Know-How and Basic Engineering Agreement

KNOW-HOW AND BASIC ENGINEERING AGREEMENT

This agreement made the ____ day of ____ ,19____ by and between (당사자명), a company duly organized and existing under the laws of Republic of (해당국가명), having its registered office at (당사자주소) (hereinafter referred to as “OWNER”) of the one part, and KoBiZone, a company duly organized and existing under the laws of Republic of Korea, having its registered office at 702-16, Yeoksam-dong, Kangnam-ku, Seoul, Korea(hereinafter referred to as “ COLLABORATOR”) of the other part.

WITNESSETH

WHEREAS, OWNER wishes to expand the facilities to manufacture (품목명) from the present capacity of (수량) to (수량) in (해당국가명) (such facilities beling hereinafter referred to as “PLANT”), and

WHEREAS, COLLABORATOR owns and maintains the rights and license in using the PROCESS and KNOW-HOW relating to the manufacture of the PRODUCT and to the PLANT.

WHEREAS, OWNER wishes to obtain license from COLLABORATOR and COLLABORATOR is willing to grant license to OWNER in using such PROCESS and KNOW-HOW and to provide OWNER with BASIC DESIGN, the training of OWNER’S engineers in connection with PLANT on the terms and conditions set out in this agreement.

NOW, THEREFORE, in consideration of the rights and obligations herein set forth, the parties hereto agree as follows.

ARTICLE 1 DEFINITION

In the agreement, as hereinafter defined, the following terms shall have the meanings hereby assigned to them, for all purpose of this agreement :

1.1 “PROCESS” means the manufacturing process of PRODUCT starting from receiving purified terephthalic acid (PTA) and ethylene glycol(EG), or dimethy 1 terephthalate (DMT and ethylene glycol(EG) as specified in “Design Basis” in ANNEX II, including the equipment as described in “Process Description” of ANNEX I and as listed in “Equipment list” of ANNEX X attached hereto.

1.2 PROCUCT means the polyester chips and filaments as specified in “product specific action” in ANNEX II attached hereto.

1.3 PLANT means the commercial unit and is to be built in (해당국가명) for the production and manufacture of PRODUCT by use of PROCESS and KNOW-HOW, and such plant shall have the designed capacity specified in “Design Capacity” in ANNEX II utilizing some equipment to be supplied by COLLABORATOR in accordance with the Equipment Supply Agreement.

1.4 KNOW-HOW and BASIC DESIGN PACKAGE shall mean such technical information, specifications, data and designs, documents, including documents required for the battery limit of PLANT as provided by COLLABORATOR for the manufacture of PRODUCT based on PROCESS in COLLABORATOR’S commercial use as of EFFECTIVE DATE of this Agreement and which are sufficient enough to enable a competent engineering organization in design of polyester chip and filament making plant to design, erect, set up and further to enable OWNER to operate and maintain PLANT. It’s scope is specified in “Scope of Technical Documents” in ANNEX III of this Agreement.

1.5 EFFECTIVE DATE shall be the date as defined in Article 9 of this Agreement.

1.6 COLLABORATOR shall mean Samsung Co., Ltd. as the payee of total contractual price of this Agreement.

1.7 ANNEXES means all annexes attached hereto which form integral parts of this Agreement.

ARTICLE 2 GRANT OF TECHNICAL KNOW-HOW AND SUPPLY OF

TECHNICAL ASSISTANCE

2.1 License to use PROCESS and KNOW-HOW

COLLABORATOR shall agree to grant to OWNER a non-exclusive license in using KNOW-HOW concerning PROCESS to manufacture PRODUCT in PLANT in India within the design capacity specified in ANNEX II of this Agreement and non-exclusive license to market PRODUCT anywhere in the world except Korea and Japan. However, OWNER is free to export and market any type of finished goods made from PRODUCT anywhere in the world. It is understood that OWNER shall not manufacture PRODUCT except in PLANT in (해당국가명).

2.2 Improvements, Sub-License and Extension

(a) COLLABORATOR and OWNER shall inform each other, free of charge for a period of eight (8) years from EFFECTIVE DATE or five (5) years from the commencement of commercial production, whichever is later, of the general nature of all improvements which they may make in respect of PROCESS and PRODUCT. Both parties hereto exchange a list of improvements, if any, which they have made during the above-mentioned period and allow their two engineers to visit the plants and the R & D facilities once a year for 15 days, should it become necessary during the above period.

The above obligation does not extend to the know-how and improvement in respect of products or processes which are not the subject of this Agreement. In case either party wishes to obtain any specific improvements made by the other party, the other party will give all necessary information sufficient for evaluation of the said specific improvements.

(b) OWNER may be entitled to sub-license the technical know-how and basic design under this Agreement to another Indian party with prior written consent by COLLABORATOR. The consent, however, shall not be withheld without reasonable causes.

The terms of such sub-licensing shall be as mutually agreed to by all the parties concerned including COLLABORATOR and will be subject to the approval of the government of (해당국가명) .

(c) COLLABORATOR shall agree not to impose any restrictions on OWNER for the expansion of the capacity of the PLANT, on using all designs, drawings, plans, specifications, process and technical data by means of which KNOW-HOW and DESIGN is provided by COLLABORATOR under this Agreement for the PLANT and further no payment is to be made by OWNER to COLLABORATOR for such use. However, if OWNER wants technical assistance from COLLABORATOR for such expansion of the PLANT, a separate payment shall be negotiated.

2.3 Supply of Technical KNOW-HOW and BASIC DESIGN PACKAGE

(a) COLLABORATOR shall provide OWNER with the technical data and information in the form of technical Documents specified in “Scope of Technical Documents” in ANNEX III which are sufficient to enable a competent engineering organization to perform detailed engineering for the battery limit of PLANT, to install the equipment therein and OWNER to operate PLANT for the production and manufacture of PRODUCT as per this Agreement under the supervision of engineers to be recommended by the COLLABORATOR.

(b) All the technical documents provided by COLLABORATOR under this Article 2 shall be made in English language using metric system and shall be in accordance with JIS, ASME, TEMA or other relevant codes and standards or the laws and regulations of (해당국가명).

(c) It is understood and agreed that the technical documents shall be delivered to OWNER in eight (8) blueprinted copies and two (2) reproducible copies in accordance with the schedule. The technical documents shall be delivered, with freight prepaid, to the representative or OWNER outside (해당국가명) .

The title to and risk of the technical documents shall be transferred to OWNER outside (해당국가명) on the date of receipt by OWNER outside (해당국가명) but the delivery date shall be the date on which they are forwarded by COLLABORATOR in Korea.

However, in case the receipt of the documents by OWNER is delayed or the documents are lost in transit due to any reason beyond the control of COLLABORATOR, the delivery date defined in “Scrope of Technical Documents” in ANNEX III shall be prolonged by the period of such delay, and duplicate copies of the documents shall be supplied to OWNER free of chance without loss of much time.

(d) For any major modifications of the technical documents for causing improvements of betterment, an extension of schedule of delivery shall be allowed to COLLABORATOR upon one (1) month over and above the delivery date of the corresponding technical documents as specified in the schedule given in “Scope of Technical Documents” in ANNEX III.

(e) During the implementation of the project, the technical personnel of OWNER or their (해당국가명) consultants will have complete access to the plants of COLLABORATOR with preintimation to COLLABORATOR for collecting information for carrying out detailed engineering fabrication and installation of the PLANT at their own expenses and costs.

2.4 Kick-off Meeting

After EFFECTIVE DATE of this agreement, a kick of meeting shall be held in Korea in order to fix the general procedures for the implementation of the project under this Agreement as follows.

(a) General procedure including procedure for correspondence, general coordination. Etc.

(b) Design basis including codes, standards and statutory regulations to be followed.

(d) Plant layout

(e) Raw materials

(f) Technical documents

(g) Procedure for performance test

(h) Training of OWNER’S personnel

(i) Supervision over erection and start-up operation

(j) Labour requirement

(k) Schedule

The parties hereto agree to complete the Kick-Off Meeting within 30(thirty) days from EFFECTIVE DATE of this Agreement.

The decision reached at the Kick-Off Meeting shall be made in writing singed by the parties and that decision will govern execution of the work under this Agreement.

The traveling expenses including round air ticket and living expenses of OWNER’S personnel attending the Kick-Off Meeting shall be borne by OWNER. It is understood and agreed that the design basis of PLANT stipulated in “Design Basis” n ANNEX II of this Agreement shall not be changed fundamentally at the Kick-Off Meeting.

Technical meeting may be held in Korea and/or in (해당국가명) during the implementation of the project as follows.

(a) Technical Meeting for explanation and question & answer on Technical Documents to be delivered in Group (I), (II) and (III) to OWNER by COLLABORATOR may be held up to three (3) times in Korea after OWNER’S receipt and complete study of the said documents. All the expenses of OWNER’S a personnel attending the above meetings shall be borne by OWNER.

(b) Coordination meetings in (해당국가명) may be held five (5) or up to six (6) times for local engineering and the details of these meetings will be mutually discussed and agreed when required. All expenses including, but not limited to, 1st class hotel accommodation and meals, local transportation etc. incurred in (해당국가명) by COLLABORATOR’S personnel attending the meetings shall be borne by OWNER.

2.6 Supervision over Inspection, Erection Start-up and Guarantee Testing

(a) COLLABORATOR shall recommend to OWNER their technical personnel to be employed by OWNER up to he maximum man-months specified in “Schedule for Supervision” in ANNEX VI hereto for supervision over the inspection, erection, start-up and guarantee testing of PLANT to be carried out by OWNER. In case the said maximum man-months are consumed out and further extension is required, OWNER and COLLABORATOR shall agree, at the same per diem rate as per article 5.4 hereof, to increase the above mentioned maximum man-months and to set up the revised time schedule thorough each party’s Site Representatives.

(b) COLLABORATOR shall further have the right to dispatch their technical personnel to inspect the correct functioning of the equipment in OWNER’S supply portions in conformity with the requirements of BASIC DESIGN PACKAGE and the relevant specifications of equipment. In the event the equipment in OWNER’S supply portions has been found not to meet with such requirements and to affect the correct functioning of the equipment. OWNER shall rectify at OWNER’S cost such defective items to attain the correct functioning thereof.

(1) Round trip air ticket of business class from original working place of the technical personnel to PLANT site.

(2) A single room with bath and air-conditioner at a first class hotel or at a comfortable lodging house within a reasonable distance from PLANT site.

(3) Communication expense such as telex and telephone and air mail for the performance of obligations under this Agreement.

(4) Excess luggage charges for personal effects up to a limit of thirty (30) kgs per person and actual excess luggages of necessary tools plus technical drawings and books brought in by the technical personnel.

(5) Office facilities with storage and type-writer with typist.

(6) Medical and hospital charges including dental treatment,

(7) Transport facilities from and to residence and office of place of work,

(8) Train travel facilities by 1st class or best available means or air tickets for travel within ______.

(9) Other expenses which are necessary for the technical personnel to carry out their obligations under this Agreement, e.g. local tax and levys charged on the personnel, the expenses for the renewal of visa and telephone facilities in the office at PLANT site, etc.

(10) During the period of the technical personnel’s stay in PLANT site, OWNER shall be responsible to.

①take all reasonable measures to safeguard the health and welfare of the

technical personnel

②take all reasonable means to protect the technical personnel from injury.

(b) The other conditions are as per Working conditions of Supervisory Engineers in ANNEX IX of this Agreement.

ARTICLE 3 TRAINING OF TECHNICAL PERSONNEL

COLLABORATOR shall train OWNER’S technical personnel at Cheil’s polyester chip and filament making plant in Korea and also at a continuous polycondensation plant based on DMT and EG as raw materials to be designated by COLLABORATOR up the maximum man-months specified in “Schedule for Training” ANNEX VII of this Agreement. The said schedule for training and number of trainees to be sent in each group shall confirmed by mutual consultation.

OWNER shall bear for his technical personnel all traveling expenses and living expenses to be incurred in connection with the training including the medical expenses but except the expenses directly required for the training.

ARTICLE 4 PROCESS GUARANTEE AND ENGINEERING WARRANTY

4.1 Guarantee

(a) COLLABORATOR guarantees that

Provided OWNER engages the services of a first class Engineering Company in (해당국가명) to do the detailed engineering.

Provided PLANT is designed, constructed, operated and maintained by OWNER and/or subcontractors strictly in accordance with COLLABORA-TOR’S instructions.

Provided equipment of PLANT procured by OWNER from vendors other than through COLLABORATOR shall meet the specifications specified in technical information especially with due proper mechanical performance of equipment to the extent specified by COLLABORATOR.

Provided at least those proprietary items shall be supplied by COLLABO-RATOR in accordance with the “Equipment List” in ANNEX X of this Agreement under the separate Equipment Supply Agreement.

Provided equipment and materials to be supplied by COLLABORATOR under the Equipment Supply Agreement are properly stored and transported and erected strictly in accordance with COLLABORATOR’S instructions.

Provided the specifications of raw materials, auxiliary materials and chemicals and utilities supplied by OWNER to PLANT are of quality and in full quantity as recommended by COLLABORATOR and corresponding to the ones listed in “Design Basis” in ANNEX II hereto, such specifications having been checked by analytical and control methods described by COLLABORATOR.

Provided PLANT is commissioned by OWNER’S skilled operators strictly in accordance with the COLLABORATOR’S instructions, KNOW-HOW and BASIC DESIGN PACKAGE, and

Provided COLLABORATOR recommends minimum number of COLLABO-RATOR’S technical personnel for necessary periods of COLLABORATOR’S check of above prepositions and OWNER shall ask COLLABORATOR for dispatch of technical personnel in accordance with COLLABORATOR’S recommendations.

Plant will be capable of achieving the performance in respect of capacity given in “Performance Guarantee” in ANNEX V.

(b) COLLABORATOR specifically guarantees on the premises mentioned above

(a) that the quality of PRODUCT shall be according to the specifications mentioned in “performance Guarantee” in ANNEX V hereto and that the consumption of raw materials and utilities shall not be more than the figures described in “Performance Guarantee” in ANNEX V hereto.

The said guarantee mentioned in the above (a) and (b) will be proved by means of the procedures of Guarantee Testing described in Article 4.3.

4.2 Start-Up and Guarantee Testing

(a) The operation of PLANT shall be carried out under the technical guidance and supervision of COLLABORATOR’S personnel in accordance with detailed operating and maintenance instruction given in technical information and described in “Scope of Technical Documents” in ANNEX III hereto.

(b) At least one (1) month before the completion of the erection of PLANT, OWNER shall notify COLLABORATOR in writing when the erection of PLANT would be completed. The Site Representatives of each party shall confirm the PLANT is ready for start-up.

All questions arising in connection with the start-up and Guarantee Testing period of PLANT shall be decided jointly by OWNER’S and COLLABORATOR’S technical personnel shall arrive at PLANT site to supervise the commissioning of PLANT.

(c) COLLABORATOR’S technical personnel required to supervise the start-up and Guarantee Testing shall arrive at PLANT site by the dates agreed between the Site Representative of both parties.

(d) OWNER and COLLABORATOR agree to make PLANT be implemented in start-up, using as raw material PAT or DMT and EG as specified in “Design Basis” in ANNEX II hereto. OWNER shall provide sufficient number of experienced and skilled operators including those trained under this Agreement.

(e) Immediately after PLANT is successfully implemented in Start-up within three (3) months after the date of an Erection Certificate of PLANT as confirmed when the erection of PLANT’S equipment is properly completed the Site Representatives of both parties shall sign a Start-up Certificate.

(f) When PLANT has been implemented properly is Start-Up and the necessary technological adjustment has been made and COLLABORATOR’S Site Representative has stated in the log-book that PLANT is being operated correctly by OWNER’S technical operators under the supervision of COLLABORATOR’S personnel, COLLABORATOR’ will decide when the respective Guarantee Testing for the PRODUCT specified in “Performance Grantee” in ANNEX V hereto is to be started and will give at least twenty four (24) hour advance notice of its decision to OWNER’S Site Representative.

COLLABORATOR reserves the right to defer any Guarantee Testing even

though notice of intention to commence the same has been given. OWNER reserves the right as well to defer any Guarantee Testing even after the said notice has been given.

(g) OWNER and COLLABORATOR shall test any instrument before any Guarantee Testing is started, whether the instrument supplied by OWNER or COLLABORATOR, to check its calibration, where necessary.

(h) OWNER agrees to make stored spared parts available during the erection, Start-Up and carrying out of the Guarantee Testing to replace any item of equipment that may be defective of damaged during these course of time.