EXHIBIT 10.1
(Agreement Number: 00460403)
JINSA WEIKOOKIN TOOJA GIUP JUNYONG XXXXX XXXXX
RESIDENT AGREEMENT (LEASE)
KOREA INDUSTRIAL COMPLEX CORPORATION
Agreement Number: 00460403
JINSA FOREIGN INVESTMENT COMPANY EXCLUSIVE INDUSTRIAL DISTRICT RESIDENT (LEASE)
AGREEMENT
Description of the Real Estate
Location: Wei 1 Pil-ji, 601 Bunji, Bangji-ri, Sanam-myun, Sacheon City, Xxxxx
Xxx
Size of Land: 27,270.9 m2
Use Purpose Zoning: Industrial Use District
In regards to the real estate described above, the Chairman of Korea Industrial
Complex Corporation (hereinafter, referred to as "Party A") and SpatiaLight
Korea, Incorporated (as further described below) (hereinafter, referred to as
"Party B"), which is to lease as a lessee the aforementioned real estate
mutually set forth in this lease agreement as follows:
Further description of Party B:
------------------------ ----------------------- --------------------------- ---------------------------
Trade Name (Name of SpatiaLight Korea, Company Representative Xxxxxx X. Xxxxx
the Corporation) Inc.
------------------------ ----------------------- --------------------------- ---------------------------
Address 161-6 Jungui-ri, Sacheon-up, Sacheon City, Xxxxx Xxx
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Class of Business Manufacturing of air Classification 32300 Manufactured LCos
transmitting number product chip
reception products,
other multimedia
products, and sound
and related machines
and products
------------------------ ----------------------- ----------------- --------- ------------------ --------
Size of Construction Manufacturing Plants and Facilities: 5.544.58 m2 Auxiliary Facilities:
2,123.32m2 Total: 7,667.9 m2
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Estimated start of September 2004 Estimated date of April 2005
construction completion
------------------------ ----------------------- --------------------------- ---------------------------
Amount of foreign 10,560 million won (equivalent to USD 9.6 million dollars)
investment
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Article 1. Term of Lease
The term of the lease is the fifty years from September 9, 2004 to September 8,
2054 (with re-leases in 10-year units).
Article 2. Size of Leased Land and Lease Fee
(1) The size of the land being leased is 27,270.9 m2.
(2) The fee of the lease shall be 86 won per month until November 2004, and
the fee thereafter shall be the amount set by the Minister of Commerce,
Industry and Energy.
(3) If it is applicable for a lease abatement according to Section 13 of the
Laws and Regulations for Foreign Investment Incentive or "Basic Plans for
Exclusively Foreign Company Industry District Management", the lease price
may be abated by Party B's request to Party A. After the decision for
lease abatement is made according to Paragraph 3 above, Party A may cancel
the abatement and retroactively assess and collect the abated amount in
the event that Party B loses the status for such abatement or does not
perform the conditions for such abatement.
Article 3. Payment of Lease Certification and Lease Fee
(1) At the time this agreement is mutually agreed upon, Party B shall pay a
lease certification in the amount equivalent to one (1) year of lease
payments based upon the monthly lease payments and pay the lease payment
for that year. In determining the number of months for such computation,
any fraction less than one month shall be considered one month.
(2) The lease payment shall be prepaid for one year, the deadline for such
payment shall be the last day of the previous year, and the payment shall
be paid and deposited into the financial institution designated by Party
A. In the event that the lease payment needs to be paid in installments
due to uncontrollable circumstances, it may be paid in four (4) or fewer
installments. In such case, there shall be an additional payment as
interest at the annual rate of eight (8) percent on the unpaid balance.
(3) For any late lease payment as allowed according to the provision of
Paragraph 2 above, there shall be additional late fees at the rate
equivalent to that set in the Rules and Regulations in "Additional Taxes
and Other Taxes According to National Tax Levi and Collection".
(4) If Party B should be repeatedly late in lease payment resulting in
additional late fees, the rules and regulations of "Provisions for Late
Fees" from "Laws for National Tax Levi and Collection" may be applied for
such collection.
Article 4. Ascertainment of the Size of Leased Land and Settlement of Lease
Price
(1) If as a result of a land survey there is an increase or decrease in the
size of the land leased to Party B, that shall be effected and the
adjusted size for the land shall be called the ascertained size of the
land.
(2) Based upon the ascertained size of the land, the lease fee and lease
certification shall be revised retroactively effective as of the date of
this agreement without any imposition of interest to either parties.
Article 5. Lessee's Obligations and Limitations in Claims
Party B shall perform the prudent administration of the property in good
faith, fulfill all obligations, bear its share of all necessary
obligations for preservation of the leased land and for the purposes of
usage and its enduring economic gains, and shall not claim any expense
reimbursement claims or other claims that might be discussed in the laws
and regulations of Civil Law Section 203 and/or 626.
Article 6. Limitations in the Usage of the Leased Land
Party B shall not undertake without prior acceptance by Party A if any of the
following items should apply:
1. Changes in purpose of usage and/or purpose of economic gain.
2. Transfer or sublease of the leased land or disposition of any right or
privilege.
3. Change or alteration of the original state of the leased land
4. Conveyance to third party in any form of the facilities built upon the
leased land.
Article 7. Cancellation of Lease
(1) Party A is entitled to cancel the lease agreement if Party B is in involved
in any of the following items:
1. If Party B is involved in any of the acts stated in Article 6 without
prior written acceptance from Party A.
2. According to the provisions from Article 42 of Laws Pertaining to Industry
Self Revitalization and Incorporation of Such Industrial Company, there
arises a reason to cancel the lease agreement.
3. Party B does not pay the lease fee for three months or longer.
4. Party B does not perform its proposed foreign investment (within three
years) according to the proposed business plan for company building and
establishment as submitted in the lease agreement application.
5. There is an ownership change in the portion of foreign investment to less
than 30 percent (30%) after the lease agreement that is legally binding.
6. There is a breach of any condition of the lease agreement or of any clause
of the lease agreement.
(2) In the event that Party A terminates the lease for provisions discussed in
Paragraph 1 above, Party B shall not be entitled to any claims whatsoever
for loss due to the cancellation of lease regardless of any loss sustained
by Party B.
(3) In the event that Party B cancels the lease according to the provisions
discussed in Paragraph 1 above, a refund shall be made for the lease
certification and the prepaid lease fee after a reduction is made for
unpaid lease payments, late fees and expenses for reverting the property
to the original state. In the event that there are excess expenses,
actions against Party B's assets may be taken such as lien or other venue.
Article 8. Request for Termination of Agreement
If Party B desires to terminate this agreement during the term of this
agreement for reasons beyond Party B's control, an application for
termination shall be submitted, and Party A shall terminate the lease
agreement within one month.
Article 9. Start of Construction of Plants, etc.
(1) In building plants and other facilities for production and manufacturing,
Party B shall meet the requirements in Section 8 of the "Laws Pertaining
to Industry Self Revitalization and Establishment of Such Industrial
Company" regarding the standards of building plants as well as Section 33
regarding meeting the requirements for buildings within structural and
zoning restrictions.
(2) In constructing buildings according to the provisions discussed in
Paragraph 1 above, Party B shall make a request for approval to Party A
and Party A shall make approval after taking the necessary procedures for
restoration to the original state, and issuing a letter of approval.
Article 10. Restoration to Original State
When the term of lease expires, is cancelled or terminated, Party B shall
donate the building and plant(s) and other facilities constructed upon the
land to the national government or a self-governing local government or
district within the time frame that Party A designates, and shall restore
the property to its original state as well as bear all the expenses for
restoration and return it to Party A at Party A's presence.
Article 11. Extension of Term of Lease
In the event Party B desires to extend the term of lease as discussed in
Article 1, such extension shall be requested three months before the term
expires. Party A shall examine Party B for the performance according to
Party B's Proposed Business Plan and shall give extension unless there is
a special reason not to.
Article 12. Responsibility for Compensation
In the event that Party B causes any loss due to omission or violation of
stated obligations so that Party A incurs expenses or losses, Party B shall
take the responsibility therefor and reimburse or restore to Party A such
expenses and losses.
Article 13. Modifications to Matters in Residential Agreement
(1) When Party B wants to change any part of the lease agreement, it shall be
made in compliance with Section 35 of Laws Pertaining to Industry Self
Revitalization and Establishment of Such Industrial Company. Proof of such
compliance shall be attached to an Application for Change in Lease
Agreement in order to make such changes with Party A.
(2) Party B shall bear any and all expenses and losses associated with Party
B's non-compliance for items discussed in Paragraph 1 above.
Article 14. Fees and Expenses for Common Areas
(1) Party B shall share Party B's portion of the burden that is determined
exclusively by Party A for the use of common facilities for its fees and
expenses for the preservation, repair and maintenance.
(2) In the event that Party B does not pay the fees and expenses as discussed
in Paragraph 1 above within the time determined by Party A, there shall be
charged an additional late charge on the amount equal to the late fee rate
Housing & Commercial Bank charges for regular loans.
Article 15. Restrictions on Common Area Usage
(1) In the event Party B does not pay the fees and expenses for common area
for three months, Party A has the right to exercise restrictions for Party
B not to use the common area. Moreover, Party A may execute procedures for
a lien on Party B's assets to secure and correct such condition.
(2) Party B shall not make any adverse reaction to Party A's actions taken as
discussed in Paragraph 1 above.
Article 16. Environment Preservation and Security Management
(1) According to the Laws pertaining to Environment Protection and Related
Laws, Party B shall construct systems for discharge, permit or license for
such discharge system construction shall be obtained. After such
installation and final approval, a copy of such approval shall be
submitted to Party A. The same procedures shall be applied to any changes
thereto.
(2) Any discharge to be made, whether general or specified, during Party B's
construction of plants and facilities and during their operation after
completion shall be treated and handled by an independent discharge
specialist in compliance with the rules and procedures therefor.
(3) In order to help promote environmental protection, Party B shall help
participate in projects that Party A endeavors for the
Common-Pollution-Protection of the Industrial District. (4) Party B shall
comply with Party A's direction and guidance for the protection and
security of the Industrial District according to the Laws for Establishing
and Keeping a Reserve Army, the Basic Laws for Civil Defense Army, and
laws and related regulations for protection of important national building
and resources from the Ministry of Commerce, Industry and Energy.
Article 17. Taxes and Other Public Charges
After the lease agreement, all taxes and public levies assessed on the
leased property shall be borne by Party B even if the assessment is not
made to Party B.
Article 18. Relation to Other Regulations
For items that are not stated in this agreement, the rules and regulations
set forth in the Laws Pertaining to Industry Self Revitalization and
Establishment of such Industry Company, the Guidelines for Exclusively
Foreign Entity Use District, and the Basic Plan for Industrial District
Management as well as the rules and regulations Party A establishes for
lease agreements shall be applied.
Article 19. Reports
Party B shall report to Party A as designated by Party A when any of the
following is applicable:
1. Concerning registration (and any subsequent changes) as a foreign
investment company according to the Laws for Promotion of Foreign
Investment,
2. Concerning the start of construction of plant buildings, additions,
completion of construction and start of plant operations,
3. Concerning production and manufacturing, export, employment and plant
operations, 4. Concerning temporary shutdown and closing of business
operations, and/or 5. Concerning anything that Party A decides to be
deemed necessary.
Article 20. Other Matters
(1) Party B shall perform geological and related inspection and testing, etc.,
that are deemed necessary for this leased land and its construction at its
own schedule and expenses.
(2) Party B shall build a system for pollution protection to protect and
preserve the surrounding environment and to protect against water
contamination. Therefore, a self-purifying system shall be installed if
plant operation begins before a main facility for sewer control is
completed and operational.
(3) During construction of building and plants, Party B shall protect against
damage to roads, parks, water lines and sewer systems and other public
facilities. In the event that Party B causes any damages, it shall restore
same to its original state at Party B's own responsibility.
(4) Party B shall not take away employees from companies and their supporting
entities within this Industrial District in the same or similar line of
business who are considered technical employees or highly skilled
employees.
Article 21. Matters of Special Agreements and Additional Agreements
In the case that Party A determines that an additional agreement is
needed for Party B's performance and compliance of this agreement beyond
and above this agreement, a separate agreement shall be made to Party B
as addition to this agreement.
To certify that this agreement is mutually agreed upon, two sets of this
agreement shall be made and sealed and signed and Party A and Party B, each of
which shall receive and keep one copy thereof.
September 9, 2004
Party A
Address: 000 Xxxx-xxxx, Xxxx-xx, Xxxxx, Xxxxxxxx of Korea
Name: Korea Industrial Complex Corporation
C.E.O.: Dong Xxx Xxx
Party B
Address: 161-6 Jungui-ri, Sacheon-up, Sacheon City, Xxxxx Xxx
Business Name (Corporate Name): SpatiaLight Korea, Inc.
C.E.O.: Xxxxxx X. Xxxxx
