DUE DILIGENCE AGREEMENT, 듀딜리전스 계약서, 실사 계약서, 영문 계약서

DUE DILIGENCE AGREEMENT

 

TABLE OF CONTENTS

 

Page

 

1.          Size of the Portfolio to be Offered ·················································· 1

2.          Scope of Professional Services ······················································ 1

3.          Fees and Expenses ····································································· 2

4.          Termination of Transaction ··························································· 3

5.          Non-Disclosure of Information ······················································ 4

6.          Indemnification and Contribution ··················································· 4

7.          Miscellaneous ·········································································· 5

Attachment A  Dispute Resolution Procedures ············································· 8

 

 

 

 

 

 

 

 

 

 

 

 

 

DUE DILIGENCE AGREEMENT

 

 

[DATE]

 

[AAA]

[Address]

 

 

Dear Sirs:

 

This Letter Agreement (the “Agreement”) confirms that the [AAA] (referred to herein as “[AAA]”) has engaged [BBB] (“[BBB]”) as its valuation agent to assist [AAA] in connection with the sale of a portfolio of non-performing loans, in (referred to herein as the “Transaction”), to a Special Purpose Corporation (“SPC”). The SPC and certain related companies (AMC and RC) will be formed specifically for this Transaction and owned [•] % by [AAA] and [•] % by an affiliate of [CCC] (“[CCC]”). [BBB] will assist [AAA] with this Transaction pursuant to the following terms and conditions:

 

1.          Size of the Portfolio to be Offered

  [AAA] will offer a portfolio of loans (the “Portfolio”) with a original principal balance

(“OPB”) of approximately KRW [•]

 

2.          Scope of Professional Services

2.1        [BBB] will act as [AAA]’s exclusive valuation agent in connection with the Transaction. Specifically, [BBB] will conduct its due diligence and valuation analysis, independent of [AAA] and [CCC], and in that role perform the tasks outlined below:

1. Review loan files and extract all relevant information;

2. Identify additional information required from sources other than [AAA], including legal and appraisal services;

3. Coordinate and manage the information received from such third party service providers and manage the costs;

4. Prepare a valuation analysis for each obligor relationship using an appropriate methodology;

5. Propose a fair market value of each NPL and for the overall NPL portfolio;

6. Assist [AAA] in developing their negotiation strategy in the negotiation process with [CCC] and in monitoring and managing the closing of the transaction;

7. Provide [AAA] with copies of the analysis performed by [BBB] and its agents in a written and electronic format with a reasonable explanation thereof; provided, however, that [AAA] sill not be provided with an electronic version of [BBB]’s proprietary valuation model; and

8. Other matters that [AAA] requests from time to time as [AAA] deems it necessary and appropriate for the purpose of this Agreement.

 

3.          Fees and Expenses

3.1        In consideration of such services, [AAA] agrees to pay [BBB] a fee equal to US$ [•] and to reimburse reasonable out-of-pocket expenses as defined in paragraph 3.3.

 

3.2        The fees payable to [BBB] pursuant to this agreement are in consideration for the various services described in Section 2 hereof, After commencement of the engagement [AAA] is permitted to make additions or deletions to the original Portfolio equal to or less than [•] percent of OPB of the Portfolio without incurring any additional fees. To the extent [BBB] is requested by [AAA] to perform additional due diligence or other financial advisory services not specifically set forth in this agreement, such fees shall be mutually agreed upon by [BBB] and [AAA] in writing, in advance, depending on the level and type of services required, and shall be in addition to the fees described above.

 

3.3        In addition to any fees that may be payable to [BBB] hereunder, [AAA] shall reimburse [BBB] for all reasonable out-of-pocket expenses of [BBB] expatriate personnel including but not limited to travel and transportation, accommodations, meals, document production and courier costs not to exceed US$ [•] in the aggregate. 

Except as otherwise stated in this paragraph, [AAA] will be responsible for all other costs incurred in connection with the Transaction, including fees and expenses of other advisors such as legal counsel. In consultation with [AAA], [BBB] will select and manage the legal advisors for this Transaction. [BBB] will retain real estate valuation experts, at its own expense, to evaluate selected collateral provided as security for [AAA]’s loans. The real estate experts to be hired and the number and selection of collateral to be evaluated will be determined by [BBB], with consideration of input from [AAA].

 

3.4        All amounts payable to [BBB] under the terms of this Agreement are net of Value Added Tax(“VAT”), withholding tax, and any other similar taxes (“Taxes”). All amounts charged by [BBB] will be invoiced together with Taxes where appropriate. All invoicing will be in US Dollars, except that expenses incurred in [Currency] will be invoiced in [Currency].

 

3.5        [AAA] shall pay such additional amounts to [BBB] as may be necessary in order that every payment of expenses payable or reimbursable (including real estate valuation experts) hereunder after deduction or withholding for or on account of any present or future tax, assessment or other governmental charge (including, without limitation, VAT) imposed upon or as a result of such payment to the [Name of the Country] or any taxing authority thereof or any other jurisdiction from which such payment or reimbursement may be made, will not be less than the amount provided for herein to be paid or reimbursed by [AAA].

 

4.          Termination of Transaction

4.1       Work under this agreement will be performed with the degree of skill and care that is required by current, good and sound professional procedures and practices, and in conformance with generally accepted professional standards.

[BBB] and [AAA] expect the valuation work will require a period of [•] days to complete. The [•] day period will begin one week from the day both parties execute this agreement. This timing estimate assumes adequate assistance is provided by [AAA] personnel including the preparation of loan files and other information relevant to the valuation of the portfolio.

  If the completion of the valuation is delayed due to unforeseen circumstances, [BBB] and [AAA] will mutually agree to the timeframe for the extension of the valuation and work together to avoid additional unforeseen delays.

 

4.2        Each of the parties shall have the right to terminate this agreement. Such termination will be effective [•] days after non-terminating party’s receipt of written notice of termination from the terminating party.

 

4.3        If [AAA] or [BBB] elects to terminate this agreement, [BBB] shall be entitled to bill to [AAA] the lesser of: (1) Its actual professional fees (at [BBB]’s normal hourly billing rates) and all out-of-pocket expenses incurred to date (including all amounts due to third party appraisers and up to US$ [•] of expenses incurred by [BBB]’s expatriate employees); or (2) the amount provided in Paragraph 3.1.

 

4.4        Payment of all amounts due under Section 4 will be due upon receipt of [BBB]’s invoice which will credit all professional fee payments and any expense reimbursement payments made by [AAA] through the date of termination.

 

5.          Non-Disclosure of Information

5.1        Except as may be required by law, any opinions or advice (written or oral) rendered by [BBB] pursuant to this Agreement are intended solely for the benefit and use of [AAA] (and its directors, management and attorneys), will be treated by the parties hereto as confidential and may not be disclosed publicly in any manner without the prior approval of [BBB], which approval shall not be unreasonably withheld. [AAA] will be permitted to present to [CCC], any or all written materials produced by [BBB] for this Transaction.

 

5.2        [AAA] will provide all financial and other information reasonably requested by [BBB] for the purposes of rendering services pursuant to this agreement. Except as may be required by law or court process, all non-public information provided by [AAA] will be treated as confidential and will not, without the prior consent of [AAA], be disclosed to any third parties in the absence of appropriate assurances of confidentiality, and [BBB] agrees that it will not make any use thereof except in connection with its services hereunder for [AAA]. Upon the completion of the Transaction, [BBB] shall return to [AAA] all the documents, data, information and other materials which belong to [AAA]. [BBB]’s obligation of confidentiality hereunder shall survive the termination of this Agreement for a reasonable period of time.

 

5.3        [BBB] may rely, without independent verification, on the accuracy and completeness of all information furnished by [AAA] or any other party or potential party to any Transaction contemplated by this Agreement.

 

6.          Indemnification and Contribution

6.1        [AAA] agrees to indemnify [BBB] and the other “Indemnified Parties” in accordance with the following:

 Since [BBB] will be acting on behalf of [AAA] providing valuation agent services pursuant to this Agreement and as part of the consideration for the agreement of  [BBB] to furnish its services under the Agreement, [AAA] agrees to (a) indemnify and hold harmless [BBB] and its affiliates, and the respective partners, directors, officers, shareholders, employees, and agents (collectively, the “Indemnified Parties”), to the fullest extent lawful, against any and all losses, claims, damages, or liabilities (collectively “Liabilities”) to which the Indemnified Parties may become subject arising out of or related to actions taken or omitted to be taken by an Indemnified Party in connection with any services rendered pursuant to the Agreement or any Transaction or Transactions, and (b) reimburse the Indemnified Parties for any legal or other expense reasonably incurred by them in respect thereof at the time such expenses are incurred (including expenses incurred in connection with investigating or defending any pending or threatened legal action, and whether or not the Indemnified Parties are a party to any litigation); provided however, [AAA] shall not be liable under the foregoing indemnity and reimbursement agreement in respect of any Liability if a court having jurisdiction shall have determined by final judgment that Liability resulted directly from the intentional misconduct or gross negligence by any Indemnified Party.

Except for the Liability resulting directly from the intentional misconduct or gross negligence by any Indemnified Party, [AAA] hereby explicitly waives its right to request compensation or reimbursement of any losses, claims, damages or liabilities to the Indemnified Party, If for any reason the foregoing indemnification is unavailable to any Indemnified Party or insufficient is unavailable to any Indemnified Party or insufficient to hold it harmless, except in the case where a court having jurisdiction shall have determined by a final judgment that [BBB] acted with intentional misconduct or gross negligence, the aggregate contribution of all Indemnified Parties to all losses, claims, damages, liabilities and expenses shall not exceed the amount of fees actually received by [BBB] pursuant to the Transaction or Transactions.

 

6.2        No Indemnified Party shall have any liability to [AAA] or any other person in connection with the services rendered pursuant to the Agreement except for any liability for losses, claims, damages or liabilities finally judicially determined by a court having jurisdiction to have resulted directly from such Indemnified Parties’ intentional misconduct or gross negligence.

 

7.          Miscellaneous

7.1        The Agreement shall be binding upon and inure to the benefit of [AAA] and [BBB] and their respective successors and assignees. However, neither party shall have the right to assign or delegate its rights or obligations under this Agreement to any party other than the affiliates of either [AAA] or [BBB] without the written consent of the other. Nothing expressed or implied in this Agreement is intended or should be construed to give to any person or corporation other than [AAA], [BBB], the other Indemnified Parties referred to in Section 6 of this Agreement and their respective successors or assignees, any rights or remedies under or by reason of this Agreement.

 

7.2        No partner, director, officer, employee, agent, shareholder or controlling person of [BBB] shall be subject to any personal liability whatsoever in connection with this Agreement.

 

7.3        The invalidity or un-enforceability of any part of a provision or any provision of this Agreement shall not affect the validity or enforceability of the remaining part of the same provision or any other provision of this Agreement, which shall remain in full force and effect pursuant to the terms thereof.

 

7.4        This Agreement incorporates the entire understanding of the parties regarding the subject matter hereof, supersedes all previous Agreements or understandings regarding the same, whether written or oral, and may be modified only by an express writing executed by the parties hereto.

 

7.5        Any controversy, dispute or claim arising out of the Parties’ rights duties and obligations shall be submitted first to conciliation and, if necessary, then to arbitration in accordance with Attachment A to this Agreement.

 

7.6        With prior consent from [AAA], [BBB] may, at its own expense, place announcements in financial and other newspapers and periodicals describing its services in connection with the Transaction.

 

7.7        This Agreement shall be governed by and construed in accordance with the laws of [Name of the Country].

 

If the foregoing correctly sets forth our understanding, please sign the acceptance below and return an executed copy of the Agreement to us.

 

[BBB] looks forward to working with you on this important engagement.

 

 

Very truly yours,

 

 

[BBB]

By :                       

Name : [•]

Title : [•]

 

 

 

ACCEPTED:

 

[AAA]

 

By :                            Date :                       

 

Name :                          Title :                       

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Attachment A

 

Dispute Resolution Procedures

 

1. Commitment to ADR. Any controversy or claim arising out of or relating to this Agreement or the services provided by the firm pursuant thereto shall be submitted first to voluntary conciliation, and if conciliation is not successful, then to binding arbitration, in accordance with the dispute resolution procedures specified herein. If any portion of this Agreement is held to be void, invalid, or otherwise unenforceable, the remaining portions of this Agreement shall remain in effect.

 

2.          Conciliation.

(a)         A dispute shall be submitted to conciliation by written notice to the other party or parties. If the parties cannot agree on an impartial conciliator, one will be designated by the Appointing Authority (as defined below) at the request of a party. Any conciliator so designated must be acceptable to all parties.

 

(b)         The process will be conducted as specified by the conciliator and agreed upon by the parties. The parties agree to discuss their differences in good faith and to attempt, with the assistance of the conciliator, to reach an amicable resolution of the dispute.

 

(c)         Conciliation will be treated as a settlement discussion and therefore will be confidential. The conciliator may not testify for either party in any later proceeding relating to the dispute. No recording or transcript shall be made of the conciliation proceedings.

 

(d)         Each party will bear sill bear its own costs of conciliation. The fees and expenses of the conciliator will be shared equally by the parties.

 

3.          Arbitration. If a dispute has not been resolved within [•] days after the written notice beginning the conciliation process (or a longer period, if so agreed by the parties), the dispute will be settled by arbitration. The arbitration will be conducted in accordance with the procedures specified in this document and, except as otherwise provided, the UNCITRAL Arbitration Rules as in force as of the date of the Agreement (the “Rules”).

 

 

4.          Appointing Authority: The Appointing Authority shall be the [Name of the Country] Commercial Arbitration Board, acting pursuant to its Procedures for Cases under the UNCITRAL Arbitration Rules.

 

5.          Administration. The arbitration shall be administered by the Appointing Authority. References to a particular association, commission, court of arbitration, secretariat or other administrator in the Rules shall be deemed to refer to the Appointing Authority. Until such time as the Appointing Authority or the Tribunal determines otherwise, all communications between parties and the Tribunal or any member thereof shall be made through the Appointing Authority.

 

6.          Number of Arbitrators. The arbitration shall be heard by a Tribunal consisting of three arbitrators, unless the Appointing Authority determines, based upon the size or complexity of the dispute, that the arbitration should be heard by a different number of arbitrators, choosing between one arbitrator and three.

 

7.          Appointment of Arbitrators.

(a)         If any arbitrators are to be selected by the parties under the Rules, the Appointing Authority shall provide each party with an identical list of at least [•] potential arbitrators, and the parties shall make their selections solely form that list. If a party does not make a selection within 20 days form transmission of the list, the Appointing Authority shall make the selection on behalf of the party. If both parties select the same arbitrator, the Appointing Authority shall allow the parties to make an alternate selection.

 

(b)         All arbitrators shall be impartial and independent. No party-appointed arbitrator may serve as chairperson of a Tribunal. Neither a sole arbitrator nor a chair-person of a Tribunal may be of the same nationality nor a domiciliary of the same national state as any party. A corporation, partnership or other entity shall be considered to have the nationality and be a domiciliary only of its principal place of business.

 

(c)         If, after the Tribunal has been appointed and the proceedings have begun, one of three arbitrators fails to participate in the arbitration, the two others shall have the power in their discretion to continue the arbitration and to make any decision, ruling or award. If the two other arbitrators determine not to continue the arbitration in the absence of the third, the Appointing Authority shall declare the office vacant.

 

 

(d)         In the event that an arbitrator position becomes vacant or an arbitrator must be replaced for any reason, a substitute shall be chosen in the same manner and in  accordance with the rules under which the original arbitrator was selected, and the Tribunal shall determine at its discretion whether all or part of an y prior hearings shall be repeated.

 

(e)         No potential arbitrator may serve on the panel unless he or she has agreed in writing to abide and be bound by the procedures and rule specified herein.

 

8.          Place of Arbitration. The Place of Arbitration shall be determined in accordance with the Rules and the award shall be deemed an award of the Place of Arbitration. Unless otherwise agreed by the parties, the Tribunal shall not meet, other than for consultation among its members, at location other than the Place of Arbitration.

 

9.          Language. The language of the arbitration and the administration thereof shall be [•].

 

10.        Choice of law. To the extent permitted by the law of the Place of Arbitration, the Tribunal shall decide all matters in dispute based on general principles of equity and fairness. In all cases the Tribunal shall decide in accordance with the terms of the contract and shall take into account the usages of the trade applicable to matter at issue.

 

11.         Discovery and production of Evidence. No discovery will be permitted, nor shall any party otherwise be required to make available any documents, witnesses, things, or other evidence, unless expressly ordered by the Tribunal upon a determination by the Tribunal that such discovery or production is necessary for the proper conduct of the arbitration.

 

12.        Available relief. The Tribunal shall have no power to award (i) damages inconsistent with the Agreement of (ii) punitive damages or other damages not measured by the prevailing party’s actual damages; and the parties expressly waive their right to obtain such damages in arbitration or in any other forum. In no event, even if any other portion of these provisions is held to be invalid or unenforceable, shall the Tribunal have power to make an award or impose a remedy that could not properly be made or imposed by a court deciding the matter at the Place of Arbitration.

 

13.        The Award. The award shall be signed by a majority of the arbitrators. All arbitrators shall be given an opportunity to sign the award. No arbitrator shall issue any statement of reasons in opposition to, or explaining any failure to sign, the award. Any monetary award shall be made and shall be payable in United States Dollars.

 

 

14.        Confidentiality. All aspects of the arbitration shall be treated as confidential. Neither the parties, the Appointing Authority, nor the arbitrators may disclose the existence, content or results of the arbitration, except as necessary to comply with legal or regulatory requirements. Before making any such disclosure, a party shall give written notice to all other parties and shall afford such parties a reasonable opportunity to protect their interest.

 

15.        Binding Effect; Exclusivity. The dispute resolution procedures specified herein, including such right to interim judicial relief as may be permitted by the Rules, shall be the parties’ exclusive remedy for any dispute, and the parties waive any right to appeal or challenge any arbitration award. Any award by the Tribunal will be binding on the parties, and judgment on the award may be entered in any court having jurisdiction.

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