EX-10.2 3 d321123dex102.htm GENERAL TERMS AND CONDITIONS FOR BANK CREDIT TRANSACTIONS
Exhibit 10.2
[Translation]
General Terms and Conditions for Bank Credit Transactions
(Corporate Borrower)
These General Terms and Conditions for Bank Credit Transactions (the “General Terms and Conditions”) are established to facilitate the prompt and accurate credit transactions between Woori Bank (the “Bank”) and the customer (the “Obligor”) based on mutual trust.
Article 1. Scope of Application
(1) The General Terms and Conditions shall apply to all credit transactions arising between the Bank and the Obligor (the person owing obligations to the Bank including a borrower, a discount applicant and a payment guarantee applicant, hereinafter the same) including loans evidenced by promissory notes, discounting of bills of exchange or promissory notes, loans evidenced by deeds, overdrafts, payment guarantees and foreign exchange transactions.
(2) In the event that the Bank has, through credit transactions with any third party, acquired bills (including checks, collectively, the “Bills”) drawn, endorsed, accepted or guaranteed by the Obligor, the Obligor shall be also bound by the General Terms and Conditions in the performance of the obligations evidenced by such Bills; provided, that Articles 2, 3, 5, 7, 9 and Article 12, Paragraph (1) and Article 15, Paragraph (1) shall not be applicable.
(3) The General Terms and Conditions shall apply to all transactions and performance of obligations between the principal office and branches of the Bank and the principal office and branches of the Obligor to the extent that the transaction or the obligation falls within the scope of the above Paragraph (1) or (2).
Article 2. Obligations on Bills and Credits
In the event that the credit has been granted through Bills drawn, endorsed, accepted or guaranteed by the Obligor, the Bank may demand from the Obligor the payment of the Obligor’s obligations by exercising the Bank’s rights either under the Bills or under the underlying credits.
Article 3. Interest and Default Interest
(1) The rates, computation method or the time and manner of payment, respectively, of the interest, discount charge, guarantee fee or commission (hereinafter referred to as “Interest, etc.”) shall be determined by the Bank, to the extent permitted under applicable laws and regulations.
1
(2) The Obligor may select one of following in respect of rate of Interest, etc. in executing the transaction agreement.
1. The Bank shall not change, in principle, the rate until the Obligor’s obligations are fully performed.
2. The Bank may change the rate from time to time until the Obligor’s obligations are fully performed.
(3) If the Obligor selects Paragraph (2) Item 1 and there is any significant change in circumstance due to sudden change in national economy and financial condition which could not be expected at the time of execution of the agreement, before the obligations are fully performed, the Bank may increase or decrease the rate by giving a notice to the Obligor separately. In this case, if the cause for change ceases to exist, the Bank shall immediately change such rate in order to conform to such circumstance.
(4) If the Obligor selects Paragraph (2) Item 2, the increase or decrease of rate of Interest, etc. by the Bank shall be made within reasonable extent in accordance with the sound banking customary practice.
(5) Any amount not paid by the Obligor when due and payable shall bear interest at the default rate determined by the Bank, to the extent permitted under the applicable laws and regulations, on the basis of the actual number of days elapsed and a year of 365 days; provided, that the Bank may change such rate to the extent permitted under the applicable laws and regulations due to change in financial condition and any other reasonable cause; and provided, further, that in the case of foreign exchange transactions, international practices and commercial customs shall apply.
(6) The Obligor shall be bound by any changes in the computation manner or time and manner of payment, respectively, of the Interest, etc. or default interest from the first date on which the Obligor should pay the interest after such change, if such change is made by the Bank as a result of any change in the financial circumstances or any other condition affecting the credit transaction or any other reasonable causes to the extent permitted under applicable laws and regulations.
(7) If the change is made in accordance with Paragraphs (4), (5) and (6), the Bank shall post such change at each of the Bank’s offices and the electronic media determined by the Bank for one (1) month from the effective date of such change; provided, that if the change applies to certain Obligor, the change shall be notified to such Obligor separately.
(8)
If the Obligor incurs unexpected disadvantages pursuant to Paragraphs (3) and (6) above,
2
the Obligor may terminate the relevant contract within one (1) month from the first date on which the Obligor should pay the interest after change. In this case, the interest for the period from the effective date of such change to the date of termination shall be calculated at the interest rate that was effective prior to the change. Any amount not paid by the Obligor to the Bank when due and payable as a result of such termination shall bear interest at the default interest rate that was effective prior to the change.
Article 4. Cost and Expenses
(1) The Obligor shall bear the expenses set forth in the following items as a result of default in performance of the Obligor’s obligation:
1. the expenses incurred by the Bank in enforcing or protecting [it shall refer to a preliminary attachment or preliminary injunction (including terminating) etc.] the Bank’s rights including claims or security rights against the Obligor, the guarantor or the owner of collateral;
2. the expenses incurred by the Bank for inspection of any collateral or collection of claims; and
3. the expenses incurred by the Bank for sending notices to demand performance of the Obligor’s obligation.
(2) In the event that the Bank pays on the Obligor’s behalf any expenses set forth in Paragraph (1) above not paid by the Obligor, the Obligor shall immediately reimburse the Bank for such payment. Any of such payment not paid immediately on the Bank’s demand shall bear default interest of which maximum rate is six percent per annum as stipulated in Article 54 (Legal Rate of Interest in Commercial Activities) of the Commercial Code, calculated on a daily basis based on 365 days a year, for the period from the date of the payment by the Bank to the date of full reimbursement by the Obligor.
(3) Before executing any loan agreement, the Bank shall inform the type and amount of incidental costs and expenses required for extending secured loans, in addition to the agreed interest and prepayment fees, in writing, to make the Obligor know in advance.
Article 5. Purpose and Use of Loan Proceeds
The Obligor shall expressly describe the purpose of the loan proceeds in the application for credit. The loan proceeds disbursed to the Obligor by the Bank under the credit transactions shall not be used for any purposes other than the purposes agreed to under the transaction. The same shall apply in the case of payment guarantees and other types of credits extended by the Bank.
3
Article 6. Security
(1) In case of any change in the Obligor’s or the guarantor’s creditworthiness, reduction in the value of the security or any other reasonable causes necessitating the protection of the Bank’s rights, the Obligor shall upon demand by the Bank forthwith furnish to the Bank such substitute security or additional security, or such guarantors or additional guarantors as the Bank may require.
(2) The Bank shall in principle make collections on or dispose of any security in accordance with statutorily prescribed procedures; however, if the price of security is prevailing price in exchange market, or a collection or disposition otherwise than in accordance with the statutory procedures is expected to be more likely to result in a profitable sale, the Bank may make collections on or dispose of the security in such a manner, at such a time, for such a price, etc. as are generally deemed appropriate. The Bank may deduct expenses from the proceeds and apply the remainder to the payment of the Obligor’s obligations to the Bank pursuant to Article 13. The Obligor shall promptly pay any deficiency to the Bank. In this case, the Bank shall notify the Obligor ten (10) days prior to the disposition of such security; provided, that the Bank expects that the recovery of claims would be seriously difficult before the court gives a decision to commence rehabilitation or bankruptcy proceeding pursuant to the Act on Debtor Rehabilitation and Bankruptcy, the Bank shall make collections on or dispose of any security and then, immediately notify the Obligor thereof.
(3) In case of any delay in the Obligor’s performance of any obligations owing to the Bank, the Bank may continue to possess or make collections on or dispose of, pursuant to the Paragraph (2), the Obligor’s personal properties, Bills, and other negotiable instruments and securities in the Bank’s possession, even if they were not furnished to the Bank for security purposes.
Article 7. Acceleration of Payment
(1) Upon occurrence of any of the events set forth below, all obligations that the Obligor owes to the Bank shall immediately become due and payable without notice or demand from the Bank, and the Obligor shall immediately pay and perform such obligations, including without limitation the obligation to make advance reimbursements for a payment guarantee:
1.
an order or notice of attachment, provisional attachment or attachment for delinquent taxes or public imposts is issued, or a compulsory execution or disposition due to delinquent taxes or public imposts is commenced with respect to any of the Obligor’s deposits or other claims against the Bank; provided, that in case of obligation
4
secured by any collateral, such obligation shall be immediately due and payable for the reason of provisional attachment only if it recovery of claims is seriously difficult;
2. an order or notice of attachment or attachment for delinquent taxes or public imposts is issued, or a compulsory execution or disposition due to delinquent taxes or public imposts is commenced with respect to any of the collaterals provided by the Obligor (excluding the Obligor’s deposit or other claims against the Bank set forth in the preceding Item);
3. an application is filed by the Obligor for bankruptcy, rehabilitation, debtor rehabilitation of the Obligor; or an application is filed for listing the Obligor on the registry of delinquent debtors;
4. a notice is received for the collection of taxes or other public imposts prior to the due date therefore or the Clearing House suspends the Obligor’s transactions;
5. the Obligor is deemed to stop payment due to suspension of its business or concealing itself or otherwise;
6. any of the events stated in Item 1 above occurs with respect to any deposit or other claims against the Bank of any comprehensive kun-guarantor of the Obligor’s obligations to the Bank, who is the oligopolistic shareholder or the beneficial owner of the Obligor.
(2) If the Obligor fails to make any required payment, including but not limited to the payment of interest, on due date thereof for four times during the entire repayment period (for the avoidance of doubt, the “entire repayment period” shall include, to the extent applicable, any extended period), the obligations with respect to which such delayed payments have occurred shall become automatically and immediately become due and payable without notice or demand by the Bank, and the Obligor shall pay and perform such obligations owed to the Bank.
(3)
Upon the occurrence and during the continuance of any of the events set forth below, Bank may, in its sole discretion upon notice to Obligor, declare all obligations which the Obligor owes to the Bank and are related to each such event immediately due and payable, and cause the Obligor to immediately pay and perform such obligations; provided, that on or before three (3) business days prior to the date on which such obligations of the Obligor shall become due and payable, the Bank shall give a notice to the Obligor that the Obligor has failed to pay or perform the relevant obligations as set forth in any of the following Items and the relevant obligations of the Obligor will become due and payable, and if the Bank fails to give such notice to the Obligor before three (3) business days prior to the date on which such obligations of the Obligor shall become due and payable, the relevant
5
obligations of the Obligor will become due and payable on the third business day after the date of actual arrival of notice and the Obligor shall pay and perform the relevant obligations:
1. the Obligor has failed to pay Interest, etc. for fourteen (14) days continuously after the due date thereof; or
2. the Obligor has failed to pay an installment payment on the due date and it remains unpaid for thirty (30) days.
3. Provided, that, the Bank, upon the drawdown of the loan, will provide the Obligor with the payment schedule for the principal of and interest on the loan.
(4) Upon the occurrence and during the continuance of any of the events set forth below, and as a result the Bank’s rights are put in jeopardy, the Bank may, in its sole discretion upon notice to Obligor, demand the Obligor to repay obligations and to cancel attachment, etc. and to restore creditworthiness, and declare all obligations that the Obligor owes to the Bank immediately due and payable on the due date designated in written notice or demand tendered by the Bank more than ten (10) days prior to the due date, and the Obligor shall immediately pay and perform such obligations:
1. the Obligor fails to pay the obligations which are immediately due and payable pursuant to Paragraph (3) or (5);
2. an order or notice of attachment or an attachment for delinquent taxes or public imposts is issued with respect to properties of the Obligor other than those described in Item 1 or 2 of Paragraph (1) above and such attachment continues for a period of thirty (30) consecutive days, and for this reason the creditworthiness of the Obligor is substantially deteriorated and the recovery of claims is seriously difficult;
3. a public sale on collateral commences in order to enforce the security right or a notice of provisional attachment is issued pursuant to the Civil Enforcement Act with respect to any property of the Obligor other than those specified in Paragraph (1) Item 1 above, for this reason, the creditworthiness of the Obligor is substantially deteriorated and the recovery of claims is seriously difficult;
4. it shall become difficult for the Bank to maintain a normal banking business with the Obligor due to the breach by the Obligor of any provisions in Article 5 or Article 19 of the General Terms and Conditions and such breach continues for a period of thirty (30) consecutive days following notice to the Obligor by Bank;
5.
the Obligor is found to have intentionally submitted to Bank in connection with a credit transaction, documents that are forged or altered or found to be false in a
6
material respect, or intentionally submitted to Bank in connection with a credit transaction, materials deemed to be, when taken together with all materials submitted to Bank, incomplete in a material respect;
6. the creditworthiness of the Obligor deteriorates substantially as a result of the commencement of liquidation procedures against Obligor or shutdown or suspension of Obligor’s business due to labor disputes, and such liquidation procedures or shutdown or suspension of the Obligor’s business shall continue for a period of ten (10) days from the day Obligor first has notice of such occurrence;
7. the Obligor’s credit information is registered as information on default, subrogation or substitute payment, dishonor, related parties, disruption of financial order or public records under the Credit Information Management Rules.
(5) Upon the occurrence and during the continuance of any of the events set forth below, the Bank may, in its sole discretion upon notice to Obligor, declare all obligations that the Obligor owed to the Bank with respect to which such event occurs immediately due and payable on the due date designated in written notice or demand tendered by the Bank more than ten (10) days prior to the due date, and the Obligor shall immediately pay and perform such obligations:
1. [Intentionally deleted]
2. any breach by the Obligor of a material provision of the agreements with the Bank, including, without limitation, the agreement to obtain fire insurance with respect to the collateral, or the agreement to provide to the Bank as collateral the machinery or building which has been constructed, installed or manufactured with proceeds of the loans extended by the Bank to the Obligor, and such breach continues for a period of thirty (30) consecutive days following notice from Bank to the Obligor.
3. [Intentionally deleted]
(6) Even when any of the Obligor’s obligations to the Bank are accelerated under Paragraphs (1) through (5), if the Bank expressly waives the effect of such Paragraphs or if normal transactions are resumed between the Bank and the Obligor notwithstanding the acceleration (e.g., the Bank receives an installment payment, principal of and interest on installment indebtedness, interest or default interest), the acceleration shall be deemed to have been rescinded with respect to such obligation or the obligation designated by the Bank as of the time of the Bank’s waiver or of the resumption of the normal banking transactions.
(7) In the event that there is an interested party of the Obligor competing over the Obligor’s claim against the Bank, the Bank may exercise its right of set-off.
7
Article 8. Notice to Joint and Several Guarantor of Accelerated Obligation
(1) If the payment obligation is accelerated pursuant to each Item of Article 7 Paragraph (1) above, the Bank shall notify such fact in writing to the joint and several guarantor within fifteen (15) business days from the date on which such obligations of the Obligor shall become due and payable if any event under Item 1 or 6 occurs or if the Clearing House suspends the Obligor’s transactions under Item 4, or otherwise, from the date on which the Bank recognizes such event of acceleration.
(2) The obligation is immediately due and payable in accordance with Article 7, Paragraphs (4) and (5), the Bank shall notify the joint and several guarantor in writing within fifteen (15) business days from the date on which such obligations of the Obligor shall become due and payable.
(3) Even if the joint and several guarantor receives a notice of acceleration in accordance with Paragraphs (1) and (2), the consent of the joint and several guarantor for continuous transaction is not required in respect of such obligation of which acceleration has been rescinded pursuant to Article 7, Paragraph (6). In this case, the Bank shall give a notice of rescission of acceleration in writing to the joint and several guarantor of such obligation within fifteen (15) business days .
Article 9. Obligation to Repurchase Discounted Bills
(1) The Obligor shall automatically repurchase and immediately pay at face value, without demand or notice from the Bank, all the discounted Bills set forth below. If the Obligo
