REGULATION ON ESTABLISHING STARTUP COMPANIES NEXT TO THE RESEARCH INSTITUTIONS First. General statement

1.1. The main goal of the regulation is to set basic principles of establishing, registering startup companies next to Research institutions and to regulate concerning problems in the frame of the relations. 1.2. The research organization stated to in Article 1.1 of this Regulation shall refer to the bodies specified in Articles 11.2.1, 11.2.2 and 11.2.3 of the Law on Science and Technology. 1.3. Scientific and technologic experimental introducing operation of the startup companies shall be regulated by Law on Science and Technology; relations with the production of innovation products shall be regulated by law on Innovation; relations of establishing, changing and liquidating companies, management structure, monitoring pattern, and the rights and obligations of shareholders shall be regulated by Law on Company as well as other relevant laws. 1.4. The terms used in this regulation shall be interpreted as follows: 1.4.1.“Innovation project "as determined in Article 3.1.6 of the Innovation Law 1.4.2 "Startup company" is referred in Article 3.1.8 of the Innovation Law 1.4.3. "Initiator of innovation project" (hereinafter referred to as "the project initiator") means a citizen initiates an innovation project to introduce intellectual property into circulation of the economy. 1.5. Duration of Innovation Project is up to 3 years. 1.6. Depending on the experiment and processing feature of the product and results of verification of the product that results from the project, the project implementation period can be extended once by up to 2 years.

The Research Institution shall submit a request for extension of the term to the State Central Administrative body in charge of innovation before the expiration of an innovation project one month.

Second. Registering innovation project 2.1. The project initiator shall submit a request for registration of an innovation project developed for the start-up company to the Scientific Board of Research Institutes holds the right of Intellectual Property. 2.2. If an intellectual property owned by project initiator was created as a result of the project at the research institution, an innovation project may be implemented startup company to take into consideration of the project initiator. 2.3. The Innovation Project shall meet the following requirements set forth in Article 14.1 of the Law on Innovation. 2.3.1. Including proposals with common goals of creating innovation. 2.3.2. Confirming the unreliability of the proposed project and the validity of intellectual property rights; 2.3.3. Calculating technical and economic statement, cost-benefit calculations of the innovation project. 2.3.4. Creating a human resources team to implement innovation projects. 2.4. The product which produced as a result of the innovation project will meet the requirements set forth in Article 15.1 of the Innovation Law. 2.5. The initiator of the Innovation Project shall submit the following documents to the Scientific Board of the organization specified in Article 2.1 of this Regulation. 2.5.1. Request with justification for establishing a startup company; 2.5.2. A project that meets the requirements of Section 2.3 of this Regulation 2.6. The Academic Council shall guide the Innovation Law 14.1 to select an innovation project to set out a startup company.

2.7. The research institution shall submit the following documents to the State Administrative organization in charge of innovation issues when registering the selected innovation project. 2.7.1. Statement on resolving to implement innovation project by the Scientific Board. 2.7.2. Innovation project proposal from the initiator. 2.8. According to Article 15.2 of the Law on Innovation, the conclusion of whether the innovation product meets the requirements set forth in this Law shall be made by the State Central Administrative body in charge of innovation on the basis of the expert's conclusions. 2.9.The State Central Administrative body in charge of innovation shall register and insert information into the database of the innovation projects which meet the requirements for in the provision 14 of Law on Innovation within 14 days from the date request. 2.10. The State Central Administrative body in charge of innovation issues shall respond to the scientific institution for the registration of the project. Third. Establishing a startup company 3.1. The legal entity, innovation project initiator whose purpose is to implement an innovation project registered under Article 2.9 of this Regulation shall be established in accordance with the Law on Company. 3.2. The research institution shall send information on new startup company to the State Central Administrative body in charge of innovation. 3.3. The State Central Administrative body in charge of innovation issues shall inform the information on newly registered startup company to the State organizations in charge of taxation, customs, labor, civil registration, nationality, migration, foreign investment and land affairs officially in writing documents. 3.4. The company established according to the regulation shall enjoy the discounts and support provided in the Law on Innovation and other laws and regulations.

3.5. The startup company shall conclude a license agreement with a research institute specified in Article 2.1 of this Regulation and a license agreement shall be registered with the Intellectual Property Office. The relations arising out of a license agreement shall be resolved according to the Patent Law. 3.6. The founder of the startup company shall conclude a contract to establish a legal entity. The contract includes issues such as principle of co-operation, obligations, charter funds, acquiring and using intellectual property, and confidentiality of technology. 3.7. The founder of a startup company shall evaluate an intellectual property to be used for the company activities by the authorized professional organization and register it for non-current assets of the research institute. 3.8. The research institution may participate in the creation of a charter fund in accordance with Article 27.3 of the Law on Innovation. 3.9. The startup company shall have the Board of Directors (hereinafter referred to as the "Steering Committee"). The founder of the Company shall be represented by the Board of Directors on the share capital of the paid-in capital. A member of the Scientific institution shall be appointed by the Academic Council. 3.10. The initiator of the project may hold executive position for the startup company, and it should be included in the internal procedures of the research institution. 3.11. The research institution will provide the startup company with laboratories to test and improve developing technology and with necessary support and assistance in research and experiment. Also the startup company may use infrastructures such as workplace, internet networks for discounted conditions.

Fourth. Terminating the activities of the startup company 4.1. Operation of the Startup company and implementation progress and results of the innovation project are discussed semi-annually by the Scientific council.

4.2.If the Scientific Council determines that the company has not started its operation or it is also impossible to conduct an innovative experimental or production within a year of establishment, Research institutes may request to the State Central Administrative organization to terminate the startup project under the basis of the negotiation of Research institution and the founders of the startup company. 4.3.The State Central Administrative body in charge of innovation issues shall examine the request specified in provision 4.2 of this Regulation and make a decision within 14 days and to inform the research institution. 4.4. In case of expiration of the innovation project, the founders or shareholders of the company shall decide on whether to continue. 4.5. Accelerated mortality and depreciation of the property created during the startup operation shall calculate according to the provision 17.1.3 of the Law on Innovation.

Fifth. Miscellaneous 5.1. The relations concerning to the issues such as keeping, securing and using confidentiality of the information of the startup company shall be regulated by the Law on State Secrecy, the Organization's Privacy and the Privacy Law. 5.2. The founders of the startup company shall define the rights and obligations related to the confidentiality of information and the prevention of illegal possession in the contract in detail.