credit Transfer Notice”), transfer the Credit, at its own discretion, to a third party, or do otherwise under the relevant laws of Vietnam.

4.3 The Mortgagor and the  Debtor agree that the Credit shall be transferred to the Mortgagee upon the enforcement of the Mortgage and the Mortgagee, for and on behalf of the Mortgagor, is entitled to serve the Credit Transfer Notice in accordance with Article 4.2. 

4.4 The Mortgagee shall have full legal right, power and authority to any and all portions of the Credit due after the Credit Transfer Notice is served, and the  Debtor shall pay such amount to a bank account via wire-transfer to be designated by the Mortgagee.

4.5 Even after the transfer of the Credit, the Mortgagor’s Obligations under the Loan Agreement shall not be waived, and the Mortgagee is entitled to continue to have the right to the reclaim for the Obligations from the Mortgagor.  Provided, however, that ant portions of the Credit or the Obligations paid by the Mortgagor or the  Debtor shall be deducted.

ARTICLE 5. Expenses

The Mortgagor shall be liable for any and all costs and expenses (including litigation
costs and attorney’s fees) incurred in connection with the establishment and registration
of the Mortgage, takeover of the Credit following the enforcement of the Mortgage and
the Mortgagor’s claim for the Credit from the Debtor.

ARTICLE 6. Assignment

6.1 The Mortgagor and the Debtor, respectively, without a written permission by the Mortgagee, shall not assign or transfer any of their rights or obligations hereunder to any person.

6.2 The Mortgagee may, in accordance with applicable laws, at any time assign all or any part of its rights or obligations of such Mortgagee to any person.

ARTICLE 7. Termination and Release of Mortgage

The term of this Agreement shall begin on the date of this Agreement and end on the date on which all Obligations shall have been unconditionally and irrevocably paid and discharged in full. Upon termination of this Agreement, the Mortgagee shall release the Mortgage to the Mortgagor and take other actions as may be reasonably requested by the Mortgagor to effectuate the discharge of security given under this Agreement.

ARTICLE 8. Miscellaneous

8.1 Confidentiality.  Each Party (the “Recipient”), except with the prior written permission of the other Parties, at all times hold in confidence and trust and not use or disclose to any person or entity any information of the other Parties (the “Confidential Information”).  But, the Confidential Information shall exclude the following information:

(a) was or becomes publicly known and generally available in the public domain prior to the time of disclosure by the Recipient, provided that the Recipient did not cause such Confidential Information to be so known or so available in breach of this Agreement;

(b) was already in the possession of the Recipient at the time of disclosure by the other Parties, provided that the Recipient did not obtain such Confidential Information in violation of any applicable law or this Agreement;

(c) was obtained by the Recipient from a third party, provided that such third party did not obtain or disclose such Confidential Information in violation of any applicable law or any obligation of confidentiality on the part of such third party Agreement;

(d) is required by any laws, any court or other government authority ;

(e) is required for its major shareholders, directors, managers, employees, auditors or professional advisors so far as they need to know the Confidential Information for proper performance of their duties in relation to this Agreement.

8.2 Notice.  Each notice or other communication to be give or made under this Agreement shall be in writing and delivered or sent in person or by facsimile. e-mail, courier or registered mail to the relevant Party at its address or fax number set out below.  For notices or communication sent by facsimile, the time of receipt shall be deemed to be the exact time displayed in the corresponding transmission record.  For those sent by email, the time of receipt shall be deemed to be as recorded in the email message in question evidencing the receipt of the relevant message.  For those sent by registered airmail, the date of receipt shall be deemed to be the recorded date of the recipient’s signature upon dispatch.  Provided, however, that if such day is not a Banking Day in the place to which it is sent, such notice or other communication shall be deemed delivered on the following Banking Day at such place.

(a) To the Mortgagee
Address: 
Tel No:  
Fax No:  
Attention:  
Email: 

(b) To the Mortgagor
Address: 
Tel No:  
Fax No:   [•]
Attention:  
Email: 

(c) To the  Debtor
Address: 
Tel No:  
Fax No:  
Attention:  
Email: 

8.3 Entire Agreement.  This Agreement constitutes the full and entire understanding and agreement between the Parties with regard to the subjects hereof and supersedes and replaces any prior written or oral understandings or representations.

8.4 Severability.  If any provision of this Agreement becomes or is declared by a court of competent jurisdiction to be illegal, unenforceable or void, portions of such provision, or such provisions in its entirety, to the extent necessary, shall be severed from this Agreement, and such court will replace such illegal, void or unenforceable provision of this Agreement with a valid and enforceable provision that will achieve, to the extent possible, the same economic, business and other purposes of the illegal, void or unenforceable provision.  The balance of this Agreement shall be enforceable in accordance with its terms.

8.5 Governing Law.  This Agreement and the rights and obligations of the Parties hereunder shall be governed by and construed in accordance with the laws of Vietnam. 

8.6 Dispute Resolution.  Any dispute arising between the Parties to this Agreement shall be referred to and finally resolved by arbitration by the Vietnamese International Arbitration Center (the “VIAC”).  The tribunal shall consist of three (3) arbitrators.  The language of the arbitration shall be English and the venue of the arbitration shall be Ho Chi Minh City, Vietnam.

8.7 Language.  Each Party shall execute four (4) originals of this Agreement in each of the English language and the Vietnamese language.  Each Party shall keep one (1) originals of each version and one (1) originals shall be submitted at the NRAST.  In case there is at any time any inconsistency, discrepancy or conflict in interpretation of the provisions between the English and the Vietnamese version, the English version shall prevail.

[Signature Page to Follow]

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the day and year first above written.

Mortgagee:

By: _________________________
Name:
Title:

Mortgagor:

By: _________________________
Name:
Title:

Debtor:

By: _________________________
Name:
Title: