1. The defendant's appeal is dismissed.

2. The costs of appeal shall be borne by the Defendant.

Purport of claim and appeal

1..

1. Basic facts

A. 1) Dongnam Bank Co., Ltd. (Korea Housing and Commercial Bank on June 1998; hereinafter “Housing Bank”) (hereinafter “Housing Bank”)

B) As between A on October 9, 1995, a credit-limit trading agreement between A and a credit subject discount notes, credit limit of KRW 4 billion, transaction period of October 9, 1996, up to 19% per annum of 19% per annum (hereinafter “instant credit agreement”).

B. The Defendant concluded the instant credit agreement, and the Defendant jointly and severally guaranteed A’s obligations under the instant credit agreement.

The letter of continuing guarantee prepared by the defendant at the time includes the following matters:

1. The debtor: A;

2. Scope of guaranteed liabilities: Obligations arising from loans of bills, bills, discount of notes, instrument loans, current and future loans, payment guarantee (including bonds guarantee), sales claims, mutual installment transactions, mutual savings account transactions, securities lending, foreign exchange and other credit transactions, guaranteed liabilities, interest obligations on bills or checks, interest obligations, compensation for delay, liability on the debtor or the founder, all other incidental obligations related to credit transactions; and all other obligations related to credit transactions. The guarantee limit under Article 1 (including all interest, compensation for delay, and incidental obligations) shall be 4.94 billion won.

2) On October 10, 1996, the Housing Bank entered into an agreement with A to extend the trading period of the instant credit agreement to October 9, 1997. On May 8, 1998, the Housing Bank agreed to extend the credit limit of the instant credit agreement to KRW 700 million and to extend the trading period to October 9, 1998. On June 5, 1998, the Housing Bank again concluded an agreement to increase the credit limit of the instant agreement to KRW 700 million. On March 31, 1999, the Housing Bank jointly and severally guaranteed the said three changes agreement. (B) On March 31, 1999, the Housing Bank jointly and severally guaranteed the credit limit of the instant agreement.