AGENCY AGREEMENT
This Agreement is made on the 27th day of December, 2000 between NewState Second Mortgage SPC (hereinafter referred to as the “Principal”) and H&CB (hereinafter referred to as the “Agent”) for the purpose of entrusting certain business operations of the Principal to the Agent in accordance with Article 23 of the Asset Liquidation Law (the “Law”).
Article 1: Definitions
The following terms when used in this Agreement shall have the following respective meanings:
"Escrow Account" shall mean the Principal's account opened with the Agent pursuant to Article 11(1) of this Agreement or its replacement account.
"Collateral" shall mean the houses in which NewState Capital Co., Ltd. has established security interests as collateral for the liquidation assets.
“Liquidation Plan” shall mean the asset liquidation plan which the Principal filed with the Financial Supervision Commission.
“Liquidation Asset” shall mean all rights for payment including principal and interest on loans, late charges, commissions and other ancillary rights held by NewState Capital Co., Ltd. which will be transferred to the Principal pursuant to asset transfer agreement.
"Asset Liquidation Settlement Date" shall mean November 14, 2000.
“Asset Backed Securities or ABS” shall mean the 1st and 2nd class priority bonds and the 1st and 3rd class non-priority bonds to be issued by the Principal according to the Liquidation Plan.
“ABS Quarter” shall mean each period of three (3) months counting from the date of the issuance of ABS. ABS Quarter, other than the initial ABS Quarter, shall commence on the last day of the immediate previous ABS Quarter.
"Asset Management Business" shall mean the business entrusted to the Asset Manager in accordance with Article 2 of the Asset Management Agreement.
"Asset Management Agreement" shall mean the agreement made between the Principal and NewState Capital Co., Ltd. on December 27, 2000 for the purpose of management, operation and disposition of Liquidation Asset in connection with the asset liquidation in accordance with the Liquidation Plan.
"Asset Manager" shall mean NewState Capital Co., Ltd.
Page 1"Asset Transfer Agreement" shall mean the agreement for transfer of assets made between the Principal and NewState Capital Co., Ltd. on December 27, 2000 in connection with the Asset Liquidation in accordance with the Asset Liquidation Plan.
“Debtor” shall mean the principal debtor, guarantor and others who are liable to perform the obligations on the liquidated assets.
“Installment Housing Financing Agreement” shall mean the agreement applicable to the underlying liquidation assets including the financing agreement made between the transferor and the debtor on the liquidated asset and the standard financing transaction regulations of the transferor.
Article 2: Entrusted Business
The Principal entrusts to the Agent all the Principal’s businesses except for those which require the resolution of the meeting of the members of the Principal, or which are under the exclusive jurisdiction of the Principal’s director, or which have been entrusted to the Asset Manager pursuant to the Asset Management Agreement.
Article 3: Notice and Publication
(1) When necessary, the Agent shall give notices to the members of the Principal in accordance with the Principal's Articles of Incorporation.
(2) The same applies to publications under this Agreement.
Article 4: Roster of Members
(1) The Agent shall maintain the roster (the "Roster") of the members of the Principal containing the addresses and numbers of investment units.
(2) The Agent shall be responsible for receiving requests for transfer of title and entering the same into the Roster.
(3) The Agent shall be responsible for receiving from the Principal’s members or their representatives reports on the name, address, specimen seal and changes thereto and maintaining the same.
Article 5: Meeting of the Members
(1) For the meeting of the Principal's members, the Agent shall give notice to the Principal's members or their designees containing the agenda, date, time and the place of the meeting.
(2) The Agent shall receive and organize documentary resolutions of the members and deliver same to the Principal.
Page 2(3) The Agent shall prepare the minutes of the meetings of the members, obtain the signatures of the chairman and director, maintain same and give copies of same to the members, when requested.
Article 6: Registration In Accordance With Asset Liquidation Law
(1) The Agent shall be responsible for the registration in the event the Principal is required to do so under the Law. Provided, however, that the registration of the Liquidation Plan shall be the responsibility of LG Investment and Securities Co., Ltd. which is the underwriter of the Principal's ABS.
(2) In the event the Principal is required to be examined or to submit documents under the Law, the Agent shall do acts necessary for the benefit of the Principal.
(3) The Agent shall keep and maintain copies of all agreements, registrations and other proofs and, when requested, offer same for the inspection of Financial Supervision Commission or ABS investors.
Article 7: Financial Statements, etc.
The Agent shall have the Asset Manager prepare, submit, keep and maintain all financial statements and records in accordance with the Asset Management Agreement.
Article 8: Business Report, Tax Return, etc.
(1) On behalf of the Principal, the Agent shall prepare and submit business reports, bi-annual reports and other documents as required by the securities laws.
(2) On behalf of the Principal, the Agent shall submit necessary documents to the tax offices or other governmental departments.
Article 9: Management of the Liquidation Asset
(1) Upon receipt of notice of occurrence of causes for redemption in accordance with Article 7(1) of the Asset Transfer Agreement, the Agent shall promptly notify the credit examination agency and, within five (5) business days of receipt of such a notice, demand redemption of Liquidation Asset pursuant to the provisions of the Asset Transfer Agreement.
(2) The Agent shall regularly examine and maintain the computerized data on collection status of Liquidation Asset when they are received from the Asset Manager in accordance with Article 7(5) of the Asset Management Agreement.
(3) The Agent shall, on behalf of the Principal, promptly notify the following to the Debtor in the event it performs substitute asset management business or a substitute asset manager is appointed in accordance with Article 7(5) of the Asset Management Agreement as a result of the rescission of the Asset Management Agreement:
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1. That the Asset Management Agreement between the Principal and the Asset Manager has been rescinded and, therefore, the Asset Manager no longer has the authority to receive payments;
2. The Agent or the substitute asset manager will be responsible for the return and management of the Liquidation Asset in the future replacing the Asset Manager; and
3. The Debtor should make the payments for principal and interest directly to the Receipt Management Account from now on.
(4) In the event the Asset Management Agreement is rescinded and the Agent takes over the substitute asset management business or a substitute asset manager is appointed in accordance with Article 10 of this Agreement, the Agent shall promptly notify LG Investment and Securities Co., Ltd. and the credit examination agency and take other measures as required by the Law.
(5) When the Agent deems it necessary for management of the Liquidation Asset, it shall have the right to demand NewState Capital Co., Ltd. to record transfer of mortgage on the Collateral to the Principal.
(6) The Agent shall deliver to the Principal any notices it may receive in connection with the ABS.
Article 10: Substitute Asset Management
(1) In the event of the occurrence of any causes set forth in Article 14(1) of the Asset Management Agreement, the Agent may immediately (I) rescind the Asset Management Agreement and become the substitute asset manager, or (ii) appoint itself or a third party a reserve substitute asset manager. Even after the Agent or a third party is appointed a reserve substitute asset manager, the Agent may rescind the Asset Management Agreement if the causes set forth in Article 14(1) of the Asset Management Agreement are not cured in which event the reserve substitute asset manager shall become the substitute asset manager.
(2) In the event the Agent becomes the reserve substitute asset manager or the substitute asset manager pursuant to Article 10(1) above, the Agent still shall have the right to appoint a third party as the reserve substitute asset manager or the substitute asset manager within the limits of continuity of the asset management business. In the event the third party becomes incapable of performing the business as the reserve substitute asset manager or the substitute asset manager, the Agent shall succeed the position of reserve substitute asset manager or the substitute asset manager.
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(3) The Agent shall staff sufficient number of personnel and secure an appropriate office space for the asset management business (including substitute asset management business) as set forth in Article 10(1) and (2) above.
(4) In the event the Agent performs the business pursuant to Article 10(1) and (2) above or a new reserve substitute asset manager or a substitute asset manager is appointed, the costs for necessary computerization or other preparatory work shall be borne by the Principal.
(5) The service fee for the substitute asset management shall be 0.25% of the outstanding balance of the ABS as of the first day of each ABS Quarter. Provided, however, in the event the outstanding balance of the priority ABS is less than a half of the total outstanding balance of the priority ABS, the service fee shall be 0.375%. The service fee for the reserve substitute asset manager shall not exceed 0.10% of the outstanding balance of the ABS as of the first day of each ABS.
Article 11: Escrow Account
(1) The Principal agrees to open an escrow account with the Agent for the purpose of managing payments for ABS and monies collected by Asset Manager.
(2) On the last day of each ABS Quarter, the Agent shall make the following payments out of the escrow account on behalf of the Principal. However, payments for fees for issuance of ABS (including legal fees, accounting fees, credit examination fees and underwriting fees) shall be made the next day following the issuance of ABS. In the event the following become due during the next ABS Quarter (except the last day of ABS Quarter), the payments shall be made out of the escrow account when they are due:
1. Corporate tax and other taxes of the Principal in accordance with Article 22 of the Law.
2. Service fee to the Asset Manager and other expenses
3. Service fee to the Agent and other expenses
4. The following ancillary expenses:
a. Fees to the credit examination agency
b. Fees and expenses to the accounting auditor
c. Legal fees and expenses not to exceed 20,000,000 Won per year
5. Interest on the 1st class priority ABS
6. Principal of the 1st class priority ABS
7. Other payments on the 1st class priority ABS including default interest and late charge
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8. Interest on the 2nd class priority ABS
9. Principal of the 2nd class priority ABS
10. Other payments on the 2nd class priority ABS including default interest and late charge
11. Interest on loans made pursuant to Article 13 of this Agreement
12. Principal of loans made pursuant to Article 13 of this Agreement
13. Other ancillary expenses of the Principal
14. Principal and interest on the 1st class non-priority ABS
15. All other payments to the 1st class non-priority ABS including default interest and late charge
16. Principal and interest on the 2nd class non-priority ABS
17. All other payments to the 2nd class non-priority ABS including default interest and late charge
18. Principal and interest on the 3rd class non-priority ABS
19. All other payments to the 3rd class non-priority ABS including default interest late charge
(3) Other than the above, the Agent shall not withdraw funds from the escrow account unless authorized by the Principal.
(4) The Principal shall not transfer or pledge the escrow account.
Article 12: Investment of Surplus Funds
(1) In the event the balance of the escrow account exceeds 105% ("Minimum Deposit Amount”) of the total expenses set forth in Article 11 (2) 1 through 5, 7, 8, 10 and 11, which are due at the end of each ABS Quarter, the Agent may invest the funds in the following manner:
1. Deposits with financial institutions with credit rating of AAA or above (including purchase of transferable CD)
2. Government or municipal bond with credit rate of AAA or above
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3. Bond with credit rating of AAA or above issued by government invested organizations in accordance with Government Invested Organizations Management Law
4. Corporate bond with credit rate of AAA or above or CP with credit rate of A1 or above
(2) Notwithstanding Article 12(1) above, in the event the principal and interest on the priority ABS have been fully paid off, the Agent may invest the surplus funds in products issued by financial institutions with credit rate of at least the highest credit rating of non-priority ABS.
(3) In the event the total surplus funds exceed One Billion Won as of 20 days prior to the close of an ABS Quarter, the Agent may prepay the principal of the priority ABS at the end of the ABS Quarter in units of One Billion Won or the amount of the principal if it is less than One Billion Won. In such an event, the Agent shall forthwith notify the Securities Depository Commission of the amount of principal and interest so prepaid and publish same in Naewoe Economics Newspaper.
(4) The prepayment as set forth in Article 12 (3) above shall be made in a fair manner among the ABS holders. The Agent shall be considered to have acted fairly if it has made the prepayment in compliance with the requirements in Article 12 (3).
(5) After the prepayment of the priority ABS, the Agent may prepay the non-priority ABS pursuant to its terms and conditions. In such an event, the Agent shall have the right to demand the Asset Manager to dispose of the all the remaining Liquidation Asset in accordance with Article 12 of the Asset Transfer Agreement and shall notify the Securities Depository Commission of the amount of principal and interest to be so prepaid and publish same in Naewoe Economics Newspaper no later than 20 days prior to the close of the ABS Quarter.
(6) The investments enumerated in Article 12 (1) above (“Qualified Investments”) shall mature prior to the priority ABS and the Agent shall determine the maturity of the Qualified Investments so that the funds necessary for payments set forth in Article 12 (2) may be secured on the previous business day of the payment date.
(7) In the event the credit rate of the products enumerated in Article 12 (1) above is downgraded, the Agent, after consultation with the Asset Manager, shall dispose of the product within 15 days and invest the funds in other Qualified Investments.
(8) The Agent shall not invest in the same product in excess of the following ratio:
1. (1) 1 and 2: 100% of the total of surplus funds and investment amount (purchase price of the Qualified Investments)
2. (1) 3: 80% of the above
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3. (1) 4: 30% of the above
(9) Notwithstanding Article 12 (8) above, the Agent may not invest more than 20% of the total of surplus funds and investment amount in (1) 4 Qualified Investments issued by one person or its subsidiaries (as defined in the Regulation of Monopoly and Fair Transaction Law).
(10) The Agent shall dispose of the Qualified Investments if the funds necessary to pay as set forth in Article 11 (2) are not secured on or prior to the previous business day of the payment date.
(11) The Agent shall immediately deposit the principal or interest on the Qualified Investments into the Receipt Management Account.
(12) The investments herein shall be made by the Agent on behalf of the Principal and under the name of the Principal. The Agent shall maintain books and records relevant to the investments and provide the Principal and the Asset Manager with information on the investment of surplus funds and Qualified Investments each month.
Article 13: Borrowing Funds
In the event the Receipt Management Account is not sufficient to make the payments for Article 11 (2) 1 through 11, the Principal, in consultation with the Agent, may borrow funds from the Agent or other institutions.
Article 14: Reports
(1) Within seven (7) business days after the close of the first ABS Quarter and each succeeding ABS Quarter, the Agent shall submit to the Principal and the Asset Manager reports, in the agreed upon forms, on the investment of surplus funds, the funding plan for the next ABS Quarter, other businesses entrusted to the Agent and other data and information reasonably requested by the Principal and Asset Manager.
(2) The Agent shall submit data reasonably requested by the credit examination agency in a timely manner.
Article 15: Liquidation
The Agent shall fully cooperate with the Principal in Principal’s liquidation including distribution of remaining property.
Article 16: Agent's Representations and Warranties
The Agent represents and warrants that:
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1. The Agent is duly organized and existing under the laws of the Republic of Korea and has all the power and authority to perform this Agreement in accordance with its provisions and for the benefit of the Principal.
2. The Agent has completed all the internal procedures and obtained all the governmental approvals and permits necessary for entering into and performing all the obligations under this Agreement.
Article 17: Fiduciary Duty of the Agent
(1) The Agent shall exercise a fiduciary duty in performing all the businesses entrusted under this Agreement.
(2) The Agent shall exercise the power and authority entrusted by the Asset Transfer Agreement and the Asset Management Agreement with the fiduciary duty.
Article 18: Damages
(1) The Agent covenants and agrees to perform all the terms of this Agreement in good faith and care and to compensate all the damages that the Principal may incur as a result of the Agent’s failure to do so.
(2) The aforesaid compensation of damages shall not limit the Principal’s rights under Article 20 hereof.
Article 19: Resignation of the Agent
The Agent may not resign without the Principal's consent.
Article 20: Rescission of Agreement
(1) The Principal may rescind this Agreement in the event:
1. The Agent fails to perform its obligations under this Agreement and fails to cure within 30 days after receipt of notice from the Principal or the Asset Manager;
2. The Agent is subjected to dissolution, reorganization, composition or bankruptcy proceedings; a court order or judgment for dissolution against the Agent is entered; or the Agent is subjected to suspension of business or other similar administrative decisions:
3. Any of the Agent's representations and warranties contained in Article 16 hereof is found to be false; or
4. The Principal, in its reasonable judgment, decides that the purpose of this Agreement cannot be fulfilled due to pertinent laws, rules and regulations.
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(2) In the event of rescission of this Agreement, the Agent shall turn over the entrusted businesses to a third party in compliance with the Principal’s instructions through which time the Agent shall continue to perform all its obligations in good faith and care.
Article 21: Expenses and Fees
(1) Notwithstanding the limitations contained in Article 11 (2), the Agent may from time to time withdraw reasonable amount of all the expenses (except the Agent’s ordinary business expenses) from the Receipt Management Account and make necessary payments.
(2) The Principal agrees to pay the Agent as compensation the amount equal to the outstanding balance of ABS as of the first day of each ABS Quarter multiplied by 0.05%. However, in the event the outstanding balance of the priority ABS as of the first day of the ABS Quarter is less that a half of the total outstanding balance of the initial priority ABS, the compensation herein shall be the amount equal to the outstanding balance of ABS multiplied by 0.0625%.
(3) I the event the Agent resigns or is dismissed, the compensation shall be adjusted as of the date the resignation or dismissal takes effect.
Article 22: Conditions Precedent
This Agreement is contingent upon the following:
1. The Liquidation Plan including the Asset Transfer Agreement and this Agreement shall be registered with the Financial Supervision Commission;
2. NewState Capital Co., Ltd. shall register with the Financial Supervision Commission the transfer of the Liquidation Asset made in accordance with the Liquidation Plan;
3. The Agent shall submit proof of power and authority to make and perform this Agreement including certified copies of resolution of the board of directors, articles of incorporation, corporate register, specimen signature of the representative director and other documents reasonably requested by the Principal;
4. All the necessary governmental approvals or permits shall be obtained and other necessary procedures shall be completed; and
5. The Agent shall submit to the Principal all other documents reasonably requested by the Principal.
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Article 23: Duration
Unless otherwise provided, this Agreement shall be valid until the principal and interest on the ABS are fully paid off.
Article 24: Successors and Assigns
This Agreement shall apply to the successors, assigns, heirs and representatives of the parties.
Article 25: Notice
The notice under this Agreement shall be sent to the following addresses by postage pre-paid, registered mail or facsimile. Provided, however, that notice by facsimile shall be effective only when the receipt thereof is acknowledged by the recipient.
Notice to the Agent:
H&CB
00-0 Xxxxx-Xxxx Xxxxxxxxxxxx-Xx
Xxxxx
Xxxx: ABS Team
Fax: 00-000-0000
Notice to the Principal:
NewState Second Mortgage SPC
00-0 Xxxxx-Xxxx Xxxxxxxxxxxx-Xx
Xxxxx
Attn: H&CB ABS Team
Fax: 00-000-0000
Article 26: Jurisdiction
This Agreement shall be construed in accordance with the laws of the Republic of Korea and all the legal proceedings shall be subject to the jurisdiction of Seoul District Court.
Principal: NewState Second Mortgage SPC
00-0 Xxxxx-Xxxx Xxxxxxxxxxxx-Xx
Xxxxx
By: Suk Xx Xxx, Director (Seal)
Agent: H&CB
00-0 Xxxxx-Xxxx Xxxxxxxxxxxx-Xx
Xxxxx
By: Jung Xxx Xxx, Representative Director (Seal)
