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BUILDING LEASE AGREEMENT

Lease Agreement

BUILDING LEASE AGREEMENT | Document Parties: Hynix Semiconductor Inc | Hynix Semiconductor Ltd | MagnaChip Semiconductor, Inc | MagnaChip Semiconductor, Ltd You are currently viewing:
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Hynix Semiconductor Inc | Hynix Semiconductor Ltd | MagnaChip Semiconductor, Inc | MagnaChip Semiconductor, Ltd

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Title: BUILDING LEASE AGREEMENT
Date: 6/21/2005
Law Firm: Dechert    

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Exhibit 10.11

 

Execution Copy

 

BUILDING LEASE AGREEMENT

 

Between

 

MagnaChip Semiconductor, Inc.

 

(as Lessor)

 

and

 

Hynix Semiconductor Ltd.

 

(as Lessee)

 

with respect to

 

R Building, C1 Building and C2 Building located in Cheong-Ju

 

the Republic of Korea

 

October 6, 2004

 

 

 


TABLE OF CONTENTS

 

          Page

Article 1.

   Definitions    2

Article 2.

   Premises    12

Article 3.

   Term    15

Article 4.

   Rent; Taxes    15

Article 5.

   Maintenance; Lessor Maintenance Fee    18

Article 6.

   Payment of Rent and Lessor Maintenance Fee    21

Article 7.

   Representations, Warranties and Covenants    23

Article 8.

   Registration of the Lease Right    29

Article 9.

   Use, Improvements and Alterations    30

Article 10.

   Restricted Matters for Lessee    31

Article 11.

   Lessor Work    32

Article 12.

   Indemnification    33

Article 13.

   Termination; Reduction of Leased Premises    34

Article 14.

   Assignment    36

Article 15.

   Quiet Enjoyment    37

Article 16.

   Surrender    37

Article 17.

   Disputes and Governing Law    38

Article 18.

   Change of Applicable Laws    39

Article 19.

   Insurance    39

Article 20.

   Signage    40

Article 21.

   Property Damage and Condemnation    41

Article 22.

   Lessor Waiver    43

Article 23.

   Intentionally Deleted    43

Article 24.

   Force Majeure    43

Article 25.

   Coordinating Committee    44

Article 26.

   Confidentiality    45

Article 27.

   Miscellaneous    46

 


EXHIBIT A-1    LEASED PREMISES, COMMON AREAS AND RESTRICTED AREAS WITHIN LEASED BUILDINGS (R Building)
EXHIBIT A-2    LEASED PREMISES, COMMON AREAS AND RESTRICTED AREAS WITHIN LEASED BUILDINGS (C1 Mask Shop)
EXHIBIT A-3    LEASED PREMISES, COMMON AREAS AND RESTRICTED AREAS WITHIN LEASED BUILDINGS (C2 Mask Shop)
EXHIBIT A-4    LEASED PREMISES, COMMON AREAS AND RESTRICTED AREAS WITHIN LEASED BUILDINGS (Property Analysis Room)
EXHIBIT B-1    LEASED BUILDINGS AND LESSOR COMPLEX
EXHIBIT B-2    LESSEE COMPLEX
EXHIBIT B-3    LAND
EXHIBIT C    RENT CALCULATION FOR MONTHLY UNIT RENT
EXHIBIT D    LESSOR MAINTENANCE SERVICES
EXHIBIT E    RULES AND REGULATIONS

 

ii

 


BUILDING LEASE AGREEMENT

 

This BUILDING LEASE AGREEMENT (this “Agreement” or this “Lease”), dated as of October 6, 2004, is entered into by and between:

 

(1) MagnaChip Semiconductor, Ltd., a company organized and existing under the laws of Korea with its registered office at 1 Hyangjeong-dong, Heungduk-gu, Cheongju City, Chung Cheong Bok-do, Korea (“Lessor”); and

 

(2) Hynix Semiconductor Inc., a company organized and existing under the laws of the Republic of Korea (“Korea”) with its registered office at San-136-1, Ami-Ri, Bubal-Eub, Ichon-Si, Kyoungki-Do, Korea (“Lessee”) (each a “Party”, and collectively the “Parties”).

 

RECITALS

 

WHEREAS, the Parties have entered into a certain business transfer agreement dated June 12, 2004, as amended (the “BTA”) pursuant to which, among other things, Lessor has agreed to acquire the Acquired Assets (as defined in the BTA) from Lessee subject to the terms and conditions set forth in the BTA;

 

WHEREAS, the Parties desire to enter into an agreement as contemplated by the BTA whereby Lessor leases to Lessee all or certain parts of the Leased Buildings (as defined below), which are necessary for Lessee’s Business (as defined below) and for the operation of facilities necessary for its business, in accordance with this Agreement; and

 

WHEREAS, the execution and delivery of this Agreement is a condition to the Closing under the BTA.

 


NOW, THEREFORE, in consideration of the premises and the mutual covenants and agreements hereinafter set forth, and intending to be legally bound hereby, Lessor and Lessee agree as follows:

 

Article 1. Definitions

 

1.1. Unless otherwise defined herein or defined in the BTA, all capitalized terms shall have the meanings set forth below:

 

“Affiliate” shall have the meaning ascribed to such term in the BTA.

 

“Alterations” shall have the meaning ascribed to such term in Section 9.3.

 

“Alternate Space” shall have the meaning ascribed to such term in Section 7.2.

 

“Applicable Laws” shall mean all laws, constitutions, statutes, codes, ordinances, decrees, rules, regulations, municipal by-laws, judicial or arbitral or administrative or ministerial or departmental or regulatory judgments, orders, decisions, rulings or awards, consent orders and decrees, policies, guidelines or any interpretations of any of the foregoing, including general principles of civil law and equity, issued by any Governmental Entity having or exercising jurisdiction over or otherwise affecting any Party, the Business or the Leased Buildings.

 

“Book Value” shall mean Lessee’s book value for the particular asset as set forth in Lessee’s financial statements as of December 31, 2003 as amortized in accordance with Lessee’s accounting practices as of December 31, 2003 and adjusted from time to time (a) as a result of the installation of capital improvements or as a result of the incurrence

 

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of capital expenditures as determined in accordance with Korean generally accepted accounting principles or (b) as a result of revaluation as may be permitted by Applicable Laws.

 

“BTA” shall have the meaning ascribed to such term in the Recitals.

 

“Business” shall mean any business conducted by the Lessee as of the Closing Date as well as Permitted Uses.

 

“Calculation Date” shall have the meaning ascribed to such term in Section 4.1.

 

“CDC Machinery Room” shall mean that certain machinery room located in the R Building as more specifically outlined on Exhibit A-1.

 

“Closing” shall have the meaning ascribed to such term in the BTA.

 

“Closing Date” shall have the meaning ascribed to such term in the BTA.

 

“Common Areas” shall mean Common Areas of the Leased Buildings and Common Areas of the Lessor Complex, as appropriate for the context.

 

“Common Areas of the Leased Buildings” shall mean the areas of the Leased Buildings used in common by Lessor and Lessee on a shared basis, including the Special Common Areas and Specially Treated Common Areas, basement level 1 and 2 and first and second floor of R Building (including parking lot), roof area of R Building, corridors, hallways, stairways, entryways, lavatories, elevators, central mechanical rooms, elevator machine rooms, pump rooms, loading dock facilities, electrical and communication rooms, postal, security facilities, janitorial facilities, corridors, lobbies, reception areas, atriums, fire

 

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vestibules, elevator foyers, service elevator receiving areas, mailrooms, electric and communication closets, public areas as well as balconies, terraces and patios on floors where other Common Areas of the Leased Buildings exist.

 

“Common Areas of the Lessor Complex” shall have the meaning set forth in Section 2.2.

 

“Common Area Share” shall mean 551/1,000 for calculations made for any month following the Closing Date through and including March 2005, or thereafter, a fraction, the numerator of which is the number of Lessee employees at the Lessor Complex and Lessee Complex, and the denominator of which is such number of Lessee employees plus the number of Lessor employees at the Lessor Complex and Lessee Complex, in each case such number of employees shall be measured as of April 1 of the calendar year of calculation (or as of April 1 of the year prior to the calendar year of calculation in the case of calculations made for January, February or March); provided that if the number of employees fluctuates after any such measurement date such that the Common Area Share would have changed by at least 10% if such fluctuation were taken into account the Common Area Share shall be adjusted to reflect such fluctuation until the next measurement date or the next such fluctuation.

 

“Consents” shall mean any consents, approvals, waivers or authorizations to be obtained from, or notices to be given to, any persons or entities, and includes Governmental Authorizations.

 

“Coordinating Committee” shall have the meaning ascribed to such term in Section 25.1.

 

4

 


“Damages” shall mean any and all losses, settlements, expenses, liabilities, obligations, claims, damages (including any governmental penalty or costs of investigation, clean-up and remediation), deficiencies, royalties, interest, costs and expenses (including reasonable attorneys’ fees and all other expenses reasonably incurred in investigating, preparing or defending any litigation or proceeding, commenced or threatened incident to the successful enforcement of this Agreement), the extent of which are recoverable under Korean law, but shall specifically exclude Excluded Damages.

 

“Due Date” shall have the meaning ascribed to such term in Section 6.1.

 

“Event of Force Majeure” shall have the meaning ascribed to such term in Section 25.1.

 

“Excluded Damages” shall mean any punitive damages.

 

“Extension Term” shall have the meaning ascribed to such term in Section 3.1.

 

“General Service Supply Agreement” shall mean that certain General Service Supply Agreement between Lessor and Lessee, dated as of the same date hereof.

 

“Governmental Authorization” shall mean any approval, consent, license, permit, waiver or other authorization issued, granted, given or otherwise made available by or under the authority of any Governmental Entity or otherwise pursuant to any Applicable Law, and any registration with, or report or notice to, any Governmental entity pursuant to any Applicable Law.

 

“Governmental Entity” shall mean a court, arbitral tribunal, administrative agency or commission or other governmental or other regulatory authority or agency.

 

5

 


“Grace Period” shall have the meaning ascribed to such term in Section 16.1.

 

“Indemnified Person” of a Party shall mean the Party and its Subsidiary (as defined in the BTA), and any shareholder, partner, member, director, officer, employee, agent or representative of the Party or such Subsidiary.

 

“Initial Lease Term” shall have the meaning ascribed to such term in Section 3.1.

 

“Invoice” shall have the meaning ascribed to such term in Section 6.1.

 

“Joint Use Area” shall mean those portions of the Test Room and the CDC Machinery Room in the R Building which are demised to Lessee or retained by Lessor and to be used jointly, as more specifically depicted on Exhibit A-1.

 

“Land” shall mean certain portion of lots on which the Leased Buildings are located, as more specifically identified on Exhibit B-3.

 

“Leased Buildings” shall mean the R Building, C1 Building, and C2 Building, located in the Lessor Complex, as more specifically identified in Exhibit B-1.

 

“Leased Premises” shall mean (i) the portion of the Leased Buildings occupied exclusively by the Lessee, comprising approximately 8,874.52 square meters and more specifically outlined on Exhibit A-1 through A-3 and (ii) the portion of the Joint Use Area designated as Lessee’s Leased Premises.

 

“Lease Right” shall have the meaning contained in Section 2.2.

 

“Lease Term” shall have the meaning ascribed to such term in Section 3.1

 

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“Lease Year” shall mean the one year period beginning on the Closing Date and each anniversary thereafter.

 

“Lessee” shall have the meaning contained in the Preamble of this Agreement.

 

“Lessee Complex” shall mean the manufacture, testing, packaging, research and development and other facilities (including buildings) owned by Lessee, located at Cheong-Ju, Korea, and more specifically depicted on Exhibit B-2.

 

“Lessee Complex Lease Agreement” shall mean the Building Lease Agreement dated as of the same date hereof, entered into by and between Lessor and Lessee with respect to certain Buildings and Warehouses located in the Lessee Complex.

 

“Lessor” shall have the meaning contained in the Preamble of this Agreement.

 

“Lessor Complex” shall mean the manufacture, testing, packaging, research and development and other facilities (including buildings) owned by Lessor, located at Cheong-Ju, Korea, and more specifically depicted on Exhibit B-1.

 

“Lessor Maintenance Fee” shall have the meaning ascribed to such term in Section 5.2.

 

“Lessor Work” shall have the meaning contained in Article 11.

 

“Lien” shall mean any lien, charge, claim, agreement to sell, pledge, security interest, judgment, conditional sale agreement or other title retention agreement, finance lease, mortgage, deed of trust, security agreement, right of first refusal or offer (or other similar right), option, restriction, tenancy, license, covenant, encroachment (whether upon any real property or by any improvement situated on any real property onto any adjoining real property or onto any easement area), right of way, easement, title defect or other encumbrance or title matter, existing as of the Closing Date.

 

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“Mask Shops” shall mean the portions of the C-1 Building and C-2 Building areas designated as “Mask Shops” on the attached Exhibits A-2 and A-3, and demised to Lessee as part of its Leased Premises.

 

“Monthly Unit Rent” shall mean the amount of Rent with respect to each Leased Building in terms of rent per square meter for each month of the Lease Term.

 

“Other Building Rent” shall have the meaning ascribed to such term in Section 4.1.

 

“Other Costs” shall have the meaning ascribed to such term in Section 6.3.

 

“Other Occupants of the Leased Buildings” shall mean the third parties occupying portions of the Leased Buildings under lease or occupancy arrangements with Lessor.

 

“Permitted Uses” shall mean the use of the Leased Buildings to conduct the Business or any other semiconductor, information technology or other technology related business.

 

“Property Analysis Room” shall mean the portions of the C-2 Building designated as “Property Analysis Room” on the attached Exhibit A-4, and demised to Lessee as part of its Leased Premises.

 

“Property Damage” shall have the meaning ascribed to such term in Section 21.1.

 

“Proceeding” shall mean any action, arbitration, audit, hearing, investigation, litigation or suit (whether civil, criminal, administrative, or investigative) commenced, brought, conducted, or heard by or before, or otherwise involving, any Governmental Entity.

 

8

 


“R Building Rent” shall have the meaning ascribed to such term in Section 4.2.

 

“Refinancing” shall have the meaning ascribed to such term in Section 2.3.

 

“Rent” shall mean, collectively, the Other Building Rent and the R Building Rent.

 

“Rent Calculation for Monthly Unit Rent” shall have the meaning set forth in Exhibit C.

 

“Restricted Areas” shall have the meaning ascribed to such term in Section 7.5.

 

“Rules and Regulations” shall mean the reasonable rules and regulations, including those attached as Exhibit E to this Agreement, adopted by Lessor and applied generally to the Leased Premises, Common Areas of the Leased Buildings and Common Area of the Lessor Complex, if any, (a) which rules and regulations have been previously provided to Lessee, (b) shall be uniformly applied to all occupants of the Leased Premises, Common Areas of the Leased Buildings and Common Areas of the Lessor Complex, including Lessor, and (c) do not diminish the rights or increase the liabilities of the Lessee as otherwise provided under this Agreement.

 

“Second Priority” shall have the meaning ascribed to such term in Section 2.3.

 

“Special Common Area” shall mean those portions of the Common Areas of Lessor Complex limited to the exclusive use of Lessor or Lessee, as the case may be, more specifically depicted on Exhibit A-1.

 

“Specially Treated Common Areas” shall mean those portions of the Common Areas on the third through sixth floors of the R Building which are lavatories, elevators, A.H.U. room and stairways.

 

9

 


“Subsidiary” shall have the meaning ascribed to such term in the BTA.

 

“Substitute Premises” shall have the meaning ascribed to such term in Section 21.1.

 

“Successor” shall have the meaning ascribed to such term in Section 14.1.

 

“Taxes” shall mean any and all taxes, fees, levies, duties, tariffs, imposts, and other charges of any kind (together with any and all interest, penalties, additions to tax and additional amounts imposed with respect thereto) imposed by any Governmental Entity pursuant to any Applicable Law levied on the Leased Buildings. Taxes shall not include any taxes on income, rents, franchise, gift, gross receipts, or capital stock tax, or similar tax arising from the Lessor’s receipt of rent.

 

“Test Room” shall mean those certain test and measurement rooms located in the R Building as more specifically outlined on Exhibit A-1.

 

“VAT” shall mean the value added Tax required to be paid to the relevant Governmental Entity in respect of the lease of the Leased Buildings to Lessee.

 

1.2. Rules of Interpretation.

 

  (a) When a reference is made in this Agreement to a section or article, such reference shall be to a section or article of this Agreement unless otherwise clearly indicated to the contrary.

 

  (b) Whenever the words “include”, “includes” or “including” are used in this Agreement they shall be deemed to be followed by the words “without limitation.”

 

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  (c) The words “hereof”, “hereto”, “herein” and “herewith” and words of similar import shall, unless otherwise stated, be construed to refer to this Agreement as a whole and not to any particular provision of this Agreement, and article, section, paragraph and exhibit references are to the articles, sections, paragraphs and exhibits of this Agreement unless otherwise specified.

 

  (d) The meaning assigned to each term defined herein shall be equally applicable to both the singular and the plural forms of such term, and words denoting any gender shall include all genders. Where a word or phrase is defined herein, each of its other grammatical forms shall have a corresponding meaning.

 

  (e) A reference to any party to this Agreement or any other agreement or document shall include such party’s successors and permitted assigns.

 

  (f) A reference to any legislation or to any provision of any legislation shall include any amendment to, and any modification or re-enactment thereof, any legislative provision substituted therefor and all regulations and statutory instruments issued thereunder or pursuant thereto.

 

  (g) The Parties have participated jointly in the negotiation and drafting of this Agreement. In the event an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the Parties, and no presumption or burden of proof shall arise favoring or disfavoring any Party by virtue of the authorship of any provisions of this Agreement.

 

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  (h) Headings are for convenience only and do not affect the interpretation of the provisions of this Agreement.

 

  (i) Any Exhibits attached hereto are incorporated herein by reference and shall be considered as part of this Agreement.

 

Article 2. Premises

 

2.1. In consideration of the Rent hereby agreed to be paid to Lessor by Lessee and the agreements and covenants herein made by Lessee, during the Lease Term, Lessor hereby leases to Lessee the Leased Premises, and grants the right to use the Common Areas of the Leased Buildings, including the Special Common Areas for Lessee’s use and the right to use the Common Areas of the Lessor Complex, and the right to use the Joint Use Areas of the Leased Buildings upon the terms and conditions contained herein.

 

2.2. As consideration for the Rent hereby agreed to be paid to Lessor by Lessee, as an essential inducement to Lessee to enter into this Agreement, as one of the necessary rights for the use and benefit of this Agreement by Lessee, and as consideration for the agreements and covenants herein made by Lessee, Lessor hereby grants to Lessee with a right (i) to access and ingress to, and egress from, the Lessor Complex for the purpose of using the Leased Premises in accordance with this Agreement, (ii) to use the Common Areas of the Leased Building and (iii) to pass and repass to and from and through the Leased Buildings or any part thereof over and along roads, accessways, paths, hallways, corridors, highways and usable areas in, over, under and between the Leased Buildings, skybridges, including those connecting C2 Building and R Building and C2 Building and Assembly Building, walkways, arcades and all landscaped areas (including pools and

 

12

 


 

fountains) and other thoroughfares within the Lessor Complex owned by Lessor (together, the “Common Areas of the Lessor Complex”), provided that Lessee shall fully comply with all Applicable Laws and applicable Rules and Regulations. Lessor represents that all of such portions of the Lessor Complex are available for use by Lessee for the purpose of using the Leased Premises or operating the Business. Lessor acknowledges that any reduction in the rights granted to Lessee under this Section 2.2 would cause immediate and irreparable harm to Lessee and will entitle Lessee, in addition to any other remedies Lessee may have hereunder or otherwise under Applicable Laws (a) to stop any such reduction by injunction, whether such reduction arises from the acts of Lessor, or any other party claiming an interest in the Lessor Complex against Lessor and (b) to reduce the rights granted by Lessee to Lessor under Section 2.2 of the Lessee Complex Lease Agreement. The rights granted hereunder shall be integral to the grants of the rights under Section 2.1 and elsewhere in this Agreement, shall benefit Lessee and run with Lessee’s interest under this Agreement, and shall automatically pass to any successor and permitted assign of Lessee.

 

2.3. In addition, Lessor hereby grants to Lessee a right to register the lease and rights created under this Agreement (“ deunggi imchakwon ”) over the Leased Premises (the “Lease Right”) with the relevant real property registry offices for a term of the Lease Term. The Parties each upon the request of the other agree to submit a joint application to re-register the Lease Right to include any Extension Term. Lessor will take any action necessary to maintain or cause to be maintained the priority of the Lease Right (the “Second Priority”), subordinate only to the registered rights of Lessor’s mortgagees, and any re-financing or replacement of their mortgage loans (each, a “Financing”) secured against the Leased

 

13

 


 

Buildings during the Lease Term. Lessee acknowledges that the Financing may be refinanced or replaced from time to time and Lessee agrees to take any action reasonably requested by Lessor at Lessor’s sole cost in connection therewith including de-registration of the Lease Right so long as Lessor and any applicable mortgagee of Lessor takes any action necessary to maintain or cause to be maintained the Second Priority of the Lease Right, including re-registration thereof.

 

2.4. Lessee acknowledges and agrees that Lessee has the right to occupy and use the Leased Premises only for the purposes provided, and upon the terms and conditions set forth, in this Agreement.

 

2.5. With respect to the CDC Machinery Room each of Lessor and Lessee shall cooperate with the other Party and take or cause to be taken such action as may be reasonably requested by the other Party in order to, among other requirements, institute a security program to restrict access to the CDC Machinery Room solely to approved personnel. Notwithstanding anything to the contrary set forth herein, with respect to the CDC Machinery Room, Lessor retains space therein equivalent to 229.39 square meters, and Lessee is granted as part of the Leased Premises space therein equivalent to 289.60 square meters. The CDC Machinery Room may be used by both Lessor and Lessee as Joint Use Areas.

 

2.6. Each Party shall cooperate with the other Party and take or cause to be taken such actions as may be reasonably requested by the other Party in order to comply with the other Party’s reasonable security rules and regulations.

 

14

 


2.7. With respect to the Test Room in the R Building, each of Lessor and Lessee shall cooperate with the other Party and take or cause to be taken such action as may be reasonably requested by the other Party in order to, among other requirements, institute a security program to restrict access to the Test Room solely to approved personnel. Notwithstanding anything to the contrary set forth herein, with respect to the Test Room, Lessor shall retain 417.57 square meters to be used as Joint Use Area, and Lessee shall be granted as Leased Premises 512.43 square meters to be used as Joint Use Area.

 

Article 3. Term

 

3.1 The initial term of this Agreement (the “Initial Lease Term”) shall be for twenty (20) years from the Closing Date, which Initial Lease Term shall, subject to the termination provisions of Article 13, be automatically extended for successive ten (10)-year periods (each, an “Extension Term”; the Lease Term and all Extension Terms are collectively referred herein as the “Lease Term”) under the terms and conditions hereof, (i) unless otherwise agreed between the Parties and (ii) as long as the Leased Buildings remain on the Land and Lessee uses the Leased Premises for the purpose of operating the Business. In any event, Lessor and Lessee will undertake such action to extend the Lease Term in the event the automatic extension is not enforceable.

 

Article 4. Rent; Taxes

 

4.1. The monthly rent for all of the Leased Premises (other than the Leased Premises in the R Building), exclusive of VAT (the “Other Building Rent”), for the first four (4) years of the Initial Lease Term, shall be the sum for all of the Leased Premises of the calculation for

 

15

 


 

each Leased Building of the applicable Monthly Unit Rent as of December 31, 2003 derived in accordance with Exhibit C multiplied by the number of square meters in the Leased Premises of the applicable Leased Building. Commencing on the fourth (4 th ) anniversary of the Closing Date, or on the first day of the immediately succeeding calendar month if the Closing Date is not the first day of the calendar month, and every anniversary of such date (each, a “Calculation Date”), the Other Building Rent for each Leased Premises in each Leased Building (other than the Leased Premises in the R Building) will be recalculated annually based on the Rent Calculation for Monthly Unit Rent attached as Exhibit C, multiplied by the number of square meters in the Leased Premises of the applicable Leased Building.

 

4.2. The monthly rent due from Lessee for the Leased Premises and Common Areas in R Building, exclusive of VAT (the “R Building Rent”; the R Building Rent and the Other Building Rent are collectively referred to herein as the “Rent”), for the first four (4) years of the Initial Lease Term, shall be the Monthly Unit Rent as of December 31, 2003 derived in accordance with Exhibit C multiplied by the sum of (i) the number of square meters in the Leased Premises of the R Building, (ii) the number of square meters of the Common Areas of the R Building (other than the Specially Treated Common Areas of the R Building) multiplied by the Lessee’s Common Area Share, and (iii) for each of the third through sixth floors of the R Building, the number of square meters in the Specially Treated Common Areas of the relevant floor in the R Building multiplied by a fraction, the numerator of which is the number of square meters of Leased Premises for such floor and the denominator of which is the number of square meters of total floor area for such floor excluding the Specially Treated Common Areas and any area occupied by third

 

16

 


 

parties (other than the Leased Premises) on such floor. On each Calculation Date, the Rent for the Leased Premises of the R Building will be recalculated annually based on the Rent Calculation for Monthly Unit Rent attached as Exhibit C, multiplied by the sum of (i) the number of square meters in the Leased Premises of the R Building, (ii) the number of square meters of the Common Areas of the R Building (other than the Specially Treated Common Areas of the R Building) multiplied by the Lessee’s Common Area Share recalculated as of such Calculation Date, and (iii) for each of the third through sixth floors of the R Building, the number of square meters in the Specially Treated Common Areas of the relevant floor in the R Building multiplied by a fraction, the numerator of which is the number of square meters of the Leased Premises for such floor and the denominator of which is the number of square meters of total floor area for such floor excluding the Specially Treated Common Areas and any area occupied by third parties (other than the Leased Premises) on such floor.

 

4.3. Provided the square meters of the Leased Premises for the particular Leased Building are more than fifty percent (50%) of all of the square meters of the Leased Building, Lessee shall have the right to require Lessor to contest the amount or validity of any Taxes or other claim (collectively, “Claims”) relating to such Leased Building, if Lessee in good faith, reasonably believes they are incorrect, in which case Lessee may pay under protest while the Claim is contested, or delay payment thereof or compliance therewith to the extent they are being so contested, provided that (i) Lessee shall pay or perform the contest of such Claim, and the amount due for such Claims as finally determined; (ii) such contest shall not otherwise cause Lessor to be in default under any contracts or legally enforceable requirements of third parties including any Governmental Entity

 

17

 


which are binding upon Lessor; or cause any material part of the Leased Buildings or any Rent therefrom to be in any immediate danger of sale, forfeiture, attachment or loss; and (iii) Lessee shall indemnify, protect, defend and hold harmless Lessor from and against any Damage incurred by Lessor in connection therewith or as a result thereof.

 

Article 5. Maintenance; Lessor Maintenance Fee

 

5.1. Lessor shall be obligated to perform all maintenance and repairs, and to the extent not provided for in the General Service Supply Agreement, to supply all customary services with respect to the Leased Premises and Common Areas as more fully described on Exhibit D (“Lessor Maintenance Services”).

 

5.2. The amount of monthly maintenance fee for the Lessor Maintenance Services, exclusive of VAT (the “Lessor Maintenance Fee”) with respect to the Leased Premises in the R Building and Common Areas of the R Building shall be initially calculated for each of the first four (4) Lease Years as follows:

 

two percent (2%) of each Leased Building’s Book Value as of December 31, 2003;

divided by the number of square meters in the R Building;

divided by twelve (12).

 

Then such monthly per square meter Lessor Maintenance Fee shall be:

 

multiplied by each of (i) the number of square meters in the Leased Premises of the R Building, (ii) the number of square meters of the Common Areas of the R Building (other than the Specially Treated Common Areas of the R Building) multiplied by the Lessee’s

 

18

 


Common Area Share, and (iii) for each of the third through sixth floors of the R Building, the number of square meters in the Specially Treated Common Areas of the relevant floor in the R Building multiplied by a fraction, the numerator of which is the number of square meters of the Leased Premises for such floor and the denominator of which is the number of square meters of total floor area for such floor excluding the Specially Treated Common Areas and any area occupied by third parties (other than the Leased Premises) on such floor.

 

Thereafter, the Lessor Maintenance Fee with respect to the Leased Premises in the R Building and Common Areas of the R Building shall be recalculated annually to increase or decrease by the same percentage as the change in the consumer price index published by the Korean National Statistical Office o


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