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DECREE ON THE ACT ON THE EFFICIENT DISPOSAL OF NON-PERFORMING ASSETS, ETC. OF FINANCIAL INSTITUTIONS AND THE ESTABLISHMENT OF KOREA ASSET MANAGEMENT CORPORATION

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DECREE ON THE ACT ON THE EFFICIENT DISPOSAL OF NON-PERFORMING ASSETS, ETC. OF FINANCIAL INSTITUTIONS AND THE ESTABLISHMENT OF KOREA ASSET MANAGEMENT CORPORATION

Presidential Decree No. 15511, Nov. 19, 1997

Amended by Presidential Decree No. 15761, Apr. 1, 1998 Presidential Decree No. 16234, Apr. 9, 1999

Presidential Decree No. 16476, Jul. 23, 1999

Presidential Decree No. 16604, Nov. 27, 1999

Presidential Decree No. 16709, Feb. 14, 2000

Presidential Decree No. 16757, Mar. 24, 2000

Presidential Decree No. 16821, May 29, 2000

Presidential Decree No. 17791, Dec. 5, 2002

Presidential Decree No. 17816, Dec. 26, 2002

Presidential Decree No. 19299, Jan. 27, 2006

Presidential Decree No. 20653, Feb. 29, 2008

Article 1 (Purpose)

The purpose of this Decree is to provide for matters delegated by the Act on the Efficient Disposal of Non-Performing Assets, etc. of Financial Institutions and the Establishment of Korea Asset Management Corporation and necessary matters concerning the enforcement thereof. Article 2 (Scope of Institutions Conducting Financial Business) "Such other institutions as prescribed by Presidential Decree from among those conducting financial businesses under other Acts"as mentioned in item (i) of subparagraph 1 of Article 2 of the Act on the Efficient Disposal of Non-Performing Assets, etc. of Financial Institutions and the Establishment of Korea Asset Management Corporation (hereinafter referred to as the "Act") means any of the following: 16821, May 29, 2000; Presidential Decree No. 17791, Dec. 5, 2002; Presidential Decree No. 19299, Jan. 27, 2006; Presidential Decree No. 20653, Feb. 29, 2008>

1. Cooperatives under the Act on Agricultural Cooperatives;

2. Fisheries cooperatives under the Act on Fisheries Cooperatives;

3. Deleted;

4. Branch offices or agencies of foreign financial institutions authorized under Article 58 (1) of the Banking Act;

5. Insurance companies under the Insurance Business Act;

6. Mutual savings banks under the Act on Mutual Savings Banks;

7. Deleted;

8. Merchant banks under the Merchant Banks Act;

9. Credit cooperatives and the federation thereof under the Credit Cooperatives Act;

10 Securities companies under the Securities and Exchange Act;

11. Credit guarantee funds established under the Credit Guarantee Fund Act;

12. Specialized credit financial business companies licensed or registered under the Specialized Credit Financial Business Act;

13. Korea Technology Credit Guarantee Fund under the Korea Technology Credit Guarantee Fund Act;

14. Deleted;

15. Small and medium start-up investment companies under the Support for Small and Medium Enterprise Establishment Act;

16. Community credit cooperatives under the Community Credit Cooperatives Act;

17. Asset management companies and private equity funds under the Indirect Investment Asset Management Business Act;

18. Companies established by financial institutions in items (a) through (h) of subparagraph 1 of Article 2 of the Act to acquire or liquidate bonds, which are deemed by the Financial Services Commission necessary to take over the bonds held by a concerned company for efficient liquidation of non-performing loans;

19. Financial institutions for liquidation under Article 36-3 of the Depositor Protection Act;

20. Local-level credit guarantee foundations under the Local-Level Credit Guarantee Foundation Act;

DECREE ON THE ACT ON THE EFFICIENT DISPOSAL OF NON-PERFORMING ASSETS, ETC. OF FINANCIAL INSTITUTIONS AND THE ESTABLISHMENT OF KOREA ASSET MANAGEMENT CORPORATION 3

21. Forestry cooperatives and the federation thereof under the Forestry Cooperatives Act;

22. Korea Housing Finance Corporation under the Korea Housing Finance Corporation Act;

23. Small Business Corporation under the Promotion of Small and Medium Enterprises and Encouragement of Purchase of Their Products Act;

24. Small and medium enterprise cooperatives and the federation thereof under the Small and Medium Enterprise Cooperatives Act;

25. Korea Housing Guarantee Co., Ltd. under the Housing Act;

26. Construction Mutual-Aid Association, Specialized Construction Mutual-Aid Association and Plant and Mechanical Contractors Financial Cooperative of Korea under the Framework Act on the Construction Industry;

27. Special purpose companies under the Asset-Backed Securitization Act; and

28. Specialized restructuring companies and corporate restructuring associations under the Industrial Development Act. Article 2-2 (Scope of Non-Performing Loans)

"Other equivalent loans as prescribed by Presidential Decree" as mentioned in subparagraph 2 of Article 2 of the Act mean loans in the following subparagraphs:

1. Loans for which an allowance for bad debts is to be established under the conditions prescribed by the Financial Services Commission; and

2. Other loans deemed particularly necessary to improve the liquidity and soundness of financial institutions which are recognized by the Management Committee established under Article 14 of the Act (hereinafter referred to as the "Committee")

[This Article Newly Inserted by Presidential Decree No. 16476, Jul. 23, 1999] Article 2-3 (Scope of Assets Subject to Sale of Financial Institutions) "Assets as prescribed by Presidential Decree"as mentioned in item (b) of subparagraph 4 of Article 2 of the Act mean assets in each of the following subparagraphs:

1. Fixed assets (including guarantee bonds for lease; hereafter the same shall apply in this Article) which is out of business use due to merger, conversion or liquidation of financial institutions; and

2. Fixed assets which financial institutions intend to sell according to DECREE ON THE ACT ON THE EFFICIENT DISPOSAL OF NON-PERFORMING ASSETS, ETC. OF FINANCIAL INSTITUTIONS AND THE ESTABLISHMENT OF KOREA ASSET MANAGEMENT CORPORATION 4

a timely corrective measure under Article 10 of the Act on the Structural Improvement of the Financial Industry.

[This Article Newly Inserted by Presidential Decree No. 16476, Jul. 23, 1999] Article 3 (Methods of and Procedures for Undertaking Disposal of Non-Performing Assets)

In such cases where a financial institution entrusts the disposal of non-performing assets under Article 3 (2) of the Act to the Korea Asset Management Corporation (hereinafter referred to as the "Corporation") under Article 4 (1) of the Act, the Corporation shall conclude an agreement with the financial institution on matters necessary for the handling of entrusted affairs. Article 4 (Methods of and Procedures for Aquisition of Non-Performing Assets)

(1) The Corporation shall, when a financial institution requests to acquire non-performing assets under Article 4 (1) of the Act, establish an acquisition contract with the relevant financial institution, consulting on the conditions of acquisition, such as acquisition price, etc., and acquire the non-performing assets by the methods mentioned in the following subparagraphs:

1. Non-performing loans: Receipt of documents from which a claim originates and transfer of actual rights granted by way of security; and

2. Assets for non-business use: Transfer of ownership. (2) Apart from the methods under paragraph (1), the Corporation may acquire and liquidate non-performing loans by taking over the whole or part of the non-performing loans of a financial institution under an agreement made between the financial institution, Corporation and debtor (in such cases where a debtor is not the owner of collateral, including the owner of the collateral) and taking transfer of the ownership of the collateral for the non-performing loans for the settlement of the non-performing loans.

Article 5 (Calculation of Acquisition Price of Non-Performing Assets, etc.) (1) The acquisition price of non-performing assets shall be based on objective prices, such as the price of collateral for non-performing loans or assets of non-business use subject to acquisition appraised by an appraisal business operator under the Public Notice of Values and Appraisal of Real Estate Act, and shall be calculated in consideration of priority claim, right, the DECREE ON THE ACT ON THE EFFICIENT DISPOSAL OF NON-PERFORMING ASSETS, ETC. OF FINANCIAL INSTITUTIONS AND THE ESTABLISHMENT OF KOREA ASSET MANAGEMENT CORPORATION 5

right to lease, etc. (2) In such cases where a cause exists for which predetermining the price of a non-performing asset under paragraph (1) is difficult, the condition to settle ex-post facto the difference between the acquisition price and disposal price of a non-performing asset may be included in a contract at the time when an acquisition contract is established. Article 6 (Priority Order, Criteria, etc. of Acquisition of Non-Performing Assets)

(1) The Corporation may preferentially acquire non-performing assets falling under any of the following subparagraphs to efficiently manage the Non-Performing Loan Resolution Fund under Article 38 of the Act (hereinafter referred to as the "Fund"):

1. Non-performing assets deemed particularly necessary to be acquired for the public interest, such as for the protection of the sound management of financial institutions;

2. Non-performing assets the effect of disposal of which is significant because of a large number of interested persons;

3. Non-performing assets the disposal of which is less restricted by public law; and

4. Non-performing assets a swift collection of the sale proceeds of which is possible due to no obstacles to sale.

(2) When the exercise of mortgage after the acquisition of a non-performing loan is anticipated to be of no practical use, such as in cases where a claim preferential to a claim (including claims on public charges, such as national tax and local government tax) secured by the mortgage of a financial institution on the collateral of the non-performing loan exceeds the criteria set by the operational rules of the Corporation under Article 26 (7) of the Act (hereinafter referred to as the "operational rules"), the Corporation shall not acquire it.

Article 7 (Payment of Acquisition Consideration of Non-Performing Assets) The acquisition price of non-performing assets shall be paid in cash in principle: Provided, That in cases where the non-performing asset is acquired at the expense of the Fund, the acquisition consideration may be paid with the Non-Performing Loan Resolution Fund Bonds (hereinafter referred to as "Bonds") under Article 40 of the Act in whole or in part DECREE ON THE ACT ON THE EFFICIENT DISPOSAL OF NON-PERFORMING ASSETS, ETC. OF FINANCIAL INSTITUTIONS AND THE ESTABLISHMENT OF KOREA ASSET MANAGEMENT CORPORATION 6

in consultation with a financial institution.

Article 8 (Undertaking or Acquisition of Assets Subject to Self-Rescue Plan of Enterprises Showing Signs of Insolvency)

(1) The provisions of Article 3 shall apply mutatis mutandis to cases where the Corporation undertakes the sale of the assets subject to a self-rescue plan of an enterprise showing signs of insolvency under Article 5 (2) of the Act.

(2) The provisions of Articles 4 (1), 5 (1) and 7 shall apply mutatis mutandis to cases where the Corporation acquires assets subject to a self-rescue plan of an enterprise showing signs of insolvency under Article 5 (2) of the Act. In such cases, the method of acquisition of such assets shall be as mentioned in each of the following subparagraphs:

1. Real estate: Transfer of ownership;

2. Securities: Delivery of actual object, or transfer of ownership, such as transfer of title; and

3. Affiliated companies: Acquisition of stocks or shares to control the relevant company.

(3) The Corporation may preferentially acquire assets subject to a self-rescue plan of an enterprise showing signs of insolvency which are deemed particularly necessary to be acquired for the public interest according to the operational rules.

Article 9 (Method for Calculation of Investment Money, etc.) (1) The capital contribution as referred to in Article 9 (4) of the Act shall be calculated under the conditions prescribed in the articles of incorporation of the Corporation, based on the amount of total assets of a financial institution, etc. in the scope of 10/100 of the paid-in capital of each financial institution: Provided, That the financial institutions as referred to in Article 2 may be excluded from financial institutions for investment through the resolution of the Committee.

(2) The capital contribution referred to in paragraph (1) shall be made in cash.

(3) A financial institution shall make the first capital contribution as referred to in paragraph (1) prior to the completion of registration of establishment of the Corporation.

(4) The time for the payment of capital contributions, other than the capital DECREE ON THE ACT ON THE EFFICIENT DISPOSAL OF NON-PERFORMING ASSETS, ETC. OF FINANCIAL INSTITUTIONS AND THE ESTABLISHMENT OF KOREA ASSET MANAGEMENT CORPORATION 7

contribution under paragraph (3), shall be determined by the articles of incorporation.

Article 10 (Registration of Establishment of Branch Offices, etc.) In cases where the Corporation has established a branch office or business office, it shall register relevant matters according to the classifications in the following subparagraphs:

1. The purpose of establishing its branch office or business office within two weeks at the location of the main office; and

2. Matters in subparagraphs 1 through 3 (excluding matters concerning the location of other branch offices and business offices) and 6 of Article 12 of the Act, and the name, resident registration number and address of the president, within three weeks at the location of the newly established branch office or business office.

Article 11 (Registration of Transfers)

(1) In cases where the Corporation has moved the main office, it shall register the purpose therof within two weeks at the former location and the matters in each subparagraph of Article 12 (2) of the Act within three weeks at the new location, respectively.

(2) In cases where the Corporation has moved its branch office or business office, it shall register the purpose thereof within three weeks at the former location and the matters in subparagraph 2 of Article 10 of the Act within four weeks at the new location.

Article 12 (Registration of Changes)

In cases where there is change in the matters mentioned in any subparagraph of Article 12 (2) of the Act, such change shall be registered at the registry have any jurisdiction over the main office within two weeks. In such cases, if there is change in any matter mentioned in subparagraph 2 of Article 10, it shall be also registered at the registry have any jurisdiction over branch office or business office within three weeks. Article 13 (Registration of Appointed Representatives) When the president of the Corporation has appointed a representative under Article 23 of the Act (referring to a representative who has a comprehensive right of representation of the business), the matters in each of the following subparagraphs shall be registered at the registry have any jurisdiction over the main office, branch office or business office where such representative is located within two weeks: DECREE ON THE ACT ON THE EFFICIENT DISPOSAL OF NON-PERFORMING ASSETS, ETC. OF FINANCIAL INSTITUTIONS AND THE ESTABLISHMENT OF KOREA ASSET MANAGEMENT CORPORATION 8

1. Name, resident registration number and address of the representative; and

2. In cases where the right of the representative is restricted, the details of such restrictions.

Article 14 (Calculation of Period of Registration) In cases where any matter on which the authorization or approval of the Financial Services Commission is required to be obtained is included in the matters to be registered under Articles 10 through 13, the period of registration shall be counted from the date on which a relevant letter of authorization or letter of approval arrives. Article 15 (Applicants for Registration, etc.)

(1) The application for registration under Articles 10 through 13 shall be made by the president of the Corporation.

(2) The application for registration under Articles 10 through 13 shall be accompanied by evidential documents to prove respective causes. Article 16 (Size of Acquisition of Non-Performing Assets Subject to Deliberation and Resolution by Committee, etc.)

"Those exceeding the size prescribed by Presidential Decree" as mentioned in Article 14 (2) 7 of the Act mean any of the following subparagraphs:

1. The amount of acquisition is ten billion won or more and meets the criteria set by the operational rules;

2. Non-performing assets the amount of acquisition of which is five billion won or more from among the non-performing assets preferentially acquired under Article 6 (1) 1, and which meet the criteria set by the operational rules; and

3. Real estate to be purchased under Article 26 (1) 10 of the Act which is expected to require development (limited to that falling under subparagraphs 1, 3 and 5 of the same paragraph), the estimated development cost of which exceeds the estimated acquisition price of the real estate subject to acquisition and which meet the criteria set by the operational rules.

Article 17 (Qualifications of Commissioned Members of Committee) The members commissioned by the Financial Services Commission under Article 15 (1) 8 of the Act shall be persons who do not fall under the causes of disqualification of the officers of the Corporation under Article DECREE ON THE ACT ON THE EFFICIENT DISPOSAL OF NON-PERFORMING ASSETS, ETC. OF FINANCIAL INSTITUTIONS AND THE ESTABLISHMENT OF KOREA ASSET MANAGEMENT CORPORATION 9

19 of the Act.

Article 18 (Operation of Committee)

(1) With respect to the proceedings of the Committee, a minute book shall be prepared, which is to be signed or sealed by the chairperson and all members present.

(2) No members of the Committee shall not be allowed to attend a meeting to discuss matters in which their relatives, or any institution or company to which they belong they are directly interested. (3) Allowances may be paid to members present at the meeting of the Committee within the budgetary limits of the Corporation. (4) Necessary matters concerning the operation of the Committee, other than those prescribed in this Decree, shall be determined by the chairperson through a resolution of the Committee.

Article 18-2 (Limits on Guarantees)

"The extent determined by a Presidential decree" as mentioned in Article 26 (1) 1-3 (c) of the Act means 300/100 of the aggregate of paid-in capital, legal reserve and business expansion reserve of the Corporation.

[This Article Newly Inserted by Presidential Decree No. 16476, Jul. 23, 1999] Article 18-3 (Companies to be of Contribution and Investment) "Companies, etc. as prescribed by a Presidential decree" as mentioned in Article 26 (1) 10-3 of the Act mean any of the following subparagraphs:

1. Any investment company established in foreign countries for contribution to and investment in overseas non-performing assets (hereinafter referred to as "overseas investment, etc.") and other indirect investment organizations similar thereto (hereinafter referred to as an "investment company, etc.");

2. Private equity funds under Article 144-2 of the Indirect Investment Asset Management Business Act;

3. Special purpose companies established domestically and abroad for the purpose of overseas investment, etc. in investment companies, etc.;

4. Asset management companies established for the purpose of management of overseas non-performing assets acquired by special purpose companies; and

5. Other domestic companies deemed necessary to make overseas DECREE ON THE ACT ON THE EFFICIENT DISPOSAL OF NON-PERFORMING ASSETS, ETC. OF FINANCIAL INSTITUTIONS AND THE ESTABLISHMENT OF KOREA ASSET MANAGEMENT CORPORATION 10

investments, etc. by the Financial Services Commission. [This Article Newly Inserted by Presidential Decree No. 19299, Jan. 27, 2006] Article 19 (Incidental Services Offered by Corporation) "Services as prescribed by a Presidential decree" as mentioned in Article 26 (1) 12 of the Act mean services in each of the following subparagraphs:

1. Arrangement of mergers and acquisitions to support self-rescue plans of enterprises showing signs of insolvency;

2. Advice and consulting on the use and development of real estate;

3. Other services approved necessary by the Financial Services Commission as services incidental to achieving the purposes of establishment of the Corporation, such as the disposal of non-performing assets and support for the management normalization of enterprises showing signs of insolvency.

Article 20 (Scope, Criteria, etc. of Real Estate for Development) (1) The scope and criteria to determine real estate for development under Article 26 (5) of the Act shall be real estate development of which (referring to improvement of land, such as subdivision, consolidation, alteration of the type of land, or construction such as new construction, or expansion, and conversion of use; hereinafter the same shall apply) is expected to accelerate its disposal at a reasonable price and which falls into any of the following subparagraphs from among real estate disposal of which is difficult in current conditions or which is difficult sell at a reasonable price:

1. In cases of urban areas (referring to urban areas under subparagraph 1 of Article 6 of the National Land Planning Utilization Act; hereinafter the same shall apply): Real estate the development costs of which do not exceed five times the acquisition price of the real estate for development; and

2. In cases of non-urban areas: Real estate the development costs of which do not exceed ten times the acquisition price of the real estate for development.

(2) Real estate without any obstacle to sale, which falls into any of the following subparagraphs may become real estate for development upon the approval of the Committee, notwithstanding paragraph (1): DECREE ON THE ACT ON THE EFFICIENT DISPOSAL OF NON-PERFORMING ASSETS, ETC. OF FINANCIAL INSTITUTIONS AND THE ESTABLISHMENT OF KOREA ASSET MANAGEMENT CORPORATION 11

1. Real estate the development of which may resolve civil petitions raised by a large number of residents living in neighboring areas or contribute to the promotion of convenience of residents; and

2. Real estate the development of which is requested by a local government or public organization for regional development or other public interest. (3) For the purposes of the provisions of subparagraphs 1 and 2 of paragraph (1), development costs shall not include the increase of the costs resulting from inevitable causes such as design changes resulting from a cause not able to be predicted in advance.

Article 20-2 (Limits on Contribution and Investment) The limit on the total amount of overseas investments, etc. under Article 26 (6) of the Act shall be within 20/100 of the equity capital of the Corporation at the end of the preceding year.

[This Article Newly Inserted by Presidential Decree No. 19299, Jan. 27, 2006] Article 20-3 (Establishment and Organization of Overseas Investment Risk Control Committee)

(1) The Overseas Investment Risk Control Committee (hereinafter referred to as the "Risk Control Committee") shall be established in the Corporation to control the risks of overseas investments, etc. under Article 26 (6) of the Act (hereinafter referred to as "overseas investment risks"). (2) The Risk Control Committee shall deliberate on the matters in each of the following subparagraphs:

1. Matters concerning the basic plan and directions of overseas investment risk control;

2. Matters concerning the control and establishment of measures against overseas investment risks;

3. Matters concerning the propriety of overseas investment, etc. and setting a ceiling for each case;

4. Matters concerning contracts with companies involved in overseas investment, etc.; and

5. Other matters concerning overseas investment risk control as submitted by the chairperson.

(3) The Risk Control Committee shall be comprised of seven members, including one chairperson.

(4) The vice president of the Corporation shall be the chairperson, and five persons commissioned by the president from among those with extensive DECREE ON THE ACT ON THE EFFICIENT DISPOSAL OF NON-PERFORMING ASSETS, ETC. OF FINANCIAL INSTITUTIONS AND THE ESTABLISHMENT OF KOREA ASSET MANAGEMENT CORPORATION 12

knowledge and experience in the fields of the financial industry and investment, attorneys-at-law and certified public accountants, and one officer in charge of overseas business shall be the members. (5) The term of office of the members shall be two years: Provided, That the term of office of an ex officio member shall be the period during which he/she holds his/her official position.

[This Article Newly Inserted by Presidential Decree No. 19299, Jan. 27, 2006] Article 20-4 (Operation of Risk Control Committee) (1) The Risk Control Committee shall be called at the request of 1/3 of the members on the register or when deemed necessary by the chairperson. (2) The resolution of the meetings of the Risk Control Committee shall be adopted by the presence of a majority of the members on the register and the affirmative vote of a majority of the members present. (3) Necessary matters concerning the operation of the Risk Control Committee, other than those prescribed in this Decree shall be determined by the chairperson through a resolution of the Risk Control Committee. [This Article Newly Inserted by Presidential Decree No. 19299, Jan. 27, 2006] Article 21 (Scope, Criteria and Purchasing Procedure of Adjoining Real Estate)

(1) The adjoining real estate under Article 27 (2) of the Act shall be real estate inseparably related to real estate for acquisition: Provided, That real estate size and value of which exceed the size and value of the real estate for acquisition shall be excluded.

(2) In cases where the Corporation intends to purchase adjoining real estate, it shall consult with the owner of the adjoining real estate on purchase conditions, based on objective prices, such as the price appraised by commercial appraiser under the Public Notice of Values and Appraisal of Real Estate Act. Article 22 Deleted. Article 23 (Reports of Issuance of Bonds)

The Corporation shall, when it intends to issue bonds, report the amount, conditions and method of issue and redemption thereof to the Financial Services Commission each time. Article 24 (Form of Bonds)

The bonds shall be in unregistered form: Provided, That they may be issued in registered form when requested by a subscriber or bearer. DECREE ON THE ACT ON THE EFFICIENT DISPOSAL OF NON-PERFORMING ASSETS, ETC. OF FINANCIAL INSTITUTIONS AND THE ESTABLISHMENT OF KOREA ASSET MANAGEMENT CORPORATION 13

Article 25 (Method of Issuance of Bonds, etc.)

The Corporation shall issue its bonds by means of the invitation of subscriptions, total acceptance or sale.

Article 26 (Subscription to Bonds, etc.)

(1) The Corporation shall, when intending to issue bonds by means of the invitation of subscriptions, prepare and deliver a subscription form in which matters in each of the following subparagraphs are entered:

1. Name of the Corporation;

2. Total amount of bonds issued;

3. Par value of bonds by denominations;

4. Interest rate of bonds;

5. Method and time of redemption of the principal;

6. Method and time of payment of interest;

7. Issuance price of bonds or minimum issue price thereof; and

8. Where any bonds unredeemed, the total amount thereof. (2) A person who intends to apply for the invitation of subscriptions to bonds shall enter the number and amount of bonds to which he/she intends to subscribe and the address of the subscriber in two subscription forms as referred to in paragraph (1) and sign and seal, or sign them for submission to the Corporation. In such cases, if the bonds are issued with their minimum value fixed, he/she shall enter the value of subscription in them. Article 27 (Method of Total Acceptance)

(1) The provisions of Article 26 shall not apply to cases where bonds are issued by means of total acceptance. In cases where a person entrusted with an invitation for subscriptions to bonds acquires a portion of the bonds, the same shall apply to the acquired portion of such bonds. (2) The Corporation shall, when intending to issue bonds by means of sale, make public the matters in subparagraphs 1 through 6 of Article 26 (1) and the period of sale in advance.

Article 28 (Total Amount of Bonds Issued)

(1) The Corporation may, when issuing bonds under Article 26, issue bonds even when the total amount of subscriptions to the bonds fails to reach the total amount of issued bonds stated in the subscription form. In such cases, a statement to such effect shall be entered in the subscription form. (2) In cases under paragraph (1), the total amount of subscriptions to the bonds shall be the total amount of bonds issued. DECREE ON THE ACT ON THE EFFICIENT DISPOSAL OF NON-PERFORMING ASSETS, ETC. OF FINANCIAL INSTITUTIONS AND THE ESTABLISHMENT OF KOREA ASSET MANAGEMENT CORPORATION 14

Article 29 (Payment of Value of Acquired Bonds, etc.) (1) The Corporation shall, when the subscription to bonds is closed, cause the total amount of the bonds acquired by subscribers paid without delay. (2) A person entrusted with the invitation of subscriptions to bonds may perform the conduct under paragraph (1) in his/her own name on behalf of the Corporation.

(3) The Corporation shall not issue bonds unless the total amount corresponding to the total amount of bonds issued is paid: Provided, That the same shall not apply to cases where the bonds are issued by means of sale.

Article 30 (Matters to be Entered in Bonds)

Bonds shall state matters in each of the following subparagraphs and be signed and sealed by the president of the Corporation:

1. Matters in subparagraphs 1 through 6 of Article 26 (1) (excluding subparagraph 2 of the same paragraph when a bond is issued by means of sale);

2. Issue number of bond; and

3. Date of issuance of bond. Article 31 (Bond Ledger)

(1) The Corporation shall keep a bond ledger at its main office and enter matters in each of the following subparagraphs therein:

1. Number of bonds by denominations and issue number of each bond;

2. Date of issue of each bond; and

3. Matters in subparagraphs 2 through 6 of Article 26 (1). (2) When a bond is in registered form, matters in each of the following subparagraphs shall be entered, other than the matters in each subparagraph of paragraph (1):

1. Name and address of bond holder; and

2. Date of acquisition of bond. (3) The holder or bearer of a bond may request from the Corporation the inspection of the bond ledger.

Article 32 (Transfer of Bonds in Registered Form) The transfer of a bond in registered form shall not be binding on the Corporation or any third person unless the matters in each subparagraph of Article 31 (2) are entered in the bond ledger. Article 33 (Establishment of Pledge Rights on Bonds in Registered Form) DECREE ON THE ACT ON THE EFFICIENT DISPOSAL OF NON-PERFORMING ASSETS, ETC. OF FINANCIAL INSTITUTIONS AND THE ESTABLISHMENT OF KOREA ASSET MANAGEMENT CORPORATION 15

(1) In cases where the object of a pledge right is a bond in registered form, such pledge right shall not be binding the Corporation or any other third person unless the name and address of the pledgee is registered in the bond ledger.

(2) In cases where a pledge right has been established under paragraph (1), the Corporation shall enter a statement to such effect in the relevant bond.

Article 34 (Cases of Absence of Interest Coupons) (1) In cases of redemption of a bond in unregistered form issued with interest coupons, if there is any defect in the interest coupons, an amount corresponding to such interest coupons shall be deducted from the amount of redemption.

(2) The bearer of the interest coupons under paragraph (1) may request for the payment of the amount deducted in exchange for the coupons. Article 35 (Notice to Bond Bearers, etc.)

(1) Notices or peremptory notices to subscribers or entitled persons before the issuance of the relevant bonds shall be sent to the address entered in the subscription form. In such cases, if the Corporation is notified of an additional address, they shall be sent to such address. (2) Notices or peremptory notices to the holder of a bond in registered form shall be sent to the address entered in the bond ledger. In such cases, if the Corporation is notified of an additional address, they shall be sent to such address.

(3) Notices or peremptory notices to the holder of a bond in unregistered form shall be issued by means of public notice.

Article 36 (Reports)

The Corporation shall, upon completion of the issuance of bonds, report the details thereof to the Financial Services Commission. Article 37 (Scope of Assets Subject to Self-Rescue Plan of Enterprise Showing Signs of Insolvency to be Acquired by Fund) (1) "Assets subject to self-rescue plans for enterprises showing signs of insolvency to be prescribed by a Presidential decree" as mentioned in Article 41 (2) 1 of the Act mean assets subject to self-rescue plans the amount of acquisition of which is not less than five billion won and which meet the criteria set by the operational rules.

DECREE ON THE ACT ON THE EFFICIENT DISPOSAL OF NON-PERFORMING ASSETS, ETC. OF FINANCIAL INSTITUTIONS AND THE ESTABLISHMENT OF KOREA ASSET MANAGEMENT CORPORATION 16

(2) The annual amount of funds as referred to in the proviso to Article 41 (2) 1 of the Act means the annual amount of funds actually expended according to the operation plan as referred to in Article 42 (1) of the Act. ADDENDA Article 1 (Enforcement Date)

This Decree shall enter into force on November 23, 1997: Provided, That the provisions of Articles 5 and 6 shall enter into force on the date of its promulgation.

Article 2 (Repeal of other Acts and Subordinate Statutes) The Decree on the Korea Assets Management Corporation shall be repealed. Article 3 (Disposal of Residual Assets of Fund)

(1) The time of return of residual assets of the Fund under Article 2 (2) of the Addenda of the Act shall be within three months from the point of time of which the Fund completes the redemption of debts and disposal of acquired assets: Provided, That in cases where the redemption of debts and disposal of acquired assets have been mostly completed after the termination of the period of operation of the Fund, the residual property may be returned earlier under the approval of the Committee within a scope not impeding the redemption of residual debts. (2) The residual property of the Fund shall be returned in cash according to the rate of contribution to the Fund: Provided, That in cases where an agreement is reached with the relevant financial institution, it may be returned in kind by a method determined by the Committee. (3) The Corporation shall, when intending to return the residual assets of the Fund, prepare a list of assets and a balance sheet of the Fund in advance and obtain the approval of the Committee thereon, and upon the returning of the residual assets, it shall report to the Committee without delay, preparing a written report on the settlement of accounts. Article 4 (Transfer of Reserve to Capital)

(1) The reserve under Article 6 (2) of the Addenda of the Act shall be an amount obtained by deducting the book value of the assets in possession, taxes and public charges to be imposed, and liability-natured reserves to be appropriated from the sum of surplus profits and value of appraisal of the assets in possession as of the date preceding the date of registration of establishment of the Corporation (hereinafter referred to as the "date DECREE ON THE ACT ON THE EFFICIENT DISPOSAL OF NON-PERFORMING ASSETS, ETC. OF FINANCIAL INSTITUTIONS AND THE ESTABLISHMENT OF KOREA ASSET MANAGEMENT CORPORATION 17

of registration of establishment"). In such cases, the value of appraisal of the assets in possession shall be as classified in each of the following subparagraphs:

1. Real estate: The value appraised and assessed by an appraisal business operator under the Public Notice of Values and Appraisal of Lands, etc. Act within three months before the date of registration of establishment; and

2. Assets other than real estate: The value assessed by a method which is generally accepted to be fair and proper as the criteria or practice of corporate accounting on the date preceding the date of registration of establishment.

(2) The reserve under paragraph (1) shall revert to the Korea Development Bank on the date of registration of establishment and be considered to have been invested in the Corporation by the Korea Development Bank. (3) Other necessary matters concerning the transfer of the reserve under paragraph (1) shall be determined by the articles of incorporation. Article 5 (Special Cases of Payment of Initial Investment and Contribution, etc.)

With respect to the initial investment and contribution under Articles 9 and 22, financial institutions subjects of investment and contributions, calculation method of investment an contribution, time of payment, etc. shall be determined by the Establishment Committee under Article 3 of the Addenda of the Act (hereinafter referred to as the "Establishment Committee").

Article 6 (Special Cases of Preparation for Issuance of Bonds) Before the Corporation completes the registration of establishment, necessary matters concerning the issuance of the Bonds, such as application for the guarantee of obligations for the redemption of the principal and interest of the Bonds under Article 40 (4) of the Act shall be determined by the Establishment Committee.

ADDENDA Article 1 (Enforcement Date)

This Decree shall enter into force on the date of its promulgation. Articles 2 through 4 Omitted.

DECREE ON THE ACT ON THE EFFICIENT DISPOSAL OF NON-PERFORMING ASSETS, ETC. OF FINANCIAL INSTITUTIONS AND THE ESTABLISHMENT OF KOREA ASSET MANAGEMENT CORPORATION 18

ADDENDA Article 1 (Enforcement Date)

This Decree shall enter into force on the date of its promulgation. Article 2 Omitted.

ADDENDUM This Decree shall enter into force on the date of its promulgation. ADDENDUIM This Decree shall enter into force on the date of its promulgation. ADDENDA Article 1 (Enforcement Date)

This Decree shall enter into force on the date of its promulgation. Article 2 Omitted.

ADDENDA Article 1 (Enforcement Date)

This Decree shall enter into force on July 1, 2000. Articles 2 through 6 Omitted.

ADDENDUM This Decree shall enter into force on the date of its promulgation. ADDENDA Article 1 (Enforcement Date)

This Decree shall enter into force on the date of its promulgation. Articles 2 and 3 Omitted.

ADDENDA Article 1 (Enforcement Date)

This Decree shall enter into force on January 1, 2003. Articles 2 through 17 Omitted.

DECREE ON THE ACT ON THE EFFICIENT DISPOSAL OF NON-PERFORMING ASSETS, ETC. OF FINANCIAL INSTITUTIONS AND THE ESTABLISHMENT OF KOREA ASSET MANAGEMENT CORPORATION 19

ADDENDUM This Decree shall enter into force on January 30, 2006. ADDENDA Article 1 (Enforcement Date)

This Decree shall enter into force on the date of its promulgation: Provided, That each amendment to Presidential Decrees the date of which has not arrived even though they have been promulgated before the enforcement of this Decree from among the Presidential decrees to be amended pursuant to Article 2 of the Addenda shall enter into force on the date of the relevant Presidential Decree enters into force.

Article 2 Omitted.