Exhibit 4.2
English Translation
LEASE AGREEMENT
This LEASE AGREEMENT (this "AGREEMENT") is hereby made and entered into by and
between:
LESSOR: Jin-Ho PARK, the representative of Fine Tower located at No. 24 of 826
Yeoksam-dong Gangnam-gu, Seoul
and
LESSEE: Young-Bae KOO, the representative director of Interpark G-Market Inc.
located at 6-8F LIG Insurance Bldg.. 649-11 Yeoksam-dong Gangnam-gu, Seoul.
The Parties hereby agree as follows:
DESCRIPTION OF THE LEASED PREMISES
The 9th , 10th, 11th, and 12th floors of the building at
No. 24 of 826 Yeoksam-dong Gangnam-gu, Seoul
Total 1,137.20 pyung
Including common area.
1. Term of Lease
This Agreement shall be effective from October 21, 2006 to October 20, 2008 (the
"LEASE TERM").
1. Security Deposit THREE BILLION ONE HUNDRED TWENTY-SEVEN MILLION AND THREE
HUNDRED THOUSAND KOREAN WON (KRW 3,127,300,000)
1. Monthly Rent FORTY-SIX MILLION NINE HUNDRED AND NINE THOUSAND AND FIVE
HUNDRED KOREAN WON (KRW 46,909,500) (EXCLUDING VAT TO BE BORNE SEPARATELY BY
LESSEE)
1. MONTHLY MAINTENANCE FEE Thirty million seven hundred and four thousand
and four hundred Korean Won (KRW 30,704,400) (excluding VAT to be borne
separately by Lessee) (Any increase in the maintenance fee shall be made equally
among lessees.)
Lessee must pay for electricity. The maintenance fee includes gas used
between 8 am and 7:30 pm on weekdays and between 8 am and 1 pm on Saturdays.
Lessee must pay separately for gas used during other hours and heating or air
conditioning on holidays.
ARTICLE 1 (LEASE)
(1) Lessor shall lease to Lessee, and Lessee shall lease from Lessor, the
Leased Premises described above.
(2) Lessee shall have no rights in the property other than to take possession
of, and use, the Leased Premises as tenant.
(3) Lessee may not use the Leased Premises as an exhibition hall, warehouse,
private educational institute (hagwon) or for any purposes other than as a
BUSINESS OFFICE SPACE.
ARTICLE 2 (SECURITY DEPOSIT)
(1) Upon the execution of this Agreement, Lessee shall pay Lessor the security
deposit described above as follows:
Down payment Upon the execution of this Agreement KRW 300,000,000
Interim payment October 10, 2006 KRW 1,200,000,000
Balance October 21, 2006 KRW 1,627,300,000
(2) No interest shall accrue on the security deposit in the preceding
Paragraph.
(3) Lessee may not credit the security deposit toward the payment of monthly
rent or other charges and may not assign its right to claim return of the
security deposit nor establish a pledge or any other encumbrance on such
right.
(4) Lessor may make deduction from the security deposit without Lessee's
consent only if Lessee has defaulted on the monthly rent or other charges,
in which case Lessor shall notify Lessee and Lessee may not object to
Lessor's deduction made in Lessor's sole discretion.
ARTICLE 3 (CALCULATION OF MONTHLY RENT)
(1) Regardless of the date on which Lessee moves into the Leased Premises, the
monthly rent shall be calculated from the commencement date of the Lease
Term.
(2) If the Lease Term commences or terminates in the middle of a month, the
monthly rent for such month shall be calculated on a daily pro-rated basis.
(3) Lessee shall pay the monthly rent even if it fails to use the Leased
Premises during the Lease Term, except where Lessee's failure to use the
Leased Premises was due to a defect in the Leased Premises or other causes
not attributable to Lessee.
(4) Lessee shall make advance payment of monthly rent, maintenance fee and
other charges to Lessor by the 5th day of each month.
ARTICLE 4 (DEFAULT INTEREST)
If Lessee defaults on its financial obligations toward Lessor under this
Agreement, such as payment of rent and maintenance fee, Lessee shall pay Lessor,
in addition to the unpaid amount, default interest accrued thereon at the annual
rate of 25%.
ARTICLE 5 (EXTENSION OF LEASE TERM)
Unless the Parties express otherwise in writing by at least three (3) months
prior to the expiration of the Lease Term, the Parties agree that the Lease Term
shall be extended for an additional term of one (1) year on the same terms and
conditions as those herein.
ARTICLE 6 (EARLY TERMINATION)
1. If either Party intends to terminate this Agreement prior to the expiration
of the Lease Term for its own reasons, the Party shall give written notice
to the other Party at least three (3) months in advance, in which case the
other Party shall not raise any objection and this Agreement shall be duly
terminated.
2. Notwithstanding the above, in the event Lessee terminates this Agreement
for its reasons prior to the expiration of the Lease Term, Lessee shall pay
Lessor the monthly rent and maintenance fees for three months as damages,
and the return of the security deposit shall be delayed for three months.
ARTICLE 7 ADJUSTMENT OF SECURITY DEPOSIT AND MONTHLY RENT
Lessor may increase the security deposit and the monthly rent described above by
consultation with Lessee if such increase is inevitable due to: (i) increase or
decrease in public charges or dues on the Leased Premises; (ii) increase in
security deposits and monthly rents in similar industries; or (iii) change in
cost of living and other economic circumstances.
ARTICLE 8 (INSTALLATION AND ALTERATION OF FACILITIES WITHIN LEASED PREMISES)
Lessee shall, at its own expense obtain Lessor's prior written consent by
submitting an Application for Approval of Construction Work with a drawing
attached to it at least two weeks prior to engaging in either of the following
acts:
1. Installing or altering partitions, windows or interior furnishings within
the Leased Premises; or
2. Installing, moving, or altering electric lines, telephone lines, lighting,
drainage or other facilities. Lessor's consent shall be invalid unless in
writing. Lessor may supervise the works for purposes of ensuring structural
unity of the building.
ARTICLE 9 (USE OF EXCLUSIVE PARKING LOT)
1. Lessee may park up to four vehicles (per floor) free of charge in the
building's parking lot designated by Lessor, and visitors may park for a
parking fee. The car lift may not be used between 8 pm and 8 am the next
day.
2. Lessor shall not be liable for any damage to, or theft of, vehicles or
freight therein resulting from fire, an act of God, or any other unexpected
accident, if such incident is not attributable to Lessor and has occurred
notwithstanding Lessor's fulfillment of duty of care.
3. Lessee shall be liable for any damage done to the parking lot, any
facilities annexed thereto or the vehicles of other persons resulting from
negligence or willful misconduct of Lessee or its related parties.
4. Lessor shall not be liable for any damage arising out of an accident
resulting from negligence or willful misconduct of Lessee or its related
parties in using the car lift.
5. Any and all matters regarding parking order shall be subject to the
instructions of Lessor.
ARTICLE 10 (PROTECTION OF PROPERTY)
Lessee shall be solely responsible for the security of its property, and Lessor
shall not be liable
for loss of lives or any damage resulting from fire, theft, disaster, or any
other force majeure event, unless Lessor was in breach of its customary duties
as building manager prescribed under the law.
ARTICLE 11 (PROHIBITION OF ASSIGNMENT AND SUBLEASE)
(1) Lessee may not assign, resell, sublease (including sublease in part) its
rights in this Agreement, nor grant a pledge or encumbrance on this Lease
to a third party.
(2) Lessee may not claim any rights including premium in accordance with the
terms specified herein.
(3) In the event that Lessee breaches any of the above provisions Lessor may
immediately terminate this Agreement without notice and Lessee may not
raise any objection to such termination.
(4) Lessee may not allow a third party to share or use the Leased Premises or
post the name of the third party in connection with the Leased Premises
without Lessor's written consent.
ARTICLE 12 (PROHIBITION OF RESIDENCE)
Lessee may not use the Leased Premises as residence, provided, however, that
Lessee may employ night watchmen on a shift basis upon written consent of
Lessor.
ARTICLE 13 (PROHIBITIONS)
Lessee may not engage in any of the following acts:
1. Installing or posting of signboards or advertisement repulsive to the
public or obstructive to common facilities or abandon appliances, supplies,
or goods;
2. Bringing in or keeping any inflammables, dangerous goods or other goods
that are harmful or offensive to the human body or that may damage property
and any other objects the use of which is banned by Lessor;
3. Making noises, playing musical instruments, and keeping pets other than in
aquariums;
4. Installing exterior signboards;
5. Using vending machines and individual heating or cooling equipment; or
6. Any act in violation of the management agreement attached hereto.
ARTICLE 14 (OBLIGATION TO NOTIFY)
Lessee shall without delay notify Lessor in writing, with any necessary
documents attached thereto, if:
1. its trade name or representative has changed; or
2. it has changed from a sole proprietorship into a corporation or vice versa.
ARTICLE 15 (OBLIGATIONS OF LESSEE)
Lessee and its employees must comply with all laws and regulations in conducting
business and comply with all rules set by Lessor regarding the maintenance, use
and management of the Leased Premises and its facilities.
ARTICLE 16 (TERMINATION)
In the event of any of the following, Lessor may demand correction by Lessee
and, if Lessee fails to make correction within 15 days after Lessor's request
for correction, may terminate this Agreement immediately:
1. Lessee has defaulted on its financial obligations such as payment of the
rent and other charges payable to Lessor for not less than one (1) month;
2. Lessee has damaged Lessor's reputation and credit;
3. Lessee has breached any of the provisions herein or any of the rules and
guidelines provided by Lessor;
4. Lessee has violated any law or regulations;
5. a third party has attached, provisionally attached, or made provisional
disposition of the security deposit, or Lessee has been declared
quasi-incompetent, incompetent, or bankrupt, or has become subject to a
material cause, which renders the continuation of this Agreement
impossible; or
6. a need has arisen to use the Leased Premises for public interest.
ARTICLE 17 (EXPIRATION)
This Agreement shall expire if:
1. the Lease Term has expired;
2. this Agreement has been terminated by Lessor pursuant to Article 11(3) and
the preceding Article; or
3. this Agreement has been terminated pursuant to Article 6.
ARTICLE 18 (RETURN OF SECURITY DEPOSIT)
In the event of expiry or termination of this Agreement pursuant to the
preceding Articles, Lessor shall return the security deposit to Lessee
concurrently with Lessee's surrender of the Leased Premises to Lessor, provided,
however, that any and all remaining liabilities payable by Lessee to Lessor
hereunder, including rent and maintenance fee, shall be deducted from the
security deposit by Lessor, and the balance, if any, after such deduction shall
be refunded to Lessee.
ARTICLE 19 (LIMITATION OF LIABILITY OF LESSOR)
Lessee shall be solely responsible for the safe management of its property, and
Lessor shall not be liable for any damage resulting from fire or theft or any
other loss or damage within the Leased Premises, unless Lessee proves that such
loss or damage was caused by the negligence of Lessor.
ARTICLE 20 (INDEMNIFICATION)
(1) Lessee shall manage the Leased Premises with the care required of a good
manager.
(2) In the event Lessee, its employees, or customers have willfully or
negligently caused damage to Lessor, Lessee shall immediately notify Lessor
and indemnify Lessor against such damages.
(3) The amount of damages shall be determined by mutual consultation based on
the market price at the time of indemnification.
ARTICLE 21 (PAYMENT ALLOCATION)
Lessee's payment shall be allocated in the following order: default interest,
maintenance fee, rent, and security deposit.
ARTICLE 22 (DEFINITION OF EMPLOYEES)
For the purpose of this Agreement, Lessee's employees shall mean any and all
officers and employees engaged in the business of Lessee and any other employees
related to the business operations of Lessee.
ARTICLE 23 (VACATION AND RESTORATION)
(1) Lessee shall remove its possessions and property from the Leased Premises
by the day preceding the expiration date hereof in case of expiration of
the Lease Term, or by the vacation date designated by Lessor in case of
early termination of this Agreement. Lessee shall vacate the property of
Lessor after restoring the same to its original condition as described in
the construction completion drawing.
(2) Lessee agrees that at vacation, it shall not claim the return of the cost
of installing fixtures or the cost of interior work under Article 11 on the
ground that they were performed at Lessee's cost, claim any lien or claim
for any other rights or payment against Lessor.
(3) If Lessee breaches Paragraph (1) above for its own reasons, Lessee shall
pay Lessor an amount equivalent to the usual rent and other charges
calculated from the expiration date hereof or the vacation date designated
by Lessor until the actual date of vacation or restoration.
(4) In the event that the Leased Premises are not restored for a cause
attributable to Lessee, Lessor may, at its discretion, undertake
restoration work and apply the security deposit of Lessee toward the
payment of the cost and expenses associated therewith, and Lessee shall not
raise any objection, civil or criminal.
ARTICLE 24 (VACATION ON BEHALF OF LESSEE)
(1) If Lessee fails to remove its property and possessions from the Leased
Premises after the expiration of the Lease Term, Lessor may, at Lessee's
responsibility and expense, remove the same to the address of Lessee or its
guarantor specified herein below, provided, however, that if such removal
is unfeasible under special circumstances, Lessor may, at Lessee's
responsibility and expense, have Lessee's property and possessions in
custody of a third party.
(2) Lessor shall not be liable for any and all damage arising out of, or in
connection with, the removal according to the preceding Paragraph.
(3) In the event of Paragraph (1), Lessee shall pay Lessor an amount equivalent
to the usual rent and other charges calculated from the expiration date
hereof to the date of removal or the date on which Lessee's property and
possessions are placed under the custody of a third party.
(4) In the event of Paragraph (1), Lessee may not protest against Lessor on
grounds of invalidity of this Agreement or other grounds.
ARTICLE 25 (CONSTRUCTION)
Any discrepancy in interpretation of this Agreement between the Parties shall be
resolved in accordance with the applicable laws.
ARTICLE 26 (SETTLEMENT BEFORE LITIGATION)
In order to prevent any possible disputes that may arise during or after the
Lease Term, the Parties agree to reach a settlement before litigation with
respect to the vacation and return of the security deposit hereunder. Any
expenses incurred in connection therewith shall be borne by the respective
Parties.
ARTICLE 27 (JURISDICTION)
Any lawsuit arising out of, or in connection with, this Agreement shall be
brought before the competent court having jurisdiction over the address of
Lessor.
ARTICLE 28 (OTHER)
Any matters not specified hereunder shall be subject to rules and guidelines
provided by Lessor.
IN WITNESS WHEREOF, this Agreement shall be made in two (2) counterparts,
executed by both Parties and one counterpart kept by each Party.
* Special Conditions:
1. After execution of this Agreement, Lessee may request Lessor to complete
the registration of Lessee's leasehold right (cheonseikwon), and Lessor
shall respond in god faith without objection.
2. In the event that the mortgagee holding the the first priority
keun-mortgagee at present (which is Woori Bank) is changed to another bank
due to reasons of Lessee, Lessee shall immediately deliver to Lessor any
and all documents necessary to terminate Lessee's leasehold right
registration to enable the new bank to become the new first priority
keun-mortgagee, provided, however, that the keun-mortgage amount may not
exceed the currently established keun-mortgage amount and the certified
judicial scrivener of the both Parties shall perform the
necessary work concurrently. Lessor shall restore Lessee's leasehold right
to its original position as soon as the first priority keun-mortgage is
established for the new bank. Any and all expenses incurred in the process
shall be borne by Lessor.
September 16, 2006
Lessor: Fine Tower
Name: Representative Jin-Ho PARK (seal) (signature) (seal)
Business Registration No.: 220-02-72306
Address: 76-401 Hyundai Apt. 456 Apgujeong-dong Gangnam-gu, Seoul
Lessee: Interpark G-Market Inc.
Name: Representative Director Young-Bae KOO (seal)
Business Registration No.: 220-81-83676
Corporation Registration No.: 110111-1934151
Address: 6-8F LIG Tower 649-11 Yeoksam-dong Gangnam-gu, Seoul