Regulations Governing the Offering and Issuance of Securities by Securities Issuers Article 25

Except as otherwise regulated by laws, an issuer registering the issuance of secured corporate bonds backed by stocks of another company shall comply with the following:1. The collateral shall be restricted to stocks, owned for 1 year or more by the issuer, of a listed company or a company whose shares are traded at the business places of securities firms in accordance with Article 3 of the TPEx Review Rules. The said collateral may not be attached with any restriction such as the creation of a pledge, restricted trading in the Stock Exchange market or an OTC market, change of trading method, or suspended trading.2. The value of the collateral upon registration may not be lower than 150 percent of the principal and interest to be borne by the subject corporate bonds to be issued.3. The collateral shall be mortgaged or pledged to the trustee of creditors, and it shall be noted in the trust contract that during the term of the corporate bond, the trustee shall daily evaluate the collateral based on its closing price. In case where the value of the collateral decreases to the extent that the collateral maintenance ratio is lower than a certain percentage of the principal and interests to be borne by the subject corporate bonds to be issued, the trustee shall promptly notify the issuer to settle the shortfall. The issuer shall settle the shortfall within 2 business days upon receipt of notification from the trustee, and shall state in the trust contract the actions to be taken when the issuer fails to settle the shortfall within the time limit, as well as the mandatory responsibilities of the trustee.