exv4w8



 



Exhibit 4.8


EQUITY TRANSFER AGREEMENT




		
	 	     This Equity Transfer Agreement is made as of December 12, 2002:




	 	 	 
	PARTIES:	 	
Fushun Electric Porcelain Works, an enterprise organised and existing pursuant
to the Laws of the People’s Republic of China (“PRC”), and registered with the
Fushun Municipality Administration of Industry and Commerce, Liaoning Province
with its legal address at 2 Liquan Road, Xinfu District, Fushun, Liaoning
Province, PRC (“Transferor”).
	 	 	 
	AND:	 	
Trench (UK) Limited, a company organized and existing under the laws of the
United Kingdom with its legal address at South Drive, Hebburn, Tyne & Wear NE31
1UW (“Trench UK”).
	 	 	 
	AND:	 	
Trench Limited, a company organized and existing under the laws of the Canada
with its legal address at 71 Maybrook Drive, Scarborough, Ontario, Canada M1V
4B6 (“Trench Canada”).
	 	 	 
	AND:	 	
Shanghai Instrument Transformer Works, a company organized and existing under
the laws of the PRC with its registered address at 427 Jumen Road, Shanghai,
PRC (“SITW”).
	 	 	 
	 	 	
For the purpose of this Equity Transfer Agreement, unless otherwise provided in
this Agreement, Trench UK and Trench Canada will be referred to collectively as
“Trench”, and Trench Canada and SITW will be referred to collectively as
“Transferee”.




		
	 	     WHEREAS:




	 	A.	 	The Company is a Sino-foreign joint venture established on December 20, 1995
pursuant to a joint venture contract and articles of association dated 27
November 1995 between the Transferor and VA Tech Reyrolle Limited (formerly
known as “Reyrolle Limited”), a company organised under the laws of the United
Kingdom (“Reyrolle”).
	 
	 	B.	 	Pursuant to an Asset Sale and Purchase Agreement dated 18 April 2000 between
Reyrolle and Trench UK and others, Trench UK acquired from Reyrolle fifty point
four percent (50.4%) of the registered capital in the Company, being all of the
registered capital held by Reyrolle in the Company. An agreement to amend the
joint venture contract and articles of association accordingly was executed on
21 April 2001. The Approval Authority approved the acquisition by Trench UK
and the consequential amendments to the joint venture contract and articles of
association and issued a certificate of approval on December 7, 2001.
	 
	 	C.	 	Until the date hereof, the ownership of the registered capital of the Company
was apportioned as follows:



 






 







	 	 	 	 	 	 	 	 	 
	Owner	 	Percentage (%)	 	Amount of Registered Capital in RMB
	Transferor
	 	 	49.6	 	 	 	16,727,000	 
	Trench UK
	 	 	50.4	 	 	 	16,997,000	 
	 
	 	 	
	 	 	 	
	 
	Total
	 	 	100	 	 	 	33,724,000	 




	 	D.	 	The Transferor wishes to transfer in aggregate forty seven point six percent
(47.6%) of the registered capital to Trench Canada and SITW in the following
proportions:




	 	 	 	 	 	 	 	 	 
	Recipient	 	Percentage (%)	 	Amount of Registered Capital in RMB
	SITW
	 	 	33	 	 	 	11,128,920	 
	Trench Canada
	 	 	14.6	 	 	 	4,923,600	 
	 
	 	 	
	 	 	 	
	 
	Total
	 	 	47.6	 	 	 	16,052,520	 




	 	E.	 	The Parties agree to the Transfer upon the terms and conditions set forth in
this Equity Transfer Agreement.
	 
	 	F.	 	To reflect the Transfer, the Parties have agreed to amend and replace the
Original JV Contract and the Original Articles of Association of the Company.




	 	 	 	NOW THEREFORE, in consideration of the foregoing and of the mutual promises and
covenants contained herein, the Parties hereby agree as follows:




	 	1.	 	DEFINITIONS
	 
	 	1.1	 	
In this Agreement the following terms shall have the following meanings:
	 
	 	(a)	 	“Agreement” means this Equity Transfer Agreement.
	 
	 	(b)	 	“Approval” means the following on terms and conditions satisfactory to Trench
and SITW:
	 
	 	(i)	 	approval of the Approval Documents by the relevant Approval Authority and the
issue of the approval certificate;
	 
	 	(ii)	 	the Fushun Court Approval;
	 
	 	(iii)	 	completion of the Business Registrations; and



 






 







	 	(iv)	 	Such other approvals required by Trench and SITW.
	 
	 	(c)	 	“Approval Authority” means the Fushun Commission on Foreign Trade and Economic
Cooperation, or any other competent authority, including, without limitation,
FAIC, the State Assets Administration Bureau and the Fushun Court or such other
authority or authorities as SITW or Trench may determine.
	 
	 	(d)	 	“Approval Documents” means the documents listed in Article 5.1 and all other
documents required to be submitted for the Approval.
	 
	 	(e)	 	“Board” means the board of directors of the Company.
	 
	 	(f)	 	“Business Day” means any day other than a Saturday or Sunday or a statutory or
civic holiday in the People’s Republic of China.
	 
	 	(g)	 	“Business Registrations” means the business registrations described in Article
5.4.
	 
	 	(h)	 	“Conditions Precedent” means the conditions set out in Article 2.2.
	 
	 	(i)	 	“Company” means Fushun Reyrolle Bushing Co., Limited, a Sino-foreign equity
joint venture established and existing under the laws of the PRC with its legal
address at the Economic Development Area, Fushun, Liaoning Province, PRC.
	 
	 	(j)	 	“Claimants” means the claimants under the Fushun Court Orders;
	 
	 	(k)	 	“Closing” means the performance of the acts set out in Article 7.
	 
	 	(l)	 	“Closing Date” means the date being not more than fifteen (15) Business Days
after the date on which the last of the Conditions Precedent is fulfilled to
the satisfaction of both Trench and SITW. The date on which the last of the
Conditions Precedent is fulfilled shall be the date agreed by Trench and SITW
and notified in writing by Trench to the Transferor.
	 
	 	(m)	 	“Due Diligence” shall include, but shall not be limited to:
	 
	 	(i)	 	financial and accounting, business, environmental, design, engineering and
construction and legal due diligence on the Company, the Transferor, the Equity
Interest, and all the assets of the Company and all employees referred to in
Article 6 and the conditions of employment of those employees;



 






 







	 	(ii)	 	due diligence on the value of the Company, which shall include the
commissioning and issuance of the SITW Valuation to SITW and the review and
approval of the SITW Valuation by the State Assets Administration Bureau ;
	 
	 	(iii)	 	due diligence on the Fushun Court Orders and all circumstances giving rise to
the Fushun Court Orders, including procedures and conditions for securing the
absolute and unconditional release and discharge of the Fushun Court Orders;
and
	 
	 	(iv)	 	such other matters pertaining to or affecting or relating to the Company or the
Equity Interest (whether directly or indirectly) that SITW and Trench desires.
	 
	 	(n)	 	“Equity Interest” means the whole or any part of the Total Equity Interest.
	 
	 	(o)	 	“FAIC” means the Fushun Administration of Industry and Commerce.
	 
	 	(p)	 	“Fushun Court” means the Fushun City Intermediate Court or any other court or
tribunal in any jurisdiction which has or may in the future issue any
direction, order or award affecting the Equity Interest.
	 
	 	(q)	 	“Fushun Court Approval” means:
	 
	 	(i)	 	the approval of the Fushun Court to the Transfer under this Equity Transfer
Agreement;
	 
	 	(ii)	 	any such order, direction or award by the Fushun Court specifying the terms for
securing the unconditional release and discharge of the Fushun Court Orders;
and
	 
	 	(iii)	 	the unconditional release and discharge described in paragraph (ii) above,
	 
	 	 	 	which must be in form and substance satisfactory to each of Trench, SITW and
the Claimants.
	 
	 	(r)	 	“Fushun Court Orders” means the following orders issued by the Fushun Court:
	 
	 	(i)	 	property preservation order against the Transferor’s equity holdings in the
Company in favour of the Fushun City Social Security Insurance General
Corporation issued on 11 April 2002;
	 
	 	(ii)	 	property preservation order against the Transferor’s equity holdings in the
Company and debts in favour of the Fushun City Housing Fund Administrative
Bureau issued on 18 July 2002;



 






 







	 	(iii)	 	property preservation order against the Transferor’s equity holdings in the
Company and its deposits or assets in favour of the Bank of China Fushun Branch
issued on 30 August 2002;
	 
	 	(iv)	 	the enforcement assistance order issued to the Company in relation to the
property preservation order described in paragraph (iii) dated 2 September
2002; and
	 
	 	(v)	 	any other order or direction from any court or tribunal in any jurisdiction
which affects the Equity Interest.
	 
	 	(a)	 	“Original Articles of Association” means the Articles of Association of the
Company dated 27 November 1995 as amended, supplemented or otherwise modified
from time to time.
	 
	 	(b)	 	“Original JV Contract” means the joint venture contract of the Company dated 27
November 1995 as amended, supplemented or otherwise modified from time to time.
	 
	 	(c)	 	“Purchase Price” is defined in Article 4.1.
	 
	 	(d)	 	“Related Agreements” mean the following agreements signed concurrently with
this Agreement:
	 
	 	(i)	 	the Revised Joint Venture Contract;
	 
	 	(ii)	 	the Revised Articles of Association; and
	 
	 	(iii)	 	any other relevant agreements or documents which relate to the Revised Joint
Venture Contract, the Revised Articles of Association or this Equity Transfer
Agreement or the matters contemplated therein.
	 
	 	(e)	 	“Revised Articles of Association” means the revised Articles of Association
attached to this Equity Transfer Agreement as Annexure A.
	 
	 	(f)	 	“Revised Joint Venture Contract” means the revised Joint Venture Contract
attached to this Equity Transfer Agreement as Annexure B.
	 
	 	(g)	 	“SITW Valuation” means such valuation report required by Trench and SITW in
relation to the Company, its assets and the Equity Interest and such other
matters as each of Trench and SITW considers relevant prepared by valuers
approved by SITW and Trench.



 






 







	 	(h)	 	“State Asset Administration Bureau” means the State Asset Administration
Bureau which approval is required for the Transfer by the Transferor of State
owned assets.
	 
	 	(i)	 	“Transfer Equity Interest” means:
	 
	 	(i)	 	in relation to SITW, 33% of the Total Equity Interest;
	 
	 	(ii)	 	in relation to Trench Canada, 14.6% of the Total Equity Interest.
	 
	 	(j)	 	“Total Equity Interest” means the whole of the equity in the Company which
includes registered capital of the Company as described in Recital C as the
“Total”.
	 
	 	(k)	 	“Transfer” means the transfer of registered capital referred to in Recital D.
	 
	 	(l)	 	“Valuation Documents” means the documents specified in Article 5.3.




	 	 	 	Wherever in this Agreement the approval, acceptance, consent, satisfaction,
sanction, agreement, determination or authorisation of Trench or SITW is
required, such approval, acceptance, consent, satisfaction, sanction,
agreement, determination or authorisation may be given or withheld or be made
subject to such conditions as SITW or Trench determine in their absolute and
unfettered discretion.




	 	2.	 	CONDITIONS PRECEDENT AND DUE DILIGENCE
	 
	 	2.1	 	
(a)  This Equity Transfer Agreement is subject to and conditional upon the
approval of the State Asset Administration Bureau to the Transfer and of the
Valuation Documents and, if required by SITW, the approval of the State Asset
Administration Bureau of the SITW Valuation (as evidenced by a certificate of
approval) , which approvals and certificate must be in form and substance
acceptable to Trench and SITW (“Precondition”).
	 
	 	(a)	 	The Transferor shall use its best efforts to procure the fulfillment of the
Precondition as soon as possible. If the Precondition is not fulfilled by 15
November 2002, or such later date agreed by Trench and SITW, either or both
Trench and/or SITW may terminate this Equity Transfer Agreement and the Related
Agreements, by giving written notice to the other parties and the parties shall
have no further obligations hereunder or thereunder except for obligations that
expressly survive the termination hereof.
	 
	 	(b)	 	Notwithstanding the provisions of Articles 5.1 and 5.2, the Transferor shall
not submit any Approval Documents for Approval until after the Precondition is
fulfilled to the satisfaction of



 






 







	 	 	 	Trench and SITW and after Trench and SITW give their written consent to the
Approval Documents pursuant to Article 5.6.
	 
	 	2.2	 	
The obligations of Trench and SITW under this Equity Transfer Agreement and the
Related Agreements are subject to and conditional upon:
	 
	 	(a)	 	The satisfactory completion of the Due Diligence to the satisfaction of both
Trench and SITW.
	 
	 	(b)	 	To the extent required by Trench or SITW, review and approval (in their
absolute and unfettered discretion) of the Approval Documents, the Related
Agreements and the Fushun Court Approval by the shareholders and directors of
Trench and SITW.
	 
	 	(c)	 	Delivery by the Transferor to the Transferee of evidence in form and substance
satisfactory to the Transferee that at the Closing Date, the Transferor’s
representations set out in Article 9.1 and the Legal Representative’s
undertaking, representations and warranties referred to in paragraph (l) below,
are true, complete, accurate and not misleading.
	 
	 	(d)	 	The issuance of the Approval on terms and conditions and in form and substance
satisfactory to Trench and SITW.
	 
	 	(e)	 	Save for those which Trench and SITW agree may continue, settlement of all
debts and release of all encumbrances and other liabilities of the Company (at
the Transferor’s cost) to the satisfaction of Trench and SITW.
	 
	 	(f)	 	All Related Agreements being fully and duly executed by all parties and all
legal formalities related hereto have been completed in form and substance
satisfactory to Trench and SITW;
	 
	 	(g)	 	Trench and SITW are satisfied that there has been no breach of this Agreement
or of the Related Agreements by the Transferor;
	 
	 	(h)	 	The employee releases referred to in Article 6.1 are executed by the employees
and delivered to the Transferee, in form and substance acceptable to Trench and
SITW;
	 
	 	(i)	 	The written confirmation relating to labor issues referred to in Article 6.4
has been issued, in form and substance acceptable to Trench and SITW;
	 
	 	(j)	 	Copies of the documents referred to in Article 7.2 have been delivered to the
Transferee, in form and substance acceptable to Trench and SITW (the original
documents and items referred to in Article 7.2 shall be delivered to the
Transferee or the Transferee’s nominees at Closing) ;



 






 







	 	(k)	 	The conditions in Article 7.3 have been fulfilled to the satisfaction of SITW
and Trench;
	 
	 	(l)	 	Delivery to Trench and SITW, duly executed, the undertaking and representations
and warranties of the Company’s legal representative in form attached to this
Equity Transfer Agreement as Annexure C, or in such other form and substance
acceptable to SITW and Trench; and
	 
	 	(m)	 	The issue of such other approvals, certificates and registrations from Approval
Authorities as Trench and SITW determine is necessary to give full legal effect
to the unconditional Transfer of the Transfer Equity Interest free from all
Encumbrances (as defined in Article 7.4).
	 
	 	2.3	 	
Each Condition Precedent is for the benefit of Trench and of SITW and may be
waived by both Trench and SITW collectively giving notice in writing to the
Transferor.
	 
	 	2.4	 	
If the Conditions Precedent are not fulfilled or waived by 15 November 2002,
Trench and SITW may, but are not obliged, to extend the relevant dates.
	 
	 	2.5	 	
The Transferor shall cooperate and assist the Transferee and their professional
advisors and representatives with the Due Diligence and produce such documents
and materials requested by the Transferee and their professional advisors and
representatives.
	 
	 	2.6	 	
If, in Trench’s or SITW’s opinion, the Conditions Precedent are not fulfilled
to their satisfaction by 15 November 2002 or any later date agreed by Trench
and SITW under Article 2.4, either or both Trench and/or SITW may terminate
this Equity Transfer Agreement and the Related Agreements, by giving written
notice to the other parties and the parties shall have no further obligations
hereunder or thereunder except for obligations that expressly survive the
termination hereof.
	 
	 	2.7	 	
Upon termination of this Agreement under Article 2.6, the Transferor shall
immediately withdraw the Approval Documents filed with the Approval Authority,
procure that no Approval is issued for any of the Approval Documents, and
cancel the Related Agreements, other than those Related Agreements which were
in force prior to the signing of this Equity Transfer Agreement.
	 
	 	2.8	 	
SITW shall deliver to the Transferor a copy of its business licence chopped by
the relevant State Administration of Industry and Commerce and a bank letter
confirming the creditworthiness of SITW .
	 
	 	2.9	 	
Trench Canada shall deliver to Transferor a copy of its certificate of
incorporation and a bank letter confirming the creditworthiness of Trench .
	 
	 	3.	 	TRANSFER OF EQUITY INTEREST



 






 







	 	3.1	 	
The Transferor hereby agrees to transfer to Trench Canada, and, subject to the
fulfillment of the Conditions Precedent, Trench Canada hereby agrees to
purchase fourteen point six percent (14.6%) of the Total Equity Interest
together with all rights and obligations related thereto subject to the terms
and conditions set forth in this Agreement.
	 
	 	3.2	 	
The Transferor hereby agrees to transfer to SITW, and, subject to the
fulfillment of the Conditions Precedent, SITW hereby agrees to purchase thirty
three percent (33%) of the Total Equity Interest together with all rights and
obligations related thereto subject to the terms and conditions set forth in
this Agreement.
	 
	 	3.3	 	
The change of ownership of the Equity Interest after the transfer of the
Transfer Equity Interest contemplated herein is outlined in the After Transfer
Column of Schedule One hereof.
	 
	 	4.	 	PURCHASE PRICE
	 
	 	4.1	 	
The Purchase Price for the Transfer Equity Interest (“Purchase Price”) shall be
Twenty Million Six Hundred Thirty Three Thousand and Sixty Four point Five Two
Renminbi (RMB20,633,064.52), of which:
	 
	 	(a)	 	Trench Canada shall pay to the Transferor Six Million Three Hundred Twenty
Eight Thousand Six Hundred Twenty Nine point zero Three Renminbi
(RMB6,328,629.03); and
	 
	 	(b)	 	SITW shall pay to Transferor Fourteen Million Three Hundred Four Thousand Four
Hundred and Thirty Five point Four Nine Renminbi (RMB14,304,435.49).
	 
	 	(c)	 	Trench Canada and SITW shall be severally and not jointly liable to the
Transferor for the payment of their respective apportionment of the Purchase
Price described in Article 4.1 under the terms and conditions of this
Agreement. This Agreement does not create any joint liability of Trench Canada
and SITW for payment of the whole Purchase Price. This Agreement does not
create any liability of Trench UK for payment of the whole or any part of the
Purchase Price.
	 
	 	4.2	 	
Dividend distributions made on or after the Closing Date shall be in proportion
to each parties’ respective ownership of the registered capital in the Company
as outlined in the “After Transfer” column of Schedule One, notwithstanding
that for part of the year the Transferor’s proportion of ownership of
registered capital was 49.6%. The Transferor acknowledges that appropriate
adjustments have been made to the Purchase Price and, in relation to any
declaration of dividend made on or after the Closing Date, the Transferor
waives and shall not make any claims or be entitled to any distribution of
dividend in excess of its proportion of ownership of the registered capital as
shown in the “After Transfer” column of Schedule One, namely 2%, regardless
whether or not the dividend declared relates to profits of the Company accrued
or earned prior to the Closing Date.



 






 







	 	 	 	Providing that all of the Conditions Precedent are fulfilled to SITW’s and
Trench’s satisfaction, the Purchase Price shall not be changed by reason of any
change in the value of the Company.
	 
	 	4.3	 	
All payments to be made by Trench Canada shall be made in US dollars or such
other foreign currency as Trench determines. The foreign exchange rate
applicable to the conversion of Renminbi to any foreign currency or vice versa,
shall be the official rate published by the People’s Bank of China five (5)
banking days before the date on which payment is due.
	 
	 	4.4	 	
All payments of the Purchase Price shall be to the extent required by Trench
and SITW made in accordance with the Fushun Court Approval.
	 
	 	5.	 	APPROVAL OF TRANSFER
	 
	 	5.1	 	
Subject to fulfillment of the Precondition in accordance with Article 2.1, the
Transferor shall procure that the Company shall, and the Company hereby agrees,
within five (5) Business Days of the date on which Trench and SITW give their
written consent to the Approval Documents under Article 5.6, to submit the
following documents and such other documents as may be required by the laws of
the People’s Republic of China to the Approval Authority for Approval including
but not limited to:
	 
	 	(a)	 	this Equity Transfer Agreement;
	 
	 	(b)	 	an application for Approval of the Transfer;
	 
	 	(c)	 	the Revised Articles of Association;
	 
	 	(d)	 	the Revised Joint Venture Contract;
	 
	 	(e)	 	the Original Articles of Association;
	 
	 	(f)	 	the Original Joint Venture Contract;
	 
	 	(g)	 	the original approval certificate relating to the establishment of the Company
(if required);
	 
	 	(h)	 	the current approval certificate and business license of the Company;
	 
	 	(i)	 	resolutions of the Board approving Transfer in accordance with the terms and
conditions of this Agreement;



 






 







	 	(j)	 	a list of the proposed members of the Board following the Transfer of the
Transfer Equity Interest, including the Legal Representative, Chairman and Vice
Chairman of the Company;
	 
	 	(k)	 	such necessary documents to give effect to the change to the members of the
Board, the Legal Representative, Chairman and Vice Chairman;
	 
	 	(l)	 	application to change the name of the Company from “Fushun Reyrolle Bushing Co
Ltd” to “Trench Fushun Bushing Co Ltd” or such other name determined by the
board of the Company;
	 
	 	(m)	 	Valuation Documents and, if required by SITW, the SITW Valuation;
	 
	 	(n)	 	other documents required by the Approval Authority.
	 
	 	5.2	 	
Subject to fulfillment of the Precondition in accordance with Article 2.1 and
the written consent of Trench and SITW to the Approval Documents under Article
5.6, the Transferor shall promptly file the Approval Documents and deal with
the Approval Authority on behalf the Company in order to obtain the Approval
and use reasonable endeavours to obtain the Approval. The Transferor shall
notify the Transferee of all material correspondence from the Approval
Authority in relation to the Approval.
	 
	 	5.3	 	
Promptly after signing this Equity Transfer Agreement, the Transferor shall
obtain and submit to the State Asset Administration Bureau and the Approval
Authority for Approval:
	 
	 	(a)	 	an opinion issued by the government department in charge of the Transferor and,
if required;
	 
	 	(b)	 	an assets valuation report issued by a state-owned assets valuation institution
in respect of the Transfer of the Transfer Equity Interest;
	 
	 	(c)	 	a letter of confirmation issued by the competent local branch of the
state-owned assets administration authority in respect of the valuation report
mentioned in paragraph (b) of this Article 5.3; and
	 
	 	(d)	 	if required by SITW, the SITW Valuation.
	 
	 	5.4	 	
As soon as practicable following receipt of the Trench and SITW written
approval referred to in Article 5.6, the Transferor shall cause the Company to
apply to the FAIC to change its business registration to reflect the change of
ownership of the Company after the Transfer and the change of Company name, and
to do all such necessary things associated with that change of ownership



 






 







	 	 	 	and change of the Company name, including but not limited to the change of tax,
custom and foreign exchange registrations.
	 
	 	5.5	 	
Immediately after receipt of the Trench and SITW written approval referred to
in Article 5.6, the Transferor shall do all things necessary to obtain the
Fushun Court Approval.
	 
	 	5.6	 	
Notwithstanding any of the foregoing provisions, before the Transferor submits
any of the Approval Documents to any authority or body for approval (including,
without limited, the Approval Authority, the Fushun Court and the FAIC), the
Transferor must first submit the Approval Documents to Trench and SITW for
their prior written approval.
	 
	 	6.	 	EMPLOYEES
	 
	 	6.1	 	
The Transferor shall do all things necessary to terminate the employment of the
employees listed in Schedule Two including obtaining releases, in form and
substance acceptable to Trench and SITW, from those employees for severance pay
and any other liability pertaining to the employee’s employment with the
Transferor or his or her provision of services to the Company. Such
termination shall take effect on the Closing Date. The Company shall employ
the Employees on substantially the same terms as the terms of employment in
force immediately prior to Closing.
	 
	 	6.2	 	
Any liability or obligation to or in respect of any employees or former
employees of Transferor which shall have been asserted prior to or at the
Closing Date or is based on acts or omissions which occurred prior to the
Closing Date including, without limitation:
	 
	 	(a)	 	any employment agreement, whether or not written, between the Transferor and
any person;
	 
	 	(b)	 	any liability under any employee benefit plan at any time maintained by the
Transferor or the Chinese local or central government, contributed to or
required to be contributed to by or with respect to Transferor or under which
the Transferor may incur liability, or any contributions, benefits or
liabilities therefore, including without limitation, any pension fund,
unemployment insurance, accident and disability insurance, medical insurance,
housing and heating benefits; and
	 
	 	(c)	 	any claim of an unfair labor practice, or any claim under any unemployment
compensation or worker’s compensation law or regulation or under any employment
discrimination law or regulation,
	 
	 	 	 	shall remain the liability of the Transferor after Closing and shall not be
assumed by the Company.



 






 







	 	6.3	 	
The Transferor fully indemnifies and shall keep indemnified the Company, SITW
and Trench (“Indemnified Parties”) against all losses and liabilities incurred
by the Indemnified Parties arising directly or indirectly as a result of or in
connection with the matters raised in Article 6.2.
	 
	 	6.4	 	
If Trench and/or SITW determine at any time that any authority has a claim or
may have a right to claim or has or may make a claim of any nature against the
Company in connection with the matters referred to in Article 6.2 then trench
and/or SITW shall notify the Transferor of this fact and the Transferor shall
immediately thereafter obtain from all relevant government authorities written
confirmation and undertakings that those authorities shall not make any claim
against the Company for any of the matters referred to in Article 6.2.
	 
	 	7.	 	CLOSING
	 
	 	7.1	 	
Closing shall take place on the Closing Date at the office of the Trench’s
solicitors, Altheimer & Gray, Shanghai Office, unless, in order to give full
legal effect to the unconditional Transfer of the Transfer Equity Interest
unencumbered to the Transferees, Closing is required by PRC laws and
regulations to take place in a prescribed location or institution, whereupon
Closing shall take place at such prescribed location or institution.
	 
	 	7.2	 	
At Closing the Transferor must deliver to the Transferee or the Transferee’s
nominees:
	 
	 	(a)	 	Evidence of the Approval, in form and substance acceptable to Trench and SITW;
	 
	 	(b)	 	The Approval Documents, in form and substance acceptable to Trench and SITW.
	 
	 	(c)	 	The Company seal;
	 
	 	(d)	 	all seals, minute books, statutory books and registers, books of account,
trading and financial records, copies of taxation returns and other documents
and papers of the Company;
	 
	 	(e)	 	authorities directed to the Company’s bankers authorising the operation of each
of the Company’s bank accounts only by the Transferee’s nominees; and
	 
	 	(f)	 	instruments in a form approved by the Transferee’s solicitors executed under
seal by the Transferor releasing the Company from all claims of any kind which
the Transferor may have against the Company, other than for day to day trading
debts for good and services provided by the Transferor to the Company as shown
on the trading accounts of the Company.
	 
	 	7.3	 	
At Closing the Transferor must procure:



 






 







	 	(a)	 	appointment to the Board of the persons nominated by the Transferee and
resignations from the Board of those of the present directors whom the
Transferee requests to resign, and in the case of each director resigning an
acknowledgment in such form as the Transferee may require that he or she has no
claim of any nature against the Company for salary, fees, compensation for loss
of office or otherwise; and
	 
	 	(b)	 	delivery into the control of the Transferee of all keys and codes of whatever
nature required to enter or gain access to any property of the Company and
without limitation including all keys and combinations required to unlock each
safe deposit box at a bank, cupboards, safes, storage rooms, filing cabinets
and desk drawers, and all keys and codes necessary to gain access to computer
programs.
	 
	 	7.4	 	
Subject to the fulfillment of the Conditions Precedent and providing that both
Trench and SITW are satisfied in their absolute discretion that as at the
Closing Date, the Equity Interest is free from all claims, security interests,
liens, pledges, charges, escrows, options, proxies, rights of first refusal,
preemptive rights, mortgages, title retention agreements, indentures, security
agreements of any kind or any other encumbrances (“Encumbrances”), Trench
Canada shall at the Closing on the Closing Date:
	 
	 	(a)	 	pay the portion of Purchase Price, as provided in Article 4.1(a) in accordance
with such court orders or directions, including the Fushun Court Approval, as
are required to ensure that the relevant portion of the Transfer Equity
Interest is transferred to Trench Canada free from all Encumbrances; and
	 
	 	(b)	 	if it has not done so before, produce consents in writing of Trench nominees
for appointment as directors of the Company.
	 
	 	7.5	 	
Subject to the fulfillment of the Conditions Precedent and providing that both
Trench and SITW are satisfied in their absolute discretion that as at the
Closing Date, the Equity Interest is free from all Encumbrances, SITW shall at
the Closing on the Closing Date:
	 
	 	(a)	 	pay the portion of Purchase Price, as provided in Article 4.1(b) in accordance
with such court orders or directions, including the Fushun Court Approval, as
are required to ensure that the relevant portion of the Transfer Equity
Interest is transferred to SITW free from all Encumbrances; and
	 
	 	(b)	 	if it has not done so before, produce consents in writing of SITW’s nominees
for appointment as directors and if it desires, Vice Chairman of the Company.
	 
	 	7.6	 	
After payment of the Purchase Price as specified in Article 7.4 and 7.5 and
subject as provided by Chinese law the transfer of the Transfer Equity Interest
shall be fully effective.



 






 







	 	8.	 	Release of Transferor’s Securities
	 
	 	8.1	 	
If required by the Company’s principle bankers, the parties shall co-operate in
using all reasonable endeavours to arrange for the release and discharge on the
Closing Date of any securities or guarantees given by the Transferor in
relation to the Company’s debts (Transferor’s Securities”). If reasonably
required, SITW and Trench may elect to arrange the replacement of the
Transferor’s securities with a similar security or guarantee acceptable to the
Company’s principle bankers, provided that no Party shall be obliged to provide
any guarantee or security nor, without prejudice to the generality of the
foregoing, to guarantee a greater proportion of any borrowing than its
percentage holding of registered capital in the Company from time to time.
	 
	 	9.	 	REPRESENTATIONS AND WARRANTIES
	 
	 	9.1	 	
The Transferor hereby represents and warrants to each of SITW and Trench UK and
Trench Canada that:
	 
	 	(a)	 	the Transferor is the sole owner of the Transfer Equity Interest and has full
corporate power and authority and has taken all action necessary to enter into
this Agreement and perform its obligations thereunder;
	 
	 	(b)	 	the Transferor’s obligations under this Agreement are valid, binding and
enforceable against the Transferor in accordance with their terms; and
	 
	 	(c)	 	the Transferor has not created and has not agreed to create, and there do not
exist, any mortgage, pledge, lien, charge, right of first refusal, right of
preemption, order direction or award of any tribunal or court (other than the
Fushun Court Orders described in paragraphs (i) to (iv) of Article 1.1(r)) and
the preemptive rights described in Article 10) or any other form of encumbrance
or right of any third party over or in relation to the Equity Interest.
	 
	 	(d)	 	Save for the Fushun Court Orders described in paragraphs (i) to (iv) of Article
1.1(r) and the preemptive rights described in Article 10, there are no claims,
security interests, liens, pledges, charges, escrows, options, proxies, rights
of first refusal, preemptive rights, mortgages, title retention agreements,
indentures, security agreements of any kind or any other encumbrances to the
registered capital of the Company, including any Equity Interest, or against
the assets of the Company.
	 
	 	(e)	 	All information given by or on behalf of the Transferor and the Company to
Trench and SITW, their advisers or agents before or during the negotiations
leading to the Equity Transfer Agreement, Revised Articles of Association and
Revised Joint Venture Contract and any related agreements, as well as the
information set out in those documents, is true, complete, accurate and not
misleading.



 






 







	 	(f)	 	The Company has paid all taxes which it has become liable to pay and is not,
and has not been liable to pay a penalty, surcharge, fine or interest in
connection with any tax.
	 
	 	(g)	 	The assets owned, possessed or used by the Company comprise all the assets
required to enable the Company to carry on its business fully and effectively
in the ordinary course.
	 
	 	(h)	 	The Company has not released a debt shown in the Company accounts or its
accounting records so that the debtor has paid or will pay less than the debt’s
book value.
	 
	 	(i)	 	Save for matters giving rise to the Fushun Court Orders described in paragraphs
(i) to (iv) of Article 1.1(r) as disclosed in the Disclosure Schedule, the
Company has paid its creditors within the times agreed with them and no debt
owing by it has been due for more than ninety (90) consecutive days.
	 
	 	(j)	 	Except as disclosed in the Company accounts, the Company does not have
outstanding and has not agreed to create or incur loan capital, borrowing or
indebtedness in the nature of borrowing, including, without limitation, a bank
overdraft, a liability under an acceptance (other than a normal trade bill) or
acceptance credit.
	 
	 	(k)	 	At the date hereof the loan agreements, guarantees, securities and mortgages
and other encumbrances listed in the Schedule Three (Loans and Securities) are
the only Loans and Securities entered into by the Company which are outstanding
and the Transfer shall not constitute a breach of any term of any Loan or
Security and no approval of any third party creditor of the Company shall be
required by any provision of any agreement whatsoever.
	 
	 	(l)	 	Save as disclosed in the Disclosure Schedule, the Company is not in default of
any provision of any of the Loans and Securities and all payments have been
made in the due date for payment as settled in loan agreements.
	 
	 	10.	 	WAIVER OF PREEMPTIVE RIGHT OF PURCHASE
	 
	 	10.1	 	
Trench UK hereby irrevocably waives its preemptive right of purchase in respect
of the forty seven point six percent (47.6%) of the Total Equity Interest
contemplated to be transferred to be Transferee hereunder under the laws of the
PRC.
	 
	 	10.2	 	
The waiver under Article 10.1 above shall be valid until the earlier of the
following events occurs:
	 
	 	(a)	 	the Closing Date; or



 






 







	 	(b)	 	November 15, 2002.
	 
	 	11.	 	TAX LIABILITIES
	 
	 	11.1	 	
Unless the laws provide otherwise, the Transferor shall be responsible for, and
agrees to indemnify and save harmless the Transferee and the Company against,
any tax liability (including without limitation any income tax, business tax,
stamp duty or any other kind of taxes, fees, assessments or charges) which may
arise as a result of the payment of the Purchase Price by the Transferee
hereunder or otherwise as a result of the execution or performance of this
Agreement.
	 
	 	12.	 	INDEMNIFICATION
	 
	 	12.1	 	
The Transferor shall indemnify each of SITW and Trench Canada and Trench UK for
all damages incurred by each or both of them as a result of:
	 
	 	(a)	 	any inaccuracy in or breach of any representation and warranty made by the
Transferor to the Transferee herein; or
	 
	 	(b)	 	the breach by the Transferor of, or failure of the Transferor to comply with,
any of its covenants or obligations under this Agreement.
	 
	 	12.2	 	
SITW shall indemnify each of Transferor and Trench for all damages incurred by
each or both of them as a result of:
	 
	 	(a)	 	any inaccuracy in or breach of any representation and warranty made by SITW to
the Transferor and Trench herein; or
	 
	 	(b)	 	subject to fulfillment of the Conditions Precedent, the breach by SITW of, or
failure of SITW to comply with, any of its covenants or obligations under this
Agreement.
	 
	 	12.3	 	
Trench shall indemnify each of Transferor and SITW for all damages incurred by
each or both of them as a result of:
	 
	 	(a)	 	any inaccuracy in or breach of any representation and warranty made by Trench
to the Transferor and SITW herein; or
	 
	 	(b)	 	subject to fulfillment of the Conditions Precedent, the breach by Trench of, or
failure of Trench to comply with, any of its covenants or obligations under
this Agreement.



 






 







	 	13.	 	NON-COMPETITION
	 
	 	13.1	 	
The Transferor hereby covenants and agrees that from and after the date of this
Agreement and continuing for a period of five (5) years from the Closing Date,
neither the Transferor nor any of its affiliates, parent or subsidiaries shall
do any one or more of the following (except holding 2% shares of the Company),
directly or indirectly:
	 
	 	(a)	 	engage or participate, anywhere in the PRC, as an owner, partner, shareholder
or consultant or (without limitation) otherwise in any business which is in
competition, directly or indirectly, with any business or activity of the
Company, as conducted on the Closing Date;
	 
	 	(b)	 	solicit any customers of the Company which has been a customer of the Company
or its affiliates within the past three (3) years; or
	 
	 	(c)	 	take any actions which are calculated to persuade any salaried, technical or
professional employees, representatives or agents of the Company to terminate
their association with the Company.
	 
	 	14.	 	CONFIDENTIALITY
	 
	 	14.1	 	
The Transferor hereby covenants and agrees for the longest period permitted by
law of PRC following the Closing Date, that the Transferor shall, and shall
cause its affiliates, directors, officers, employees and agents to, hold in
strictest confidence, and not, without the prior written approval of the
Transferee, use for its own benefit or the benefit of any party other than the
Transferee or disclose to any third person (other than as required by law) any
information of any kind relating to the Transferee’s and the Company’s
respective businesses, customers, financials or other affairs.
	 
	 	15.	 	GOVERNING LAW AND DISPUTE RESOLUTION
	 
	 	15.1	 	
Governing Law
	 
	 	 	 	This Agreement shall be governed by and construed in accordance with the laws
of the People’s Republic of China.
	 
	 	15.2	 	
Choice of Arbitration
	 
	 	 	 	If any dispute arises under or relating to this Agreement, including with
respect to the interpretation or implementation of this Agreement, relating to
performance or termination under this Agreement or relating to any matter
contemplated by this Agreement, including liquidation of the Company, the
Parties shall first attempt to resolve such dispute through friendly
discussions.



 






 







	 	 	 	If the dispute cannot be resolved in this manner to the satisfaction of
the Parties within sixty (60) days after the date that any Party has notified
the other Parties in writing of such dispute, the Parties, as the sole manner
to resolve the dispute, shall submit the dispute to arbitration in the
Singapore International Arbitration Center (“Center”), in accordance with the
applicable arbitration rules of the United Nations Commission on the
International Trade Law in which case:
	 
	 	(a)	 	The basis of the arbitration shall be both the English text and the Chinese
text of this Agreement, unless the Parties agree that a single text be used;
	 
	 	(b)	 	There shall be three (3) arbitrators, all of whom shall be fluent in English.
SITW and Trench shall each appoint one (1) arbitrator who shall select the
third arbitrator, who shall serve as chairman of the panel (and who shall not
be a national of the domicile of either of the Parties to this Agreement). If
the first two (2) arbitrators cannot agree on a third arbitrator within fifteen
(15) business days after their appointment, the third arbitrator shall be
appointed by the Center and shall serve as chairman of the panel.
	 
	 	15.3	 	
Proceedings in English and Chinese
	 
	 	 	 	All proceedings (including documentation) in any such arbitration shall be
conducted in Chinese and English and a daily transcript in Chinese and English
of such proceedings shall be prepared unless the Parties agree otherwise.
	 
	 	15.4	 	
Award Final and Binding
	 
	 	 	 	The arbitration award shall be final and binding on the Parties, and the
Parties agree to be bound thereby and shall act accordingly.
	 
	 	15.5	 	
Cost of Arbitration
	 
	 	 	 	The costs of arbitration shall be borne by the losing party, unless otherwise
determined by the arbitration body.
	 
	 	15.6	 	
Enforcement
	 
	 	 	 	If either Party fails to observe the terms of an arbitration award, the other
Party may apply to have the award enforced in accordance with the New York
Convention on the Recognition and Enforcement of Foreign Arbitral Awards in any
court having jurisdiction over the Party against which the award has been
rendered, in which event any Party obtaining a court order of enforcement shall
be entitled to reimbursement by the other Parties of all costs and expenses
(including reasonable attorneys’ fees) incurred by it in connection with the
obtaining of such enforcement order.
	 
	 	15.7	 	
Waiver of Sovereign Immunity, etc.



 






 







	 	 	 	In any arbitration proceeding, or any legal proceeding to enforce any award
resulting from an arbitration proceeding, each party expressly waives any
defense of sovereign immunity and any other defense or exemption from suit,
judgment or execution based on the fact or allegation that it is a party,
agency or instrumentality of or otherwise represents a government or
governmental or public body.
	 
	 	15.8	 	
Continued Performance
	 
	 	 	 	During the period when a dispute is being resolved, the Parties shall in all
other respects continue their implementation of this Agreement.
	 
	 	16.	 	MISCELLANEOUS
	 
	 	16.1	 	
Recitals. The Recitals to this Agreement form an integral part thereof.
	 
	 	16.2	 	
Language. Originals of this Agreement shall be prepared in Chinese and English
with each language version having equal legal effect.
	 
	 	16.3	 	
Originals. This Agreement shall be executed in six (6) Chinese originals and
six (6) English originals. Each party to this Agreement shall keep a Chinese
original and an English original. There shall be filed with the Approval
Authority a Chinese original and an English original under Article 5 hereof.
	 
	 	16.4	 	
Assignment. This Agreement shall not be assignable by any of the Parties hereto
without the prior written consent of the other parties.
	 
	 	16.5	 	
Amendment. No change, modification or amendment of the Agreement shall be
valid or binding on the Parties unless such change, modification or amendment
shall be in writing signed by all parties.
	 
	 	16.6	 	
Continuing Effect of Agreement. Except to the extent that they have been
performed and except where this Agreement provides otherwise, the obligations
contained in this Agreement remain in force after the Closing under Article 7.
	 
	 	16.7	 	
No Waiver. The failure of any party to insist on strict performance of a
covenant hereunder or of any obligation hereunder shall not be a waiver of such
party’s right to demand strict compliance therewith in the future, nor shall
the same be construed as a novation of this Agreement.
	 
	 	16.8	 	
Severability. In the event any provision, clause, sentence, phrase, or word
hereof, or the application thereof in any circumstances, is held to be invalid
or unenforceable, such invalidity or



 






 







	 	 	 	unenforceability shall not affect the validity or enforceability of the
remainder hereof, or of the application of any such provision, sentence,
clause, phrase, or word in any other circumstances.
	 
	 	16.9	 	
Entire Agreement. This Agreement constitutes the entire agreement and
understanding among the Parties in respect of the subject matter hereof and
supersedes all prior discussions, negotiations and agreements among them.
	 
	 	16.10	 	
Further Assurances. Each party hereto agrees to do all acts and things and to
make, execute and deliver such written documents and instruments, as shall from
time to time be reasonably required to carry out the terms and provisions of
this Agreement.
	 
	 	16.11	 	
Counterparts. This Agreement may be executed in separate counterparts, each of
which is deemed to be an original and all of which taken together constitute
one and the same agreement.




	 	 	 	IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed by
their duly authorized representatives in Shanghai as of the day and year first
above written.




	 	 	 
	Fushun Electric Porcelain Works	 	
Trench (UK) Limited
	 	 	 
	 	 	 
	/s/ Ye Li Mao	 	/s/ John Finlay
	
	 	


	By: Ye Li Mao	 	By: John Finlay

	 	 	 
	Title: Director	 	
Title: Director



 






 




	 	 	 
	Trench Limited	
Shanghai Instrument Transformer Works
	 	 	 
	 	 	 
	/s/ John Finlay	 	/s/ Zhang Wei Guo
	
	 	


	By: John Finlay	 	
By: Zhang Wei Guo
	 	 	 
	Title: Director	 	
Title: Director




#




SCHEDULE ONE



TRANSFER OF EQUITY INTEREST




	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Before Transfer	 	After Transfer
	 	 	
	 	

	 	 	Shareholding	 	Registered Capital	 	Shareholding	 	Registered Capital
	Party	 	Percentage (%)	 	Amount (RMB)	 	Percentage (%)	 	(RMB)
	
	 	
	 	
	 	
	 	

	Transferor
	 	 	49.6	 	 	 	16,727,000	 	 	 	2	 	 	 	674,480	 
	Trench UK
	 	 	50.4	 	 	 	16,997,000	 	 	 	50.4	 	 	 	16,997,000	 
	Trench Canada
	 	 	0	 	 	 	0	 	 	 	14.6	 	 	 	4,923,600	 
	SITW
	 	 	0	 	 	 	0	 	 	 	33	 	 	 	11,128,920	 
	Total
	 	 	100	 	 	 	33,724,000	 	 	 	100	 	 	 	33,724,000	 
	 	 	 	
	 	 	 	
	 	 	 	
	 	 	 	
	 



 






 



SCHEDULE TWO



EMPLOYEES



 



SCHEDULE THREE



LOANS AND SECURITIES



 



ANNEXURE A



REVISED ARTICLES OF ASSOCIATION



 



ANNEXURE B



REVISED JOINT VENTURE CONTRACT



 



ANNEXURE C



LEGAL REPRESENTATIVE’S UNDERTAKING AND GUARANTEE



TO:



Trench (UK) Limited

South Drive

Hebburn, Tyne & Wear NE31 1UW


 






 





Trench Limited

71 Maybrook Drive

Scarborough, Ontario

Canada M1V 4B6


Shanghai Instrument Transformer Works

427 Jumen Road

Shanghai

PRC


Fushun Reyrolle Bushing Co., Limited

Economic Development Area

Fushun, Liaoning Province,

PRC


26th September 2002


Dear Sirs



PERSONAL UNDERTAKING



	 	 	 	Re: Fushun Reyrolle Bushing Co., Limited (“Company”) and Fushun Electric
Porcelain Works (“FEPW”)




	 	 	 	I hereby in my personal capacity confirm, warrant and represent as follows:
	 
	 	1.	 	I am the Legal Representative of the Company and Chairman of the Board of the
Company and as such have authority to bind the Company and I am in the best
position to know of Company matters
	 
	 	2.	 	FEPW is the registered holder and beneficial owner of the Transfer Equity
Interest and have power to transfer title to the Transfer Equity Interest,
subject to the release of the Fushun Court Orders described in paragraphs (i)
to (iv) of Article 1.1(r) of the Equity Transfer Agreement.
	 
	 	3.	 	Save as specifically disclosed in the Disclosure Schedule, there are no claims,
security interests, liens, pledges, charges, escrows, options, proxies, rights
of first refusal, preemptive rights, mortgages, title retention agreements,
indentures, security agreements of any kind or any other encumbrances to the
registered capital of the Company, including any Equity Interest, or against
the assets of the Company.
	 
	 	4.	 	All information given by or on behalf of and the Company to Trench and SITW,
their advisers or agents before or during the negotiations leading to the
Equity Transfer Agreement, Revised Articles of Association and Revised Joint
Venture Contract and any related agreements, as well as the information set out
in those documents, is true, complete, accurate and not misleading.



 






 







	 	5.	 	The Company has paid all taxes which it has become liable to pay and is not,
and has not been liable to pay a penalty, surcharge, fine or interest in
connection with any tax.
	 
	 	6.	 	The assets owned, possessed or used by the Company comprise all the assets
required to enable the Company to carry on its business fully and effectively
in the ordinary course.
	 
	 	7.	 	The Company has not released a debt shown in the Company accounts or its
accounting records so that the debtor has paid or will pay less than the debt’s
book value.
	 
	 	8.	 	Save as disclosed in the Disclosure Schedule, the Company has paid its
creditors within the times agreed with them and no debt owing by it has been
due for more than [ninety (90)] consecutive days.
	 
	 	9.	 	Except as disclosed in the Company accounts, the Company does not have
outstanding and has not agreed to create or incur loan capital, borrowing or
indebtedness in the nature of borrowing, including, without limitation, a bank
overdraft, a liability under an acceptance (other than a normal trade bill) or
acceptance credit.
	 
	 	10.	 	At the date hereof the loan agreements, guarantees, securities and mortgages
and other encumbrances listed in the Disclosure Schedule (Loans and Securities)
are the only Loans and Securities entered into by the Company which are
outstanding.
	 
	 	11.	 	Save as disclosed in the Disclosure Schedule, the Company is not in default of
any provision of any of the Loans and Securities and all payments have been
made in the due date for payment as settled in loan agreements.
	 
	 	12.	 	Other than disclosed in the Disclosure Schedule:
	 
	 	(a)	 	neither the Company nor a person for whose acts or defaults the Company may be
vicariously liable is involved, or has during the two (2) years ending on the
date of this letter been involved, in a civil, criminal, arbitration,
administrative or other proceeding in any jurisdiction;
	 
	 	(b)	 	no civil, criminal, arbitration, administrative or other proceeding in any
jurisdiction is pending or threatened by or against the Company or a person for
whose acts or defaults the Company may be vicariously liable.
	 
	 	 	 	Each of the warranties and representations given above are made to each of
Trench (UK) Limited, Trench Limited and SITW.
	 
	 	 	 	Defined terms used in this letter have the meanings given them in the Equity
Transfer Agreement.



 






 







	 	 	 	The confirmation, warranties and representations given in this letter applies
at the date of this letter, the date of execution of the Equity Transfer
Agreement and the Closing Date.
	 
	 	 	 	I fully indemnify and shall keep indemnified the Company, SITW and Trench
(“Indemnified Parties”) against all losses and liabilities incurred by the
Indemnified Parties arising directly or indirectly as a result of or in
connection with any breach of the warranties and representations set out in
this letter.
	 
	 	 	 	Yours faithfully
	 
	 	 	 	Ye Li Mao



DISCLOSURE SCHEDULE




	 	1.	 	Fushun Court Orders described in paragraphs (i) to (iv) or Article 1.1(r) of
the Equity Transfer Agreement, being the following property preservation orders
issued by the Fushun City Intermediate Court:
	 
	 	(a)	 	Against the FEPW’s equity holdings in the Company in favour of the Fushun City
Social Security Insurance General Corporation issued on 11 April 2002;
	 
	 	(b)	 	Against the FEPW’s equity holdings in the Company and debts in favour of the
Fushun City Housing Fund Administrative Bureau issued on 18 July 2002;
	 
	 	(c)	 	Against the FEPW’s equity holdings in the Company and its deposits or assets in
favour of the Bank of China Fushun Branch issued on 30 August 2002; and
	 
	 	(d)	 	the enforcement assistance order issued to the Company in relation to the
property preservation order described in paragraph (iii) dated 2 September
2002.
	 
	 	1.	 	Statutory preemptive rights of Trench (UK) Limited