Schedule 13D

-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, IMsnf7RS+wVHdDUfI2uCdZWlM2lZzmOMl0kE5e6yfbR8nXhh1VJPqPRf1KWvQTW9 K/F1J0WHB3C4rG1XDgJ76g== 0001193125-08-035804.txt : 20080222 0001193125-08-035804.hdr.sgml : 20080222 20080222073927 ACCESSION NUMBER: 0001193125-08-035804 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 6 FILED AS OF DATE: 20080222 DATE AS OF CHANGE: 20080222 GROUP MEMBERS: INTER OPERATIONS INC. GROUP MEMBERS: TAIZO SON SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: GRAVITY Co., Ltd. CENTRAL INDEX KEY: 0001313310 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-BUSINESS SERVICES, NEC [7389] IRS NUMBER: 000000000 STATE OF INCORPORATION: M5 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D SEC ACT: 1934 Act SEC FILE NUMBER: 005-80768 FILM NUMBER: 08634638 BUSINESS ADDRESS: STREET 1: NURITKUM SQUARE BUSINESS TOWER 15F STREET 2: 1605 SANGAM-DONG, MAPO-GU CITY: SEOUL STATE: M5 ZIP: 121-270 BUSINESS PHONE: 82-2-2132-7000 MAIL ADDRESS: STREET 1: NURITKUM SQUARE BUSINESS TOWER 15F STREET 2: 1605 SANGAM-DONG, MAPO-GU CITY: SEOUL STATE: M5 ZIP: 121-270 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: Heartis Inc. CENTRAL INDEX KEY: 0001427477 IRS NUMBER: 000000000 STATE OF INCORPORATION: M0 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: STREET 1: 2F STEP ROPPONGI,6-8-10,ROPPONGI STREET 2: MINATO-KU CITY: TOKYO STATE: M0 ZIP: 106-0032 BUSINESS PHONE: 81-3-6888-7038 MAIL ADDRESS: STREET 1: 18-6,SHINSENCHO STREET 2: SHIBUYA-KU CITY: TOKYO STATE: M0 ZIP: 150-0045 SC 13D 1 dsc13d.htm SCHEDULE 13D Schedule 13D

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 13D

(Rule 13d-101)

INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT

TO RULE 13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO

RULE 13d-2(a)

Gravity Co., Ltd.

(Name of Issuer)

Common Stock, Par Value Won 500 Per Share

(Title of Class of Securities)

38911N107

(CUSIP Number)

Keiko Nakajima

Heartis Inc.

Step Roppongi Building 2F

8-10 Roppongi 6-chome, Minato-ku,

Tokyo 106-0032, Japan

Telephone No.: 81-3-6888-7038

(Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications)

February 13, 2008

(Date of Event which Requires Filing of this Statement)

If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of §§ 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box. ¨

NOTE: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See §§ 240.13d-7 for other parties to whom copies are to be sent.

The remainder of this cover page shall be filled out for a reporting person’s initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.

The information required on the remainder of this cover page shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934 (“Act”) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).


CUSIP No. 38911N107		13D		Page 1


1	NAME OF REPORTING PERSONS. I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY). Heartis Inc.
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) x (b) ¨
3	SEC USE ONLY
4	SOURCE OF FUNDS OO, WC
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)	¨
6	CITIZENSHIP OR PLACE OF ORGANIZATION JAPAN


NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH		7 SOLE VOTING POWER 0
		8 SHARED VOTING POWER 3,640,619
		9 SOLE DISPOSITIVE POWER 0
		10 SHARED DISPOSITIVE POWER 3,640,619


11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 3,640,619
12	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES	¨
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 52.4%
14	TYPE OF REPORTING PERSON CO


CUSIP No. 38911N107		13D		Page 1


1	NAME OF REPORTING PERSONS. I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY). Inter Operations Inc.
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) x (b) ¨
3	SEC USE ONLY
4	SOURCE OF FUNDS OO, WC
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)	¨
6	CITIZENSHIP OR PLACE OF ORGANIZATION JAPAN


NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH		7 SOLE VOTING POWER 0
		8 SHARED VOTING POWER 3,640,619
		9 SOLE DISPOSITIVE POWER 0
		10 SHARED DISPOSITIVE POWER 3,640,619


11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 3,640,619
12	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES	¨
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 52.4%
14	TYPE OF REPORTING PERSON CO


CUSIP No. 38911N107		13D		Page 1


1	NAME OF REPORTING PERSONS. I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY). Taizo Son
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) x (b) ¨
3	SEC USE ONLY
4	SOURCE OF FUNDS OO, WC
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)	¨
6	CITIZENSHIP OR PLACE OF ORGANIZATION KOREA


NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH		7 SOLE VOTING POWER 0
		8 SHARED VOTING POWER 3,640,619
		9 SOLE DISPOSITIVE POWER 0
		10 SHARED DISPOSITIVE POWER 3,640,619


11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 3,640,619
12	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES	¨
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 52.4%
14	TYPE OF REPORTING PERSON IN

Item 1.

Security and Issuer.

The title of the class of equity securities to which this statement relates is the common stock (the “Common Stock”), par value Won 500 per share, of Gravity Co., Ltd., a corporation organized under the laws of the Korea (the “Company”). The principal executive offices of the Company are located at Noritkum Square Business Tower 15F, 1605, Sangam-Dong, Mapo-Gu, Seoul 121-836, Korea.

Item 2.

Identity and Background.

(a)-(c) and (f)

This statement is filed by Heartis Inc. (“Heartis”), a corporation organized under the laws of Japan, Inter Operations Inc. (“Inter Operations”), a corporation organized under the laws of Japan, and Taizo Son, a Korean citizen, who with Heartis and Inter Operations are collectively referred to as the “Reporting Persons”. Heartis has its principal executive office at Step Roppongi Building 2F, 8-10 Roppongi 6-chome, Minato-ku, Tokyo 106-0032, Japan. The principal business of Heartis is private investment.

Inter Operations has its principal executive office at 1 Kanda-Awajicho 1-chome, Chiyoda-ku, Tokyo 101-0063, Japan. The principal business of Inter Operations is asset management.

Taizo Son directly owns 100% of the issued share capital of Inter Operations. Inter Operations directly owns 100% of the issued share capital of Heartis. Taizo Son’s principal occupation is the Chairman of GungHo Online Entertainment Inc. (“GungHo”), a corporation organized under the laws of Japan, and his principal business address is GungHo Online Entertainment Inc., 2-2 Yurakucho 1-chome, Chiyoda-ku, Tokyo 100-0006, Japan.

The sole director and executive officer of both Heartis and Inter Operations is Taizo Son.

(d) and (e)

Neither Taizo Son, Heartis, Inter Operations nor, to the best of Heartis’s knowledge or Inter Operations’s knowledge, any of their directors or executive officers has, during the last five years, been (a) convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) or (b) a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws.

Item 3.

Source and Amount of Funds or Other Consideration.

On February 13, 2008, Heartis executed a stock purchase and sale agreement (the “Purchase Agreement”) with Son Asset Management, LLC (“SAM”), a limited liability company organized under the laws of Japan, pursuant to which SAM will sell 3,640,619 shares of Common Stock (the “Shares”) to Heartis. On February 29, 2008, Heartis will pay to SAM 4,036,298,947 Japanese Yen, an amount equal to the 3,640,619 shares multiplied by the United States NASDAQ National Market closing price of American Depositary Shares (“ADSs”) representing shares of the Common Stock on February 13, 2008 ($2.56), multiplied by four ADSs per share of Common Stock, and further multiplied by the Japanese Yen/U.S. Dollar telegraphic transfer middle rate on February 14, 2008, reported by Mizuho Corporate Bank, Ltd. (108.27 Japanese Yen per 1.00 U.S. Dollar), in exchange for delivery of the Shares. An English translation of the Purchase Agreement is attached hereto as Exhibit A and is hereby incorporated by reference herein.

The consummation of the Purchase Agreement is not subject to any conditions.

In order to finance the transaction contemplated by the Purchase Agreement, Heartis executed a loan agreement (the “Loan Agreement”) with SAM on February 22, 2008. Under the Loan Agreement, on February 29, 2008 SAM will loan to Heartis 4,030,000,000 Japanese Yen, the principal of which Heartis shall repay no later than February 28, 2010. Heartis shall pay to SAM interest at a rate of 14.5% per annum. As collateral for the loan, Heartis agreed in the Loan Agreement to pledge to SAM 24,308 shares of common stock of GungHo, which will be acquired by SAM through a third party allotment on April 1, 2008 under the Share Subscription Agreement (defined under Item 4). An English translation of the Loan Agreement is attached hereto as Exhibit B and is hereby incorporated by reference herein.

Heartis will provide the remainder of the consideration specified by the Purchase Agreement out of its working capital.

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Item 4.

Purpose of Transaction.

The information set forth under Item 3 above is incorporated herein by reference.

On February 14, 2008, Heartis executed a share subscription agreement (the “Share Subscription Agreement”) with GungHo pursuant to which, on April 1, 2008, Heartis will transfer the Shares to GungHo as a contribution in kind for 24,308 newly issued shares of common stock of GungHo. The number of shares to be issued by GungHo was determined based on an aggregate valuation of the Shares of 4,035,180,549 Japanese Yen. GungHo will obtain the legal title to the Shares when such contribution in kind is made. The consummation of the Share Subscription Agreement is not subject to any conditions. An English translation of the Share Subscription Agreement is attached hereto as Exhibit C and is hereby incorporated by reference herein.

Heartis is acquiring the Shares in order to facilitate the acquisition of the Shares by GungHo through a non-cash transaction. GungHo wishes to acquire the Shares in order to establish and maintain a strategic relationship with the Company to, among other things, explore the development and marketing of products and services through a synergy to be created by harnessing GungHo’s strengths in multi platform delivery with the Company’s game development process.

Except as set forth in this Item 4, the Reporting Persons do not have any plans or proposals which relate to or would result in the acquisition or disposition of Common Stock by it or any of the other events described in Items 4(a) through 4(j) of Schedule 13D.

Item 5.

Interest in Securities of the Issuer.

(a) Prior to February 13, 2008, the Reporting Persons were not beneficial owners of any shares of Common Stock. Upon execution of the Purchase Agreement, the Reporting Persons may be deemed to have beneficially acquired shared voting power of the 3,640,619 shares of Common Stock, constituting approximately 52.4% of the total issued and outstanding Common Stock (based on 6,948,900 shares of Common Stock, the number of shares of Common Stock outstanding as of the most recently available filing by the Company with the Securities and Exchange Commission on June 29, 2007). The Purchase Agreement will be consummated on February 29, 2008, and there are no conditions to be completed prior to that date.

Taizo Son owns 100% of the issued share capital of Inter Operations, which owns 100% of the issued share capital of Heartis, and Taizo Son is the sole director and executive officer of each of Heartis and Inter Operations. As a result, Inter Operations and Taizo Son share with Heartis beneficial ownership of the Shares held directly by Heartis.

(b) After the Purchase Agreement is consummated, Heartis, as the registered owner, Inter Operations through its ownership of Heartis, and Taizo Son through his ownership of Inter Operations, will have the power to vote or dispose or to direct the vote or disposition of the 3,640,619 shares of Common Stock beneficially owned by the Reporting Persons.

(c) Except for the transfer contemplated by the Purchase Agreement as described in Item 3, and the transfer contemplated by the Share Subscription Agreement as described in Item 4, neither Taizo Son, Heartis, Inter Operations nor, to Heartis’s knowledge, or Inter Operations’s knowledge, any of their directors or executive officers has effected any transaction in the Common Stock during the past sixty days.

(d) None.

(e) Not applicable.

- ii -

Item 6.

Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer.

The information set forth under Items 3, 4 and 5 above is incorporated herein by reference.

Item 7.

Material to be Filed as Exhibits.

Exhibit A – English translation of Stock Purchase and Sale Agreement, dated as of February 13, 2008, by and between Son Asset Management, LLC and Heartis Inc.

Exhibit B – English translation of Loan Agreement, dated as of February 22, 2008, by and between Heartis Inc. and Son Asset Management, LLC.

Exhibit C – English translation of Share Subscription Agreement, dated as of February 14, 2008, by and between Heartis Inc. and GungHo Online Entertainment, Inc.

Exhibit D – Joint Filing Agreement, dated February 22, 2008, by and among Heartis Inc., Inter Operations Inc. and Taizo Son.

- iii -

Signatures

After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

Dated: February 22, 2008


Heartis Inc.

By:		/s/ Taizo Son
Name:		Taizo Son
Title:		Chief Executive Officer

Inter Operations Inc.

By:		/s/ Taizo Son
Name:		Taizo Son
Title:		Director

/s/ Taizo Son
Taizo Son

EX-99.A 2 dex99a.htm STOCK PURCHASE AND SALE AGREEMENT Stock Purchase and Sale Agreement

Exhibit A

[Translation]

STOCK PURCHASE AND SALE AGREEMENT

Son Asset Management Godo Kaisha (“SAM”) and Heartis Inc. (“Heartis”) hereby enter into this Stock Purchase and Sale Agreement (the “Agreement”) as follows:

Article 1.

(Object of Transfer)

SAM shall transfer to Heartis Three Million Six-Hundred Forty-Thousand Six-Hundred and Nineteen (3,640,619) shares of common stock of Gravity Co., Ltd. (the “Shares”) held by SAM as of the date hereof, and Heartis shall acquire the Shares through purchase (the “Share Transfer”).

Article 2.

(Delivery of the Shares and Transfer Price)

On February 29, 2008, Heartis shall pay to SAM the Transfer Price (as defined in the proceeding paragraph) according to the method specified by SAM, and in exchange for payment of the Transfer Price, SAM shall deliver to Heartis on the same date, the share certificates (the “Share Certificate”) representing the Shares.

The purchase price for the Shares shall be 3,640,619 shares (the number of transferred shares) multiplied by the United States NASDAQ National Market closing price of Gravity Co., Ltd. on February 13, 2008 (United States Eastern Standard Time) (indicated as the price of one-forth (1/4) of one share; provided, however, that if the transaction is not concluded on that day, then such price shall be the first purchase price agreed upon thereafter), multiplied by four, and further multiplied by the yen/dollar middle rate (TTM) exchange rate on February 14, 2008 reported by Mizuho Corporate Bank, Ltd. (the “Share Transfer Price”).

Article 3.

(Representations and Warranties)

SAM hereby represents and warrants to Heartis as of the date hereof that the following are true and accurate:

SAM legally and validly holds title to the Shares, and is listed as a shareholder in the shareholder register of Gravity Co., Ltd. The Shares are free and clear of any lien, pledge, charge or any other restriction of any kind, and SAM has not entered into any agreement with a third party that would restrict this Share Transfer. The applicable laws and the articles of incorporation, bylaws and other internal regulations of Gravity Co., Ltd. do not contain any provisions that would restrict this Share Transfer, and, when the Shares have been registered in the name of Heartis, Heartis shall acquire, and shall be able to exercise on February 29, 2008, all its rights as shareholder without any encumbrances.

The Share Certificate has been legally and validly issued and constitutes a legal and valid representation of the Shares.

Gravity Co., Ltd. is a corporation ( ) legally organized and validly existing under the laws of Korea.

There are no judgments, rulings, orders or settlements (either court-based or out-of-court) that would give rise to the gain or loss of any shareholder rights with respect to the Shares, and there are no legal proceedings or other legal or administrative procedures pending or threatened with the courts or any administrative body with respect to the Shares.

There are no petitions by third parties pending or threatened for preservation measures, enforcement, auction or other proceedings, or any seizures for preservation or dispositions for failure to pay taxes or other duties.

Article 4.

(Termination and Indemnification)

Either SAM or Heartis may terminate this Agreement at any time without notice if the counterparty (the “Breaching Party”) breaches any provision of this Agreement, and the Breaching Party shall indemnify the counterparty for any and all damages, losses, expenses or burdens (regardless of whether or not they arose as a result of a third-party claim, and includes reasonable legal fees) suffered or incurred as a result.

Article 5.

(Confidentiality and Disclosure)

For a period of three (3) years after the execution of this Agreement, neither SAM nor Heartis shall disclose the content of this Agreement, details of its negotiation, and the status of performance, as well as information of the counterparty learned in relation to this Agreement (hereinafter referred to as “Confidential Information”) to a third party (except for necessary disclosure to the officers, employees, target company and to lawyers, certified public accountants, tax attorneys, financial advisors, and other specialized professionals, but the same duty of confidentiality stipulated in this Article shall be imposed on the disclosing party and same hereinafter as pertaining to this Article) without the prior written consent of the counterparty, and shall not use such information for a purpose other than to perform under the Agreement. The following items, however, shall not be considered as Confidential Information:

Information that was already public when disclosed by the counterparty or that became public after it was obtained by the counterparty through no fault of the counterparty.

Information already possessed by the acquirer when disclosed by the counterparty.

Information justly obtained separately by the acquirer without imposition of the duty of confidentiality.

Article 6.

(Assignment of contractual status, rights and obligations)

Neither SAM nor Heartis shall assign, transfer, attach, or dispose of in any other way, its contractual status, rights or obligations either directly or indirectly to a third-party, without the prior written consent of the counterparty.

Article 7.

(Expenses)

Unless otherwise agreed, each party to this Agreement shall bear its own expenses, taxes and public dues with regard to the execution and drafting of, and performance under, this Agreement.

Article 8.

(Exclusive Jurisdiction)

The Tokyo District Court shall be the court of exclusive jurisdiction of the first instance regarding any and all disputes under this Agreement.

Article 9.

(Good faith discussions)

Any matters not set forth in this Agreement shall be decided by mutual good faith discussions between SAM and Heartis in accordance with the spirit of this Agreement.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be signed and sealed in duplicate and each party shall retain one copy.

February 13, 2008


Son Asset Management Godo Kaisha:				Masayoshi Son
				Representative Partner
				18F Shiodome Sumitomo Bldg.
				1-9-2 Higashi Shinbashi
				Minato-ku, Tokyo
				(Seal)

Heartis Inc.:				Taizo Son
				Representative Director
				8-16 Shinsencho
				Shibuya-ku, Tokyo
				(Seal)

EX-99.B 3 dex99b.htm LOAN AGREEMENT Loan Agreement

Exhibit B

[Translation]

Loan Agreement

Son Asset Management Godo Kaisha (“SAM”) and Heartis Inc. (“Heartis”) make and enter into this loan agreement (this “Agreement”) as of February 22, 2008 as follows.

ARTICLE 1 AMOUNT

SAM shall loan to Heartis, and Heartis shall borrow from SAM, four billion thirty million yen (¥4,030,000,000) (the “Loan”) as of February 29, 2008.

ARTICLE 2 DUE DATE

Heartis shall repay the principal of the Loan to SAM no later than February 28, 2010.

ARTICLE 3 INTEREST

The principal of the Loan shall accrue interest at a rate of 14.5% per annum (simple interest).

ARTICLE 4 INTEREST PAYMENT DATE

4.1 Heartis shall pay the interest set forth in Article 3 to SAM no later than February 28 of each year after the execution of this Agreement.

4.2 Interest that has become payable as set forth in Article 4.1 but has not been paid shall be included in the principal of the Loan.

ARTICLE 5 PREPAYMENT

5.1 Notwithstanding Article 4, Heartis may prepay all or part of the principal of the Loan at any time before the due date set forth in Article 2.

5.2 Upon prepayment as set forth in Article 5.1, Heartis shall, simultaneously with such prepayment, pay the interest accrued on all or part of the principal of the Loan to be prepaid (calculated on a per diem basis of a 365-day year) by the prepayment date.

ARTICLE 6 ACCELERATION

If any of the following events occur, Heartis’s obligations under this Agreement shall automatically become due and payable without SAM giving notice or notification to Heartis, and Heartis shall immediately repay all of the Loan borrowed by Heartis.

(1) If any note or check issued by Heartis has been dishonored;

(2) If a petition for commencement of bankruptcy procedures, civil rehabilitation (minji-saisei) procedures, corporate reorganization (kaisha-kosei) procedures or special liquidation is filed by Heartis or against Heartis by a third party;

(3) If Heartis sustains an attachment or provisional attachment; or

(4) If Heartis breaches the provisions of this Agreement.

ARTICLE 7 DELINQUENCY CHARGES

If the repayment becomes due as set forth in Article 2 and Heartis’s obligations become due and payable, SAM may request Heartis to pay delinquency charges at a rate of 14.5% per annum on the outstanding principal of the Loan until fully repaid.

ARTICLE 8 CUSTODY

Heartis hereby commits to create a pledge or security right for the benefit of SAM on 24,308 shares of common stock of GungHo Online Entertainment, Inc. (“GungHo”) which Heartis expects to acquire through allocation of new shares to a third party in accordance with the Share Subscription Agreement executed between Heartis and GungHo on February 14, 2008 to secure all loans that Heartis owes to SAM under this Agreement, immediately after the issuance of the new shares.

ARTICLE 9 CONSULTATION

Any matters not provided for in this Agreement shall be resolved in the spirit of this Agreement upon consultation between the parties.

ARTICLE 10 GOVERNING LAW AND JURISDICTION

10.1 This Agreement shall be governed by and construed in accordance with the laws of Japan.

10.2 The parties agree that the Tokyo District Court shall have exclusive jurisdiction as the court of first instance with regards to all disputes concerning this Agreement.

IN WITNESS WHEREOF, SAM and Heartis have caused this Agreement to be signed and sealed in duplicate and each party shall retain one copy.

February 22, 2008


SAM:		Masayoshi Son [Seal]
		Representative Partner
		Son Asset Management Godo Kaisha
		18th Floor, Shiodome Sumitomo Building
		1-9-2, Higashi-shinbashi
		Minato-ku, Tokyo

Heartis:		Taizo Son [Seal]
		Chief Executive Officer
		Heartis Inc.
		8-16, Shinsen-cho
		Shibuya-ku, Tokyo

EX-99.C 4 dex99c.htm SHARE SUBSCRIPTION AGREEMENT Share Subscription Agreement

Exhibit C

[Translation]

Share Subscription Agreement

GungHo Online Entertainment, Inc. (“GOE”) enters into this agreement (this “Agreement”) as follows with Heartis Inc. (“Heartis”) regarding subscription of 24,308 shares of common stock outlined in Schedule 1 to be newly issued based on the resolution at the board of directors held on February 14, 2008 by way of third party allotment.

Article 1

Issuance of New Shares

GOE shall newly issue 24,308 shares of common stock (the “Newly Issued Shares”) by way of third party allotment as outlined in Schedule 1 in accordance with the provisions of this Agreement, and Heartis shall subscribe all Newly Issued Shares.

Article 2

Contribution on Contribution Date

Heartis shall obtain the property specified in “4.” in Schedule 1 by April 1, 2008 (the “Contribution Date”) and shall contribute it to GOE on Contribution date.

Article 3

Indemnification

Heartis shall indemnify GOE at GOE’s request for any damage, losses or expenses incurred by GOE as a result of or in connection with breach of Heartis’s obligation of the preceding article.

Article 4

Governing Law and Language

1.	This Agreement shall be governed under, and construed in accordance with, the laws of Japan.

2.	This Agreement has been prepared in the Japanese language.

Article 5

Jurisdiction

The parties to this Agreement agree that the Tokyo District Court has the exclusive jurisdiction as the court of first instance with regards to any dispute concerning this Agreement.

- 1 -

Article 6

Good Faith Consultation

Each party to this Agreement agrees to consult in good faith to resolve any matter not set out in this Agreement in accordance with the objective of this Agreement.

[Remainder of page intentionally blank.]

- 2 -

This Agreement is prepared in duplicate, and GOE and Heartis shall each retain one original copy.

February 14, 2008


GOE:		1-2-2 Yurakucho,Chiyoda-ku, Tokyo
		GungHo Online Entertainment,Inc.
		President & CEO Kazuki Morishita [Seal]

Heartis:		8-16 Shinsencho, Shibuya-ku, Tokyo
		Heartis Inc.
		CEO Taizo Son [Seal]

- 3 -

Schedule 1

Outline of Newly Issued Shares


1. Number of Newly Issued Shares		24,308 shares of common stock

2. Allocation method		Third party allotment to Heartis

3. Calculation method of price		Price shall be determined as a quotient of maximum amount of capital increase based on a calculation in compliance to Ordinance of Company Act, Article 37 (1) divided by 24,308.

4. The contributed property is 3,640,619 shares of common stock (value: 4,035,180,549 yen in total) of Gravity Co., Ltd. (address of the main office: Nuritkum Square Business Tower 15F, 1605, Sangam-Dong, Mapo-Gu, Seoul, Korea).

5. Amount of capital and capital reserve to be increased		Amount of capital to be increased shall be a roundup amount of half of maximum of capital increase based on a calculation in compliance to Ordinance of Company Act, Article 37 (1). Amount of capital reserve to be increased shall be a rounddown amount of half of maximum of capital increase based on a calculation in compliance to Ordinance of Company Act, Article 37 (1).

6. Contribution Date of the property as stated in 4 above		April 1, 2008 (Tue)

7. Each item above is conditional on the effectiveness of a registration statement with respect to the Newly Issued Shares in accordance with Financial Instruments and Exchange Law.

- 4 -

EX-99.D 5 dex99d.htm JOINT FILING AGREEMENT Joint Filing Agreement

Exhibit D

Joint Filing Agreement

In accordance with Rule 13d-1(k) under the Securities Exchange Act of 1934, as amended, the undersigned hereby agree to the following:

(i)

the joint filing on behalf of each of them of a statement on Schedule 13D (including subsequent amendments thereto) with respect to the Common Stock, par value Won 500 per share, of Gravity Co., Ltd., a corporation organized under the laws of Korea, and

(ii)

the inclusion of this Joint Filing Agreement as an exhibit to such joint filing, provided that, as contemplated by Section 13d-1(k)(1)(ii), no person shall be responsible for the completeness and accuracy of the information concerning the other persons making the filing unless such person knows or has reason to believe that such information is inaccurate.

This Joint Filing Agreement may be executed in any number of counterparts all of which together shall constitute one and the same instrument.

IN WITNESS WHEREOF, the undersigned hereby execute this Agreement as of this 22nd day of February, 2008.


Heartis Inc.

By:		/s/ Taizo Son
Name:		Taizo Son
Title:		Chief Executive Officer

Inter Operations Inc.

By:		/s/ Taizo Son
Name:		Taizo Son
Title:		Director

/s/ Taizo Son
Taizo Son

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