a. Construction shall be fully completed within 365 calendar days(including all Saturdays and Sundays) following the commencement. The Permit ofUse is scheduled to be obtained by September 30, 2008, and inspection will beginon September 15, 2008. Deadline of Construction shall also apply to otheroutsourced construction work designated by the proprietor.  b. On the location of Construction, an area of 530 square metersdubbed “R&D Area” shall be ready for production on June 1, 2008. Therefore,construction of such R&D Area shall be completed in a weather tight conditionand delivered (including the MEP work) by May 31, 2008.3. Involuntary Delay a. If additional work exceeding the amount of jobs specified hereinis required as a result of any modification made to Construction, Party B shallnotify Party A of the number of additional working days for Construction within10 days, and the parties shall negotiate for a working schedule extension.  b. If Term of Construction is affected as a result of force majeure,acts of God or reasons attributable to Party A, Party B shall submit anapplication for working schedule extension of Construction based on the factswithin 15 days following the occurrence of such result. In the case whereadditional work requires less than half day, the working day shall be ignored;the period more than half day but less than one working day shall be treated asone day (details of the deferral shall be supplied). The number of days requiredshall be submitted to Architect, which will forward the same to Party A forapproval.  c. The deferred or additional period for Construction in thepreceding two paragraphs shall be counted consecutively according to thecalendar system. However, any national holiday below shall not be counted asworking days. (a) National Holidays: New Year Holiday, Labor Day,National Day, and other holidays announced by the Central PersonnelAdministration of the Executive Yuan not to be counted as a working day.  (b) Customary Holidays: Lunar New Year Holidays, QingmingFestival, Dragon Boat Festival, Mid-Autumn Festival and other holidaysannounced by the Central Personnel Administration of the Executive Yuan notto be counted as a working day.  (c) National Election days and other days announced by anylevel of the
 - 2 - 

 
   competent authority any time to be a holiday and not to be counted as aworking day.**Article** **6 Method of Payment**1. No Advancements   The price of Construction is assessed in every two months based on the amount ofcontracted work completed, in each time 95 percent of the construction cost of thecompleted portion is payable, and the outstanding amount shall be paid in fullwithout interest when Construction is fully completed, inspected and accepted, andafter Party B has completed the warranty of Construction. 2. In the event where Party A or Architect discovers that Party B has any one of the situationsbelow, the evaluation of completed works or payment may be suspended until the causes to suchsuspension have been moved: a. Party B fails to render the construction service in accordancewith the drawings, and delays its improvement after it has been demanded by theArchitect.  b. The overall progress of Construction is legged behind by over 10percent of the scheduled pipeline, or there is any concern that Construction maynot be completed before the deadline.  c. Party B defaults any payment payable to its contractor ormaterials supplier and therefore a dispute over Construction has arises.  d. Party A or a third party involved in Construction seeks damagesfrom Party B in vain.  e. Party B is in breach of any term or condition contained herein.  f. Party B fails to honor any check or suffers a similar financialcrisis.3. The seal specimen used by Party B for invoice of construction payment shall be consistentwith the one attached hereto. The right to receive such payment shall not be transferred orassigned to others without Party A’s agreement.
 - 3 - 

 
4. If due to modification of design, additional number of work or project is required, suchadditional work or project shall not be assessed or inspected unless Party A has completed thelegal procedures required. 5. Any amount payable by Party A arising herefrom shall, regardless of its due day, be availablefor offsetting all the damages suffered or expenses incurred by Party A as a result of PartyB’s default and breach of the provisions herein.**Article 7** **Duties of Architect**1. Duties of Architect include the following: (a) To review or modify the design, quality, or amount of workrequired by Construction.  (b) To explain the construction specification and relevant rulesapplicable to this Agreement.  (c) To review on daily reports, construction plans, detailed drawingsand prescheduled pipelines provided by Party B.  (d) To supervise and randomly inspect Construction and randomlyinspect the materials.  (e) To the extent approved by Party A, decide on Party B’sapplications.  (f) To review and approve on Party B’s request for payments.  (g) To control quality of Construction and demand the progress andsafety and health of workers of Construction.
 - 4 - 

 
 (h) To coordinate with other works related to Construction.(2) All of the applications, reports and payment requests made by Party B pursuant to thisAgreement are subject to Architect’s approval or forwarding. Party B shall also notifyArchitect and Party A any filings or report to be submitted to the competent authoritypursuant to the law.(3) The parties shall comply with all the decisions made by Architect within the scope of itsduty, and shall notify Architect in writing of any objection within ten days after thedecision is made.**Article 8** **Modification and Design of Construction**1. Party A has the right to modify, add or reduce Construction any time at its discretion.2. In the case of an unexpected condition, or when the actual condition is far from what isshown in the design drawings, either Party A or Party B has the right to request for change.3. In the event where modification of Construction is required, Party B shall comply with PartyA’s written instruction without objections once it is given. The amount of work to be added orreduced shall be paid based on the unit prices attached hereto; recognition of the amount ofwork added or reduced shall be subject to the result from the amount specified hereindeducting the one that has been completed. Modification of the local construction shall becounted according the amount of locations changed. If any new work is required, its unit priceshall be separately agreed. If the added or reduced amount of work exceeds 10 percent of theoriginal amount specified herein, the unit price of the work exceeded shall be separatelyagreed. If the work involved is merely a minor modification or typically required in thepractice, even if such work is not specified in the drawings or construction specifications,Party B shall pursue such work without objection or requests for additional payment.
 - 5 - 

 
**Article 9** **Construction Plan**(1) When submitting its bid, Party B shall provide its construction plan, which shall include: (a) Site organization chart, which includes the name of keypersonnel, profile, and scope of duty.  (b) Construction implementation plan, which instructs the plan tocarry out each works, and how to coordinate among projects.  (c) Mobilization plan, which instructs location of working places andaccommodation, and the move-in and operation date of the personnel, machineryand equipment.  (d) Construction pipelines, which instructs the commencement andcompletion of each construction work expected from each unit, construction orderof such work, and the number of working hours and dates for milestones.  (e) Machinery and Equipment List, which enumerates the name of eachmachine and equipment to be delivered to Site, the working condition, workinghours, and dates when construction materials are supplied onsite.  (f) Logistic Plan, which indicates the plans concerning materials,reviews, purchasing, transportation, and warehousing in the course of theconstruction.  (g) Safety Plan, which instructs the safety and health managementsystem to be adopted in Construction, and the relevant safety measures.  (h) Quality Control Plan, which instructs the quality controlmeasures to be adopted in Construction, which shall be overseen by a designatedquality control engineer.  (i) Other proposals that may reduce the costs of Construction,shorten the term of Construction, or substitute plans not detrimental to safety,function and quality.
 - 6 - 

 
 (j) Disaster Prevention Plan, which instructs emergency measures inthe case of a typhoon and rain during Construction.  (k) Coordination and management of contractors’ constructioninterface.2. During Construction, Party B shall fill out the daily report in a format agreed by Party A,and submit the same to Architect, which will forward it for Party A’s approval.**Article 10** **Construction Drawings**1. Party B has read this Agreement and inspected the Site, and shall act in compliance with theAgreement. Party B shall be liable for all the damages it suffers as a result of its failureto comprehend the condition of the Site in negligence. In the case of an obscure instructionthat is technically or customary required, Party B shall perform its duty in accordance withArchitect’s instruction without asking for compensation. If the actual condition or man-madebarrier during the term of Construction is inconsistent with the drawings, Party B shallimmediately report to the Architect for a resolution.2. Drawings of this Agreement: All of the illustrations may be mutually supplementary. In thecase of a conflict between two drawings, the latest drawing shall prevail. In the case of aconflict between a document and drawing, the drawing shall prevail. At all times, large-scaledrawings shall prevail over small-scale drawings.3. Prior to commencement of every project, Party B shall submit to Architect and Party A Work’sdetailed field drawings of the site and samples for review, so that the progress ofConstruction will not be affected. If the order or timing of submission of detailed drawingsof Construction is inappropriate or the review is not passed and consequently the progress ofConstruction is affected, Party B shall not request for extension of the deadline on such aground. Materials concerning the overall color matches shall be submitted altogether forreview.4. Party B shall be responsible for illustration of the as-built drawing; Party B shall preparethe triplets and one electronic copy of the drawing, and deliver the same to Party A aftersuch drawing has passed the review of Architect.
 - 7 - 

 
**Article 11** **Site Management**1. Party B itself shall, or appoint one representative who has an experience of over 10 years insite construction (facility construction) to, station onsite. The representative shall overseeand maintain workers of Construction. Party B shall be liable if any worker is in breach ofthe law or has caused any dispute as the result of such breach. If any worker is injured orkilled in an accident, Party B shall deal with the matter, and Party A shall not be liable forwhatsoever. When exiting the Site, the representative appointed by Party B shall notify PartyA of the name of his/her deputy; if Party A considers that such representative appointed byParty B unsuitable for the job, it may notify Party B to replace the person.2. With respect to the onsite materials, machinery and equipment, regardless of whether they areprepared by Party B or supplied by (or lent from) Party A, Party B shall properly manage theitems and liable for any lost or damage of them.3. Party B shall film and record the onsite situations before, after and throughout the term ofconstruction.4. Party B shall appoint a legally qualified safety and health steward to station onsite on afull-time basis, and be accountable for labor safety, health, and environmental protection.5. The construction work rendered by Party B shall be in line with the rules prescribed by theScience Park Administration or other competent authority.**Article 12** **Machinery, Equipment and Materials**1. Unless otherwise prescribed herein, all of the machinery, equipment and materials required byConstruction shall be supplied by Party B.2. Unless otherwise prescribed herein or agreed by Architect, any machine or equipment suppliedby Party B and is part of Construction shall be a qualified new item. Whenever a machine isarrived onsite, it shall be reported. Unless otherwise prescribed herein, each item shall besupported by an inspection report supplied by a professional institution. In the case ofexported machinery, Party B shall provide with the certificate of country of origin(indicating the relevant location and
 - 8 - 

 
manufacturer) at its own expense. Party B shall immediately remove from the Site anymachinery and equipment that fails to pass the inspection, and shall be liable forall the consequential damages and costs arising therefrom.3. Without the agreement of Architect or Party A, any machinery, equipment or materials thathave arrived onsite and entered on the price calculation books shall not be removed by Party Bat will.4. Even if the equipment is inspected at its arrival in the site, the Architect may decline orrequest a substitute of such equipment which a defect is found during the term ofConstruction.5. The premises where Party B stores its equipment and instruments shall be within the areaapproved by Party A, and the items stored up shall not prevent the progress of Constructionand traffic of the streets.6. Within one month after the bid is awarded, Party A has the right to decide the brand of thematerials to be used, and Party B shall not dispute over Party A’s decision with any reasonwhatsoever. However, upon Party A or Architect’s consent, Party B may use materials of otherbrand, provided the substitute brand is in the same quality.7. Within 20 days prior to any need, Party B shall apply for the machinery, equipment andmaterials to be supplied by Party A, so that the item can be delivered onsite in a timelymanner. If the delivery is rescheduled, Party A shall notify Party B of any change one monthbefore the scheduled delivery. If the materials or machinery or equipment to be supplied byParty A cannot be delivered on the scheduled date and consequently Party B suspendsConstruction in whole or in part, Party B may apply to Party A for an extension of theConstruction term , and may seek damages from Party A if any is incurred.**Article 13** **Onsite Safety and Health Facilities**Party B shall provide meals, accommodation, health care and a safe and healthy working
 - 9 - 

 
environment for onsite workers in accordance with the following:1. Labor Safety and Health Act and its Enforcement Rules; 2. Guidelines for Labor Safety and Health Facilities; 3. Relevant rules concerning standards of construction safety and health facilities; 4. To participate in the Cleaning and Safety Agreement Organization pursuant to the Labor Safetyand Health Organization Management and Auto-Checking Guidelines; 5. Crane Equipment Safety Rules; 6. Guidelines for High-Elevation Operations Protection Measures; 7. Electric Construction Safety Measures Explanation and Inspection Guidelines; 8. Labor Health Administration Rules; 9. Labor Safety and Health Training Rules; and 10. Other applicable rules concerning safety and health.**Article 14** **Construction Insurance**Prior to the commencement of Construction, Party B shall obtain and maintain the ConstructionGeneral Damages Insurance for Construction, regarding Party A as a joint insured and beneficiary.Party B shall prepare the insurance coverage according to Party A’s requests. Party B shall, at itsown expense, also insure Party A’s supervisors and its own personnel against employer’s accidentliabilities (NT$3 million), regarding the parties as beneficiaries.1. Party B has obtained the insurance for Construction pursuant to the insurance contentspecified below.2. Party B may increase the insured amount as much as it is necessary; since the insurance feeshave been incorporated in the total bidding price, Party A will not compensate for anyaccident liabilities occurred during the term of Construction.3. Content of Insurance:Within the prescribed time limit, Party B shall properly prepare and maintain the ConstructionGeneral Insurance, Construction Third-party Liability Insurance, Employer’s Accident Liability, andNeighboring Housing Damages Liability Insurance, etc. Party B shall pay for all the insurance
 - 10 - 

 
fees of the above policies, and shall have the discretion to handle any accident occurred duringthe term of Construction. (a) Construction General Liability Insurance – To be insured basedaccording to the contract price, with deductibles not more than NT$100,000.  (b) Construction Third-party Liability Insurance: (i) Over NT$5 million for injury or death per person;  (ii) Over NT$6 million for injury or death per accident;  (iii) Over NT$3 million for financial losses per accident;  (iv) Over NT$9 million for the overall compensation per accident;  (v) No limits on the overall compensation during theinsurance term. (c) Employer’s Accident Liability Insurance: (i) Compensation of over NT$3 million for injury or deathper person;  (ii) Compensation of over NT$3 million for injury or deathper accident;  (iii) No limits on the compensation for death during theinsurance term, and the coverage shall include all of the constructionworkers.  (iv) The insurance coverage shall include Party A andParty B, subcontractors designed by Party A, other contractors involved inConstruction, Architect, and onsite supervisors appointed by Party A. (d) Neighboring Housing Damages Liability Insurance: (a) Collapse: Over NT$3 million per accident;  (b) Cracking: Over NT$3 million per accident. (e) In the event of any accident that may lead to damagescompensation, Party B shall act in compliance with the terms prescribed by theinsurer, and shall be liable for the deductibles specified on the policy and forthe compensation exceeding the claimed amount.  (f) The term of each insurance shall start from the date Constructionis commenced, till the date it is inspected and accepted.  (g) In the case where the insurer requests for onsite inspection forany accident, Party B shall immediately resume its work after the onsiteinspection is finished, and shall not seize its construction work on the groundof a pending
 - 11 - 

 
   claim or on any other grounds.  (h) If Party B regards increasing any insurance limits describedabove is necessary, the additional insurance fees shall be borne by Party B.4. Construction Machinery and Equipment General Insurance:   Party B shall prepare and maintain all of the insurances concerning its constructionmachinery and equipment required in Construction, installation construction generalinsurance, sea, land and air transportation of the purchased equipment, andinsurances concerning self-owned or leased automobiles. 5. Other insurances:   Party B shall obtain and maintain various insurances including theft, fire insurance,accident insurance, and labor insurance, and shall be liable for all the damages andresponsibilities arising from any accident. The various insurance fees borne by PartyB shall be included in the total contract cost, which will not be separately paid byParty A.**Article 15** **Safety Measures and Environmental Protection**1. During the term of Construction, Party B shall comply with Hazardous Work Place Review andInspection Rules, Labor Safety and Health Act and Enforcement Rules thereof, Enforcement Rulesfor Labor Safety and Health Facilities, Water Contamination Prevention Act, Air ContaminationPrevention Act, Air Pollution Prevention Act, and Noises Control Standards, Waste DisposalAct, Construction Safety and Health Facilities Standards, and Guidelines for Establishing RoadTraffic, Sign, Lining, and Signals. Party B shall also implement precautions onsite againststorms and floods, and shall appoint qualified site safety and health personnel to stationonsite on a full-time basis, who shall give directions concerning safety and health measures.If due to Party B’s ignorance any accident is occurred, Party B shall be liable for all theconsequences whatsoever.2. During the term of Construction, if any emergency accident affects the safety of life orproperty, Party B may take proper actions without Architect’s instruction so as to prevent anyloss of life or property. Still, however, Party B shall report to Party A of
 - 12 - 

 
  such event within 24 hours after the occurrence, and shall follow Architect’sinstruction, if any.3. Party B shall strictly restrain its personnel from gambling, brawl, drinking, shouting,wandering, wearing strange outfit, being naked, spitting betel nut juice, littering, speedingand other action that may obstruct the peace and order of the site area. If any worker has adisease or contagious disease, Party B shall swiftly remove him/her from the Site and sendhim/her to a hospital. All of the accidents occurred during the term of Construction shall behandled by Party B. If any person or property of Party A is damaged, Party B shall be liablefor the compensation.4. Party B shall not obstruct the traffic when working on Construction. If suspension of accessis required because of Construction, tentative traffic lining and safety facilities shall beprovided. During the term of Construction, Party B shall set up red flags or danger warningsigns onsite at the daytime. In the nighttime, Party B shall hang red lights up and fence theSite to ensure safety. Party B shall safeguard the safety of the neighboring establishments,people, animals, public facilities and private/public properties, and shall be fully liable ifany accident or damage is occurred as a result of negligence.5. If due to insufficient equipment or poor performance of Party A and Party B’s subcontractorlife, body or property of others is damaged, Party B shall be fully liable for theconsequences, and Party A shall not be liable whatsoever.6. To truly ensure safety of the Site and any area overseen by Party A, the manufacturer shallset up tentative walls around the foundation, and shall control the entry/exit of the walls.7. During the term of Construction, Party Bshall conduct housekeeping of the Site, and ensure roads adjacent tothe Site and premises within buildings clear of any waste, garbage,or materials, scaffolds, tools and other equipments that areunnecessary or disqualified, so as to maintain safety of the Site andtidiness of the working environment. Before the inspection, Party Bshall clean up all the waste and miscellaneous objects from the Siteand adjacent roads, and shall tidy up all of the
 - 13 - 

 
  structures, at its own expense. Within 15 days after Construction is completed, PartyB shall remove all of the construction facilities and unused materials forprovisional constructions from the Site. 8. Party B shall unconditionally repair and restore all of the roads and adjacent environmentsor other facilities that have been damaged due to transportation of Party B’s materials or dueto Construction. 9. Before Party B completes the jobs described above, Architect and Party A will withhold theirexecutions of Party B’s application for the outstanding final payment.**Article 16 Public Facilities**During the term of Construction, Party B shall exercise due care so as to prevent Construction fromdamaging the safety and operation of the surrounding traffic, power supply, telecommunications,water and gas supply and other utilities. If approval of the competent authority is required inadvance, or if relocation is necessary in advance, Party B shall be responsible for all the filingsand correspondences, to which Party A and Architect shall be fully supportive, and Party B shall beresponsible for all the costs arising therefrom. If due to Party B’s negligence or fault any itemis damaged, Party B shall be responsible for the repair or compensation, and shall be liable forall the costs incurred. During the term of Construction, if any road adjacent to the Site isdamaged, Party B shall repair and restore it at its own expense before applying for inspection.**Article 17 Construction Facilities**1. Water and power facilities: Party B shall be responsible for the supply of water and power.Party B shall unconditionally provide other construction contractors with the existing andprovisional water and power supplies, but may negotiate with other users to share the costs. 2. To prevent power outage, Party B shall provide itself withgenerators for emergency. 3. Working and materials compartments and other provisional facilities: Party B shall, at itsown expense, set up provisional facilities at appropriate locations around the Site with PartyA’s approval.
- 14 -

 
4. Telecommunications facilities: Party B shall provide itself with the telecommunicationsfacilities for external contacts of Construction, and shall maintain and manage thetelecommunications systems within the Site and bear the costs thereof. 5. Party B shall provide Party A and Architect each with one independent office required formanagement and supervision of Construction, within which water, power, air conditioning,telephone, the Internet, office desks and furnishings shall be available. Party B shall beresponsible for the housekeeping and hygiene of the offices and shall bear the costs thereof. 6. Party B shall provide with simple visual telecommunications facilities for Party A to havebird’s eye view of the whole Construction of the Site.**Article 18 Cooperative Construction**1. If another construction is pursued while Construction is being built, Party B shall, in ahope to fully complete its plan, coordinate and negotiate with builders of such otherconstruction so as to avoid construction conflicts, mutual interference, or unnecessaryexcavation or repair. In the event of any dispute between any two builders, Party B shallfollow Architect’s or Party A’s arrangement, deployment and decision without any objection.Nor shall Party B seeks any compensation from Party A. 2. Unless it is required by foundation digging, plants within the Site shall not be destroyed orremoved by Party B, and may be replanted at a location designated by Party A.**Article 19 Disaster Treatment**During the term of Construction, when any damage occurs due to force majeure that has beenconfirmed not as a result of Party B’s negligence, Party B shall report to Party A and Architect ofsuch event immediately, and within three days after such occurrence shall provide with a writtenreport; any report given after the prescribed time limit will not be dealt with. In the event wherethe force majeure is confirmed having an impact on the progress of Construction, Party B shallapply for an extension of the term of Construction based on the facts, which is subject to PartyA’s review.
- 15 -

 
Pursuant to the regulations (see Article 14), Party A will not compensate Party B for anyjob that has been covered by the insurance.**Article 20 Encumbrance Removal Treatment**If due to Party A’s acquisition of land or modification of the design the progress of Constructionis affected in whole or in part, Party A may, based on the actual situation, assess the number ofworking days that shall not be counted, or the length of extension. If however such encumbrance isremoved, Party B shall continue with the Construction at its best, and liabilities for costs andexpenses as a result of such encumbrance shall be separately negotiated by the parties.**Article 21 Deferral of Construction**During the term of Construction, if due to any of the situation that is confirmed not a result ofParty B’s negligence, Party B may apply for extension of Construction term based on the actualsituation within three days after occurrence of such situation, and Party A shall assess the numberof days in the extension:1. An event of force majeure; 2. Party A requests all or part of Construction be suspended; 3. Design is modified or amount of construction work isincreased; 4. Party A fails to perform its duty, or there is any reasonattributable to Party A; 5. Any delay of a relevant construction work that affectsprogress of Construction; and 6. Other application of Party B that has been approved by PartyA.**Article 22 Deferral of Commencement of Construction**If Construction is not commenced within six months following execution of this Agreement for anyreason attributable to Party A, Party B may request for rescind of this Agreement withoutcompensation. If due to any reason Construction is not started or is deferred for less than sixmonths, Party B shall commence Construction any time when the encumbrance has been removed, andshall waive its right to increase the price of Construction and to ask for compensation for itsdamages.**Article 23 Compensation for Default**1. If Construction is not completed before the deadline pursuant to Article 5 of this Agreement,Party B shall be deemed in default, and shall be liable for a default penalty of 0.1 percentof the total contract price per day within a period of 10 days starting from the scheduleddeadline, and for the days defaulted after the 10-dayperiod, Party B shall be liable for a default penalty of0.2 percent of the total price
- 16 -

 
  per day, all of the default penalties are to be deducted from the constructionpayment payable to Party B. 2. All of the default penalties combined shall be subject to a maximum sum of 20 percent of theconstruction price. In the case of default, Party A may terminate this Agreement in whole orin part pursuant to Paragraph 2, Article 33 of this Agreement, and Party B shall have noobjections in this regard.**Article 24 Working Acceleration**During the term of Construction, unless at Party A’s request for reducing the term, which theparties shall negotiate for an additional sum for the cost of working acceleration, if Party A asksfor additional workers or facilities or nigh-shifts, Party B shall act in compliance with Party A’srequests without any objection or additional compensation.**Article 25 Seizure of Construction**During the term of Construction, if Party A or Architect notifies Party B to seize Construction inwhole or in part, Party B shall act accordingly, and shall continue to maintain the portion ofConstruction that has been completed as well as the equipment and facilities onsite. Unless seizureof Construction is due to any reason listed below, Party A shall compensate Party B for additionalcosts including wages, depreciation of the construction equipment, and management fees based ontheir respective unit prices specified herein. Party B shall submit its request for compensationwithin 10 days after receipt of Architect’s written notice for seizure. Any such request submittedafter the time limit will not be dealt with.1. Any situation otherwise specified herein; 2. Seizure is necessary due to the climate conditions of theSite; and 3. Any situation as a result of Party B’s negligence.**Article 26 Site Meeting**During the term of the construction, site meetings shall be held regularly. Party B’s siterepresentative and relevant personnel shall not be absent from the meetings without justifiedcauses. If required by the Architect, Party B’s company representative or technician or contractshall also attend the special site meetings summoned by Party A or Architect, and shall act incompliancewith the resolutions of such meetings.
- 17 -

 
**Article 27 Confident laity**1. Party B agrees to be liable for confidentiality and not to disclose to a third party anyconfidential information with respect to Party A’s business or technology that came to PartyB’s awareness or became in Party B’s possession as a result of Construction. 2. Party B agrees to be liable for confidentiality of the content specified in thenon-disclosure agreement.**Article 28 Supervision and Inspection of Construction**1. During the term of Construction, when Party A or Architect inspects quality of Constructionpursuant to the applicable regulations, Party B shall provide any assistance and conveniencerequired, and shall dispatch its personnel to assist in the matters. 2. If Party A or Architect discovers the quality of work performed by Party B falls below therequirement specified herein, or when any inappropriate measure may harm safety ofConstruction, Party A or Architect may instruct Party B to make improvements within a timelimit, or to destruct the portion of work that does not meet the requirements. If Party Bfails to follow such instruction within the time limit, Party A or Architect may demand PartyB suspend Construction in whole or in part, and the work shall not be resumed untilimprovement or destruction demanded has been completed and recognized by Party A andArchitect, and Party B shall not ask for working schedule extension or compensation on thisground. 3 During the term of Construction, Party B shall request for inspection according to thescheduled pipelines. In the event where Party A or Architect discovers Party B has started thework scheduled in a following pipeline without applying for inspection of the work of acertain pipeline, it may request Party B destruct the portion that has been done, and Party Bshall have no objections and be liable for all the damages incurred therefrom. 4. During the term of Construction, if Party B fails to make improvements according toParty A’s or Architect’s instruction, or fails to fully follow a given instruction ina
- 18 -

 
  prescribed time limit, Party A or Architect may not enter the relevant costs on thebook or may stop the payment requested, or postdate the payment check, or deduct thecurrent construction payment from future payments according to the existingsituation. Party A may also hire hands to proceed Construction, charging Party Bhourly wages and materials fees based on the current market prices with a mark-up of50 percent of the prices, and the charges will be deducted from the latestconstruction payment or retained payment.**Article 29 Partial Completion**1. Before Construction is fully completed, Party A and Architect may inspect the partial workthat has been done and henceforth take over the partial work. 2. Without prejudice to Party B’s performance of its duty, Party A may notify B to use thepartial work that has been completed. Party A shall take it over after the parties havenegotiated for the delineation of rights and obligations. The Architect shall decide withrespect to whether Construction is obstructed, and Party shall not have any objection. Duringthe term of Construction if a subject is lost or damaged because it is of a consumable or ofany reason not attributable to Party B, Party A shall be liable for all the consequences, andthe amount and extension of term shall be separately agreed by the parties.**Article 30 Inspection and Acceptance**1. When Construction is fully completed, when the application for Permit of Use has been filed,and when Construction is ready for use, Party B shall apply for inspection in writing,providing with the as-built drawing, certificate of imported materials, certificate of origin,maintenance guidance handbook, construction final calculation statement, and construction termfinal calculation table. After they are confirmed by Architect and Party A in a preliminaryinspection, the date for an official inspection and acceptance shall be scheduled. If theprimary inspection is not accepted, Party B shall submit another date of completion foranother preliminary inspection. The date of completion shall be the date of primary inspectionis passed. 2. For the official inspection and acceptance, Party B shall dispatch its personnel to the Site.If Party B fails to be present on the Site, Party A and Architect may proceed the officialinspection and acceptance, and Party B shall not have any objection towardsthe result of official inspection and acceptance.
- 19 -

 
3. For the official inspection and acceptance, Party A and Architect may request Party B toexcavate or destruct a part of Construction for inspection. Party B shall act in compliancewith respect to the request and repair the destroyed work. The costs for destruction andrepair shall be borne by Party B if the inspection result indicates that Party B fails tocomply with this Agreement; otherwise the costs shall be borne by Party A, provided that thetotal amount is less than NT$100,000. If the amount is over NT$100,000, Party B shall beliable for the costs. 4. If result of the official inspection indicates that Party B has failed to comply with thisAgreement, Party B shall, within a period of 15 days, or undertakes to Party A and Architect,provide a deadline for modification agreed by Party A and Architect. After the modification iscompleted, Party B shall not ask for any compensation and shall apply for the first-timere-inspection. 5. In the first-time re-inspection, if new defects are found Party B has corrected the defectsfound in the primary and official inspection and acceptance, Party B shall, within 10 daysafter the new discovery (or in a period for correction agreed by Party A and Architect)request for the second-time inspection. If the defects found in the first-time inspection havebeen corrected, inspection and acceptance is completed. If the defects found in thesecond-time inspection are not corrected, Party B shall be deemed in default and shall beliable for a default penalty of 1 percent of the total construction price per day startingfrom the date following the second-time inspection, till the date when all the defects arecorrected. 6. After inspection is completed and Construction is accepted, Architect shall report to PartyA, which shall issue to Party B a certificate of completion of Construction, and shall returnthe performance bond to Party B after it has completed the procedures of constructionwarranty. Party A shall also conduct final clearing of the construction payment, and shallsettle the outstanding construction payment.**Article 31 Warranty of Construction**1. Staring from acceptance and delivery of Construction, the structure of Construction is givena warranty of 10 years, and water-proofness of Construction is given a 5-year warranty. Forother nature not prescribed above, Party B shall provide a warranty of 2 years. During theterm of each warranty, if a part or whole of Construction suffers dislocation, leakage, cracking, collapse or other damages, which
- 20 -

 
  has been confirmed to be resulted from unsound materials or quality rendered by PartyB, Party B shall, after notified by Party A, immediately repair or remove the damagewithout compensation. If Party B fails to repair within five days upon receipt of thenotice, Party A may hire hands to have the situation fixed, and the costs andexpenses arising therefore will be deducted from Party B’s Warranty Bond, and anyinsufficient amount of the bond shall be paid by Party B. If Party B still cannotperform its duty, the guarantor shall return the money. Parry B shall also be liablefor repair or compensation in the case where Party A or a third person suffers lossesas a result of the aforementioned defect or repair. Party B shall complete thewarranty procedures for Construction before asking for settlement of the outstandingpayment, and shall pay the construction warranty bond (with a written guaranteeendorsed by a bank), which is in the amount of 3 percent of the construction clearingpayment. 2. Warrant of Construction can be divided into two terms. The first term is six month frominspection and acceptance. If Party B completed the correction of any defect pursuant to thepreceding paragraph, after three months an amount of 60 percent of the warranty bond shall bereturned. 3. The second term is two years from inspection and acceptance of Construction, and when Party Bhas corrected the defects as required, Party A shall return to Party B the remaining warrantybond. Still, Party B’s warranty liabilities under this Agreement shall conform to theprovision of Paragraph 1, Article 31 of this Agreement.**Article 32 Incentives to Construction**Party A shall reward Party B with a medal if Party B has rendered outstanding work of Constructionor shortened the term of Construction, and shall invites Party B to join significant tender forbidders as encouragement on its own initiative.**Article 33 Discharge or Termination of Agreement**1. This Agreement is discharged or terminated at Party A’s request:   Whenever required, or when the court or governmental institution gives an order ofstoppage for a period of over 180 days in accordance with the law, Party A maydischarge or terminate this Agreement. Once notified, Party B shall immediately stopits operation. Party A shall, not only inspect the work that has been completed by
- 21 -

 
  Party B as well as the qualified machinery and equipment onsite, and pay to Party Bthe unit prices based on the price list attached hereto (in the case of absence ofsuch list, the prices shall be separately agreed by the parties), it shall alsonegotiate with Party B for a resolution. Party B shall continue to maintain the workthat has been completed until Party B takes it over. After this Agreement isterminated, Party B shall still be liable for all the obligations specified herein. 2. This Agreement is discharged or terminated due to Party B’s negligence:   In the event where Party B has any one of the situations below, Party A mayterminate this Agreement any time and may invite other bidders to finish a whole orpart of Construction, or may complete Construction by itself. Party B and itsguarantor shall be jointly liable for all the damages arising therefrom. (a) Party B bids for Construction under another person’s trade name.  (b) Party B fails to commence its work for over 30 days on thescheduled commencement date.  (c) Party B lags behind in its progress of Construction, and it isforeseeable that Construction will not be completed according to the schedule,or Party B is rash in its performance of Construction, without following PartyA’s instruction for corrections.  (d) Before Construction is fully completed, Party B seizes itsoperation for over 15 days without justified causes.  (e) Party B fails to comply with the requirements specified herein.When Party B discharges or terminates this Agreement on the ground of any situation above, it shallimmediately stop its operation, discharge its workers and deliver the materials, machinery andequipment to be subject to Party A’s total authority. Regardless of whether Party A completesConstruction by itself or invites other bidder to complete it, the final clearing shall not startuntil Construction is fully completed and before the contractual obligations are discharged. In thecase of any other pursuance of compensation, Party A will still be able to seek damages from PartyB in accordance with the law.When Party A has discharged or terminated this Agreement, Party B shall, after being notified byParty A, assist in amending the construction permit and other necessary license or registration
- 22 -

 
without delay. Party B also agrees that when this Agreement is terminated and after final clearingof Construction is completed, it will issue a sealed letter of consent to amend the constructionpermit, and will authorize Party A to amend such permit with it.3. This Agreement is discharged or terminated due to Party A’s negligence:          When Party A has any one of the situations below, Party B may discharge or terminate thisAgreement: (a) Party A requests reduction of the construction price down to 50percent of the original price.  (b) Party A request stoppage for over 180 days for any reason notattributable to Party B.  (c) It is foreseeable that Party A is unable to pay the constructionprice. When this Agreement is terminated pursuant to this paragraph, Party Ashall, not only pay to Party B for the all the work completed and the qualifiedmachinery and equipment onsite, but also compensate Party B for all the damagesarising from termination of this Agreement, including: employee severance pay,dismantling fee of machinery, equipment, and non-purchased instrument, and thestoppage fee starting from the date this Agreement is terminated till Party Bvacates the Site. However, lost of Party B’s expected profit in relation to thisAgreement, or of the opportunity forfeited to perform this Agreement shall notbe any ground for damages as result of termination of this Agreement.**Article 34 Performance Warranty**1. Within three days after the bid is awarded, the winning bidder shall come to Party A andArchitect for agreement documents, and shall execute the Construction Agreement within 30 daysafter the bid is awarded. 2. Upon execution of this Agreement, Party B shall provide a performance bond equivalent to 10percent of the contract price in the form of a Bank of Taiwan check, bank draft, bear’sgovernment bond, certificate of deposit, joint guarantee, joint guaranteed insurance policy,or standby letter of credit issued by a financial institution. The performance bond describedabove or guarantee form shall be paid infour installments, each is in the amount of a quarter of the construction price, and
- 23 -

 
  shall be returned without interest. 3. If this Agreement is amended or additional new work is incorporated, the additional orreduced construction price shall be counted in the original contract price, and Party A maysuffice or return the performance bond proportionally.**Article 35 Treatment of Construction Dispute**1. In the case of any dispute between the parties with respect to any provision of thisAgreement, and when Architect’s decision are not satisfied by the parties, the parties shallresort to the Arbitration Association of the Republic of China, and solve the dispute througharbitration in accordance with the arbitration procedures of the Association. 2. If the parties do not want to solve the dispute through arbitration, when any action isimitated concerning a dispute, the parties hereby agree to submit to the Taipei District Courtin the first instance. 3. When the dispute case is still pending, Party B shall not seize its operation without PartyA’s consent, and shall continue to perform its obligations hereunder. 4. In the event where the construction payment is retained by the court’s order due to anyfinancial dispute between Party B and another party, Party B shall not seize its payment onthis ground, and shall be liable for all the costs and damages incurred.**Article 36 Term of Agreement**This Agreement shall become effective when executed. The term of this Agreement shall not end untilConstruction is fully completed, passes Party A’s inspection, and when the term of warranty isended. But this Article shall not apply to the situation under Article 33 herein.**Article 37 Supplementary Provision**1. This Agreement shall be executed in two originals, each shall be retained by one party. PartyA shall retain three copies of the original, Architect one party, and Party B two copies. Theparties and Architect each shall also retain one copy of thesummary copy.
- 24 -

 
2. The parties shall be responsible for the stamp duty of their respective original of thisAgreement.
- 25 -

 
**Signatories:**   Party A: Impax Laboratories (Taiwan), Inc. Party B: Fu Tsu ConstructionResponsible Person: Hsu, Chung-Chiang Responsible Person: Lin Chi-ShengUniform Invoice No.: 28112462 Uniform Invoice No.: 14054955Address: Address: 14-16/Fls., 27 Zhongshan N. Rd., Sec. 1, TaipeiTel. No.: (037) 586-268 Tel. No.: (02) 2551-7559   Architect: J. J. Pan and Partners  Address: 21, Lane 12, Alley 118, Renai Rd.,   Sec. 3, Taipei  Tel. No.: (02)2701-2617  
- 26 -