EXHIBIT 10.27
LEASE AGREEMENT
This Lease Agreement is entered into by and between Jung Ryool Xxx, the owner of
Shingu Building, 620-2 Shinsa-dong, Gangnam-gu, Seoul (hereinafter referred to
as the "Lessor") and GRAVITY Co., Ltd (hereinafter referred to as the "Lessee")
for the purpose of leasing certain space within the confines of the Shingu
Building owned by the Lessor (hereinafter referred to as the "Premises").
Article 1. (Premises)
The Lessor shall lease the following Premises to the Lessee and the Lessee shall
lease the same from the Lessor.
Description of the Premises
Shingu Building, 620-2 Shinsa-dong, Gangnam-gu, Seoul
Space (xxxxx) Intended use Value per xxxxx (\) Total (\)
------------- ------------ ------------------ -------------
1st floor 214 Office 10,000,000 2,140,000,000
2nd floor 143 Office 6,000,000 858,000,000
80 Office 5,000,000 400,000,000
3rd floor 208 Office 5,000,000 1,040,000,000
15 Office 4,000,000 60,000,000
4th floor 223 Office 4,000,000 892,000,000
5th floor 223 Office 4,000,000 892,000,000
6th floor 214 Office 4,000,000 856,000,000
-------------
Total 7,138,000,000
-------------
The Lessee shall use the Premises as office space only and for no other
purposes.
Article 2. (Term of Agreement)
(1) This Agreement shall be effective from the date of agreement, and the lease
term for the Premises shall be from August 1, 2004 to December 31, 2005.
Termination of this Agreement by either party shall be made by providing written
notice to the other party at least 90 days of the expiry of this Agreement,
provided that absent written termination notice from one party, the lease term
shall be deemed to have been extended for one year. The same shall apply for
further renewals.
(2) Partial termination on the Premises shall not be permitted except through
mutual written agreement of the parties.
Article 3. (Security Deposit)
(1) The security deposit shall be the amount separately determined per floor
pursuant to Article 1. The Lessee shall pay the Lessor KRW 3,800,000,000, as
security deposit for the lease of the Premises, as follows:
Date Percentage Amount
---------------------- ---------- -------------
Down-Payment The existing amount to % 3,800,000,000
be transferred
-------------
Total % 3,800,000,000
-------------
(2) The security deposit shall bear no interest.
(3) The Lessee shall not apply the security deposit to pay a maintenance fee,
nor shall it transfer its claim for refund of the security deposit to a third
party or establish a security interest or other liens on such claim.
Article 4. (Monthly Rent) -- VAT exclusive
(1) The lease amount of KRW 3,338,000,000, which amount is net of the security
deposit, shall be paid in the form of monthly rent in the amount of KRW
33,380,000, or 1% per month of such lease amount. Payment of the monthly rent
shall start for the
month starting on August 1, 2004 and be payable on the 25th day of each month,
or the next day if the 25th day is a public holiday.
(2) If the lease term hereunder commences or ends in the middle of a month, the
rent for such month shall be prorated based on the number of days in that month
from the commencement date of this Agreement or to the termination date of this
Agreement.
Article 5. (Maintenance Fee)
The Lessee shall pay a basic building maintenance fee of KRW 15,000 per xxxxx
(exclusive of the value-added tax) in addition to the utility charges for water
and electricity. Such maintenance fee shall be payable to the building
administrator on the 25th day of each month, or the next day if the 25th day is
a public holiday.
Article 6. (Adjustment of Security Deposit, Rent and Maintenance Fee)
In the case of the following, the Lessor may adjust the security deposit, rent
and/or maintenance fee by giving thirty days' prior written notice to the Lessee
during the lease term or an extended term thereof after reaching an agreement
with the Lessee. The adjusted security deposit, rent and maintenance fee shall
be effective as of the 1st day of the following month:
(1) Taxes and dues related to the Premises or the Lessor's business are
increased, or expected to increase, significantly;
(2) The building maintenance costs are significantly increased; or
(3) There is a substantial change in inflation or other economic conditions.
Article 7. (Initial Date in Computing the Rent)
If the Premises cannot be used from the commencement date of the Agreement for a
reason attributable to the Lessor, the rent shall be computed from the actual
date of use.
Article 8. (Arrearage in Security Deposit, Rent and Other Expenses)
If the Lessee fails to pay the security deposit, rent and other expenses by the
due date, it shall pay, in addition to the unpaid amount, a penalty equal to the
number of the days in
arrearage times the annual default interest rate for credit loans then
prevailing in the Lessor's securities company.
Article 9. (Order of Application of Expenses)
Lessee's payment of expenses shall be in the following order: the late payment
penalty, the maintenance fee, the rent and the security deposit.
Article 10. (Return of the Security Deposit)
Upon the termination of this Agreement for reasons including the expiry or
cancellation of this Agreement, the Lessor shall return the security deposit to
the Lessee within 10 days from the date of the Lessee's vacating the Premises,
provided that the Lessor shall make such payment after deducting any expenses or
remaining liability of the Lessee hereunder. The vacating date shall in
principle be the vacating date following completed restoration pursuant to
Article 29.
Article 11. (Insurance)
If the premium for the fire insurance for the building is increased due to the
Lessee's act or installation while in residence in the building following
interior renovation during the term of the lease, the Lessee shall pay the
Lessor the amount of such increase.
Article 12. (Value-Added Tax)
The Lessee shall be liable for any value-added tax arising under this Agreement.
Article 13. (Improvement and Installation in the Premises)
(1) The Lessee, at its expense and with prior written consent of the Lessor,
may do the following, provided that the Lessor may control and supervise
the construction to ensure uniformity of the building.
i) Installation or alteration of interior decorations, fabrications,
internal walls, and promotional materials in the Premises.
ii) Installation, addition, relocation or alteration of facilities other
than existing facilities, attachment or relocation of power circuits,
installation of telephone,
supply and drainage of water, etc.
(2) The Lessee hereby waives any and all rights to claim the costs and
expenses incurred pursuant to Paragraph 1 and any appurtenances thereto.
Prior to vacating the Premises, the Lessee must restore the Premises to the
original condition at its own expense.
(3) If the Lessee fails to restore in accordance with Paragraph 2 or to the
Lessor's satisfaction, the Lessor may deduct from the security deposit the
costs and expenses necessary to complete such restoration.
(4) The Lessee shall be liable for any acquisition tax, property tax and any
other additional taxes and dues incurred in connection with the
installation, expansion, relocation or modification of the facilities and
equipment set forth in paragraph 1, regardless of the reason therefor.
Article 14. (Repairs)
(1) Any cost of repair for the natural tear and wear of the walls, ceilings,
floors, etc. of the Premises shall be borne by the Lessor, provided that
any cost of repair the due to the negligence of, or incurred by necessity,
of the Lessee shall be borne by the Lessee.
(2) The Lessee shall give prompt notice upon discovery of the necessity for
repair as described in paragraph 1 and consult with the Lessor prior to
making repairs of its own.
(3) If the Lessor determines that, in order to preserve the building in its
present condition, repair becomes necessary due to the Lessee's negligence
regarding its duties under paragraphs 1 and 2, the Lessor shall make
necessary repairs or take other steps and the Lessee shall reimburse the
Lessor for the actual costs of such repairs or actions.
(4) The Lessee hereby waives any right of claim reimbursement of the costs and
expenses borne by the Lessee under paragraph 1.
Article 15. (Prohibition on Assignment and Sublease)
The Lessee may not under any circumstances assign its rights and obligations
under this Agreement, or sublease all or a part of the Premises, to a third
party.
Article 16. (Restriction on the Use of the Premises)
(1) The Lessee shall not, without the Lender's prior written consent, permit a
third party to use the Premises nor post the title of the residence on the
Premises.
(2) The Lessee shall not set up residence on the Premises, provided that, upon
the Lender's prior written consent, the Lessee may have employees stationed
there on a rotating basis.
Article 17. (Protection of Properties)
(1) The Lessor shall deploy the security guard in order to secure the lobbies,
corridors, and any other common areas in the building.
(2) The Lessee shall be solely responsible for maintaining security for its
properties on the Premises. Unless the Lessee can establish the Lessor's fault,
the Lessor shall not be responsible for any damages to the Lessee's properties
in the building as a result of fire, theft or otherwise.
Article 18. (The Lessee's Obligations)
The Lessee, its employees and visitors shall comply with all applicable laws
relating to the use of the Lessee's office and shall comply with all of the
Lessor's policies and guidelines related to the use of the Premises and related
facilities.
Article 19. (The Lessee's Negative Covenants)
The Lessee or its employees shall not do any of the following:
(1) Neglecting to remove disturbances from a passageway or the commons areas, or
installation or display of signs and advertisements;
(2) Carrying onto or storing in the Premises inflammable, combustible or other
hazardous materials, or articles that are harmful to the human body;
(3) Carrying onto or using on the Premises any electric heater, air-conditioning
or heating equipment other than as supplied or permitted by the Lessor;
(4) Noisy acts, use of musical instruments, breeding of pets other than fish in
the tank or other acts that create discomfort and inconvenience to other
lessees;
(5) Destroying, staining or altering the structures, equipment or facilities
installed by the Lessor;
(6) Selling or habitually drinking alcoholic beverages or cooking on the
Premises; or
(7) Providing business quarters in the building for merchants or shoeblacks
without the Lender's permission.
Article 20. (Access Rights)
(1) The Lessor shall seek prior consent of the Lessee if the Lessor or its agent
must enter the Premises for purposes of general repair, maintenance and
inspection for preservation or in order to show the Premises to potential
lessees prior to the expiration of this Lease.
(2) The Lessor may provide notice subsequent to entry in the case of emergency
measures taken for reasons of security, inspection, repair, sanitation, fire and
crime prevention or other relief measures.
Article 21. (Exclusion of the Lessor's Liability)
(1) The Lessor shall not be held liable for any damage suffered by the Lessee,
its employees or visitors due to a reason other than the Lessor's fault or due
to a legal or de facto force majeure event, including earthquake, storm, flood,
war and riots.
(2) The Lessor shall not be held liable for any deficiency in service or in the
common area arising from the Lessee's repair, alteration, and improvement of the
Premises.
Article 22. (Appointment of Agent)
For efficient performance of the respective rights and obligations hereunder,
the parties shall appoint an agent and promptly notify the other party of such
appointment. The foregoing shall also apply in the case of a change of the
agent. The acts of the agent shall have the same binding effect as the
expression of intent by the parties hereto.
Article 23. (Change of the Lessor)
If there is a change in the ownership, trade name, management right and control
with respect to the Premises described in Article 1, this Agreement shall
continue in effect and the successor Lessor or administrator shall faithfully
execute all the provisions of this Agreement.
Article 24. (Change of the Lessee)
The Lessee shall promptly notify the Lessor in writing of any significant change
in the Lessor's legal status or registered commercial details such as address,
trade name, representative or business purpose,
Article 25. (The Lessor's Right of Disposal)
(1) The Lessee, its legal representative or executor may not avoid their
obligations hereunder due to their absence in Korea. If this Agreement is
terminated during the absence of the Lessee in Korea, the Lessor may take
possession of the Premises and remove the Lessee's properties to a warehouse or
elsewhere. If this Agreement is terminated without full payment of the Lessee's
obligations hereunder, the Lessor may sell all of the Lessee's belongings and
properties in accordance with the auction procedure determined by the Lessor.
(2) In case of an auction described in Paragraph 1, the Lessor shall retain
preferential right to any unpaid liabilities of the Lessee, including expenses
related to transporting and storing the Lessee's belongings and properties.
Article 26. (Indemnification)
(1) If the Lessee, its employees or customer intentionally or negligently causes
bodily harm or property damages to the Lessor, other lessees or a third party,
the Lessee shall immediately notify the Lessor thereof in writing and indemnify
for such harm or damages.
(2) The amount of indemnification shall be determined by applicable law.
Article 27. (The Lessor's Termination Rights)
(1) If the Lessee does any of the following, the Lessor may demand a cure. If no
cure is made within two weeks, the Lessor may terminate this Agreement:
1) The Lessee fails to pay, or is late in paying, rent, maintenance fee or
other expenses payable under this Agreement for two or more times;
2) The Lessee becomes subject to an order of attachment, provisional
attachment or provisional disposition due to defaults under other obligations,
or becomes subject to an application for auction or bankruptcy, etc. and the
Lessor determines that the Lessee will have difficulty in performing its
obligations hereunder due to a significant change in the asset, credit or
business, etc. of the Lessee;
3) The Lessee breaches any provision hereof but does not cure such breach
despite the Lessor's demand therefor.
(2) Under paragraph 1, the Lessor may terminate this Agreement at any time,
regain possession of the Premises and take relevant legal steps.
Article 28. (Expiry)
This Agreement shall terminate upon the occurrence of one of the following
events:
(1) Expiration of the term or extended term of this Agreement; or
(2) Termination or cancellation of this Agreement in accordance with its terms.
Article 29. (Vacation of Premises; Restoration)
(1) Prior to termination of this Agreement, the Lessee shall return all of the
Lessor's properties and belongings and surrender to the Lessor all of the
Premises, including the keys, other properties and other entrusted goods
belonging to the Lessor.
(2) The details of vacating the Premises shall be in accordance with this
Agreement and attachments thereto.
(3) If until the lease termination date the Lessee, due to its own fault, fails
to remove its properties or belongings out of the Premises or fails to surrender
to the Lessor the Premises in its original condition, the Lessee shall pay to
the Lessor the actual amount
of damages suffered from the lease termination date t the completion of such
surrender or restoration.
(4) If the Lessee does not vacate the Premises and continues to use and occupy
the Premises after the lease termination date, the Lessor may take measures such
as suspending the supply or electricity and water or shutdown of the entrance
door, and the Lessee shall not raise any objection thereto.
Article 30. (Use of Parking Facilities)
The Lessee may use the parking facilities for up to 10 cars free of charge.
The Lessee shall be liable for all accidents (personal harm, proprietary damage,
damage to the building, etc.) in the course of parking in and departing from the
parking lot.
Article 31. (Amendment)
The parties may amend or modify the terms of this Agreement by mutual
consultation even prior to the expiration of the term of this Agreement if both
parties agree that there is a justifiable or unavoidable cause to so amend or
modify.
Article 32. (Administrator)
(1) The Lessor may appoint an administrator to properly manage the Premises and
the building.
(2) The administrator described in Paragraph 1 shall be an agent of the Lessor
with the same rights and obligations as the Lessor with respect to the Lessee.
Article 33. (Application of General Laws, Regulations and Others)
Any matter not specified herein or any disputes regarding this Agreement shall
be determined by mutual consultation in accordance with laws and general
business practices customarily applicable to leases.
Article 34. (Jurisdiction)
Any litigation over this Agreement shall be adjudicated at a civil district
court having proper jurisdiction.
Article 35. (Preservation of Security Interest)
(1) In order to secure its obligations to return the security deposit to the
Lessee, the Lessor shall, immediately upon the receipt of the security deposit
described in Article 3, deliver to the Lessee documents necessary to establish
kun-mortgage over the building and land.
(2) The expenses incurred in establishing said kun-mortgage or notarization with
regard to the security deposit shall be borne by the Lessee.
August 1, 2004
Lessor: Xxxxxx Xxxxxxxx, 000-0 Xxxxxx-xxxx, Xxxxxxx-xx, Xxxxx
Jung Ryool Xxx, as owner of Shingu Building /s/
Lessee: GRAVITY Co, Ltd.
Representative Director Jung Hwi Yung /s/
