Document:

Exhibit 10.18

Conformed
Copy

25
April 2001

 

INDALEX,
INC.

INDALEX
UK LIMITED

GLOBAL
APPLIED TECHNOLOGIES HOLDINGS LIMITED

 

AGREEMENT

for the sale and purchase of

26.2 per cent. of the share capital of

China Aluminum Group

Holdings (BVI) Limited

 

	
  

  	
    FRESHFIELDS BRUCKHAUS DERINGER

  

(English
Translation)

 

CONTENTS

	
  Clause

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  
	
  1.

  	
  DEFINITIONS AND INTERPRETATION

  	
   

  	
  1

  
	
   

  	
   

  	
   

  	
   

  
	
  2.

  	
  SALE OF THE SHARES AND PRICE

  	
   

  	
  1

  
	
   

  	
   

  	
   

  	
   

  
	
  3.

  	
  CONDITIONS PRECEDENT

  	
   

  	
  2

  
	
   

  	
   

  	
   

  	
   

  
	
  4.

  	
  PRE-COMPLETION UNDERTAKINGS

  	
   

  	
  3

  
	
   

  	
   

  	
   

  	
   

  
	
  5.

  	
  COMPLETION

  	
   

  	
  5

  
	
   

  	
   

  	
   

  	
   

  
	
  6.

  	
  ADJUSTMENT ACCOUNTS

  	
   

  	
  8

  
	
   

  	
   

  	
   

  	
   

  
	
  7.

  	
  INITIAL PRICE ADJUSTMENT AND DEFERRED PAYMENT
  OBLIGATIONS

  	
   

  	
  10

  
	
   

  	
   

  	
   

  	
   

  
	
  8.

  	
  NON-COMPETITION RESTRICTIONS

  	
   

  	
  12

  
	
   

  	
   

  	
   

  	
   

  
	
  9.

  	
  WARRANTIES AND UNDERTAKINGS

  	
   

  	
  13

  
	
   

  	
   

  	
   

  	
   

  
	
  10.

  	
  LIMITATIONS ON CLAIMS

  	
   

  	
  14

  
	
   

  	
   

  	
   

  	
   

  
	
  11.

  	
  PURCHASER’S RIGHTS TO TERMINATE

  	
   

  	
  16

  
	
   

  	
   

  	
   

  	
   

  
	
  12.

  	
  WITHHOLDING TAX AND GROSSING UP

  	
   

  	
  16

  
	
   

  	
   

  	
   

  	
   

  
	
  13.

  	
  ENTIRE AGREEMENT

  	
   

  	
  16

  
	
   

  	
   

  	
   

  	
   

  
	
  14.

  	
  VARIATION

  	
   

  	
  17

  
	
   

  	
   

  	
   

  	
   

  
	
  15.

  	
  ASSIGNMENT

  	
   

  	
  17

  
	
   

  	
   

  	
   

  	
   

  
	
  16.

  	
  ANNOUNCEMENTS

  	
   

  	
  18

  
	
   

  	
   

  	
   

  	
   

  
	
  17.

  	
  COSTS

  	
   

  	
  19

  
	
   

  	
   

  	
   

  	
   

  
	
  18.

  	
  SEVERABILITY

  	
   

  	
  19

  
	
   

  	
   

  	
   

  	
   

  
	
  19.

  	
  COUNTERPARTS

  	
   

  	
  19

  
	
   

  	
   

  	
   

  	
   

  
	
  20.

  	
  PAYMENTS

  	
   

  	
  19

  
	
   

  	
   

  	
   

  	
   

  
	
  21.

  	
  WAIVERS, RIGHTS AND REMEDIES

  	
   

  	
  19

  
	
   

  	
   

  	
   

  	
   

  
	
  22.

  	
  FURTHER ASSURANCE

  	
   

  	
  20

  
	
   

  	
   

  	
   

  	
   

  
	
  23.

  	
  NOTICES

  	
   

  	
  20

  

 

 I
 

 

 

	
  24.

  	
  GOVERNING LAW AND JURISDICTION

  	
   

  	
  22

  
	
   

  	
   

  	
   

  	
   

  
	
  SCHEDULE 1

  	
   

  	
  24

  
	
  Definitions and
  Interpretation

  	
   

  	
  24

  
	
   

  	
   

  	
   

  	
   

  
	
  SCHEDULE 2

  	
   

  	
  33

  
	
  The Company And
  The Subsidiaries

  	
   

  	
  33

  
	
   

  	
   

  	
   

  	
   

  
	
  SCHEDULE 3

  	
   

  	
  46

  
	
  The Warranties

  	
   

  	
  46

  
	
   

  	
   

  	
   

  	
   

  
	
  SCHEDULE 4

  	
   

  	
  69

  
	
  The Core
  Agreements

  	
   

  	
  69

  
	
   

  	
   

  	
   

  	
   

  
	
  SCHEDULE 5

  	
   

  	
  70

  
	
  Adjustment
  Accounts

  	
   

  	
  70

  
	
   

  	
   

  	
   

  	
   

  
	
  SCHEDULE 6

  	
   

  	
  78

  
	
  The Leased
  Properties

  	
   

  	
  78

  
	
   

  	
   

  	
   

  	
   

  
	
  SCHEDULE 7

  	
   

  	
  82

  
	
  Amendments to
  the Articles

  	
   

  	
  82

  
	
   

  	
   

  	
   

  	
   

  
	
  SCHEDULE 8

  	
   

  	
  89

  
	
  Key Employees
  and GAT Employees

  	
   

  	
  89

  
	
   

  	
   

  	
   

  	
   

  
	
  SCHEDULE 9

  	
   

  	
  91

  
	
  Pre-Completion
  Dividends

  	
   

  	
  91

  
	
   

  	
   

  	
   

  	
   

  
	
  SCHEDULE 10

  	
   

  	
  92

  
	
  Material Terms

  	
   

  	
  92

  
	
   

  	
   

  	
   

  	
   

  
	
  APPENDIX A

  	
   

  	
  100

  
	
  Form of
  Announcement from the Vendor

  	
   

  	
  100

  
	
   

  	
   

  	
   

  	
   

  
	
  APPENDIX B

  	
   

  	
  101

  
	
  Sample Accounts

  	
   

  	
  101

  

 

 II

 

THIS AGREEMENT is
made on 25 April 2001

BETWEEN:

(1)           INDALEX UK LIMITED, a
company incorporated under the laws of England whose company number is 188407
and whose registered office is at Novar House, 24 Queens Road, Weybridge,
Surrey KT13 9UX (the Purchaser);

(2)           GLOBAL APPLIED TECHNOLOGIES HOLDINGS LIMITED, a
company incorporated under the laws of Bermuda whose registered office is at
Clarendon House, 2 Church Street, Hamilton HM11, Bermuda (the Vendor); and

(3)           INDALEX, INC., a
company incorporated under the laws of Delaware whose registered office is at
3000 Lakeside Drive, Suite 309 South, Bannockburn, IL 60015, USA (Indalex).

WHEREAS:

(A)          China Aluminum Group
Holdings (BVI) Limited, a company incorporated under the laws of the British
Virgin Islands whose registered office is at the offices of Caribbean Corporate
Services Limited, Omar Hodge Building, Wickhams Cay I, P.O. Box 362, Road Town,
Tortola, British Virgin Islands (the Company), is a private company limited by shares
incorporated in the British Virgin Islands. The Vendor is the sole legal and
beneficial owner of the entire issued share capital of the Company.

(B)           The Vendor has agreed
to sell 541,935 ordinary issued shares of US$0.01 each in the Company
(representing at the date hereof 26.2 per cent of the entire issued share
capital of the Company) (the Shares) to
the Purchaser for the consideration and upon the terms set out in this
Agreement.

(C)           Indalex has agreed to
accept the burden of certain obligations as part of the consideration for the
Vendor agreeing to enter into this Agreement.

IT
IS AGREED as follows:

DEFINITIONS AND INTERPRETATION

1.1           Words and expressions
used in this Agreement shall have the meanings set out in Part A of Schedule 1.
The provisions of Part B of Schedule 1 shall be used in the interpretation of
this Agreement.

1.2           The Schedules comprise
schedules to this Agreement and form part of this Agreement.

SALE OF THE SHARES AND PRICE

2.1           The Vendor as
beneficial owner agrees to sell, and the Purchaser agrees to purchase, the
Shares on the terms and conditions set out in this Agreement. The

 1
 

 

Shares shall be
sold free from all security interests, options, equities, claims or other third
party rights (including rights of pre-emption) of any nature whatsoever,
together with all rights attaching to them.

2.2           The Purchase Price for
the Shares shall be paid by the Purchaser (or the Purchaser shall procure that
the Purchase Price is paid) to the Vendor in the manner set out in this
Agreement.

2.3           If any payment is made
by the Vendor to the Purchaser under or in respect of any breach of or
provision requiring payment under this Agreement (including, without
limitation, any payment pursuant to any Claim or any indemnity contained in
this Agreement), the payment shall so far as possible be treated as a reduction
in the price paid for the Shares.

CONDITIONS PRECEDENT

3.1           Completion of the sale
and purchase of the Shares shall be conditional upon the following conditions
having been fulfilled:

(a)           all requisite consents
and approvals of all relevant regulatory authorities for the carrying out of
the transactions contemplated hereby having been obtained;

(b)           the operation of the
Company’s businesses having been continued in the ordinary and normal course;

(c)           no material adverse
change having occurred in the financial position or the business of the
Company;

(d)           no Group Company having
issued any new shares, options or other securities to any person;

(e)           save under the Hongjia
Agreement and/or the Nanhua Agreement, neither the Vendor nor any Group Company
having either conditionally or unconditionally disposed of, or agreed to
dispose of, any shares, options or other securities which it holds in any other
Group Company to any person;

(f)            delivery to the
Purchaser of the consolidated financial results of the Group (as audited by the
Vendor’s Accountants) in relation to the financial year ended 30 June 2000;

(g)           delivery to the
Purchaser of a report on the consolidated financial data of the Group in
relation to the financial period ended 31 December 2000 prepared by the Company
and reviewed by the Vendor’s Accountants;

(h)           the passing of a
resolution by the shareholders of the Vendor (in terms satisfactory to the
Purchaser) approving:

(i)    the transactions contemplated
by the Transaction Agreements which will or may be deemed to be of a connected
nature; and

 2
 

 

(ii)   the disposal of the Shares by
the Vendor which will constitute a major transaction,

in accordance with chapter 14 of the Hong Kong Listing
Rules; and

(i)            receipt of written
confirmation (to the reasonable satisfaction of the Purchaser) from The Stock
Exchange of Hong Kong Limited that none of the transactions contemplated by the
Transaction Agreements shall, following the approval of all such transactions
by the Vendor’s shareholders in accordance with clause 3.1(h), constitute a
connected transaction for the purposes of Chapter 14 of the Hong Kong Listing
Rules.

3.2           The Vendor undertakes
to use all reasonable endeavours to ensure that the Conditions Precedent are
fulfilled to the satisfaction of the Purchaser as soon as reasonably
practicable and in any event by noon (Hong Kong time) on 15 June 2001 (or such
later time as the parties may agree in writing). The Purchaser shall notify the
Vendor in writing within five Business Days after the Conditions Precedent
specified in clause 3.1(a), (f), (g), (h) and (i) have been fulfilled to the
satisfaction of the Purchaser.

3.3           The Purchaser shall be
entitled in its absolute discretion, by written notice to the Vendor, to waive
any or all of the Conditions Precedent either in whole or in part, except the
Conditions Precedent specified in clause 3.1(a) (in so far as the relevant
condition relates to the Company or the Vendor), clause 3.1(h) and (i).

3.4           If any of the
Conditions Precedent have not been fulfilled (or waived) on or before noon
(Hong Kong time) on 15 June 2001 (or such later time as the parties may agree
in writing), this Agreement (other than clauses 1, 12 to 24 (apart from clauses
14, 19, 20 and 22) and Schedule 1) shall automatically terminate and none of
the parties shall have any claim of any nature whatsoever against any of the
other parties under this Agreement (save in respect of any rights and
liabilities of the parties which have accrued prior to termination).

PRE-COMPLETION UNDERTAKINGS

4.1                                 Pending
Completion, the Vendor shall ensure that:

(a)                                  each
Group Company shall carry on its business in the ordinary and usual course and
shall not make (or agree to make) any payment other than routine payments in
the ordinary and usual course of trading;

(b)                                 each
Group Company shall take all reasonable steps to preserve and protect its
assets;

(c)                                  the
Purchaser is supplied with such information and documents of the Group as it or
its professional advisers may reasonably require and that its representatives
are allowed, upon reasonable notice and during normal business hours, access to
the premises of each Group Company;

 3
 

 

(d)           no member of the Vendor’s
Group shall do, allow or procure any act or omission which would constitute or
give rise to a material breach of any Warranty if the Warranties were to be
repeated on or at any time before Completion by reference to the facts and
circumstances then existing;

(e)           prompt disclosure is
made to the Purchaser of all relevant information which comes to the notice of
the Vendor in relation to any fact or matter (whether existing on or before the
date of this Agreement or arising afterwards) which may constitute a material
breach of any Warranty if the Warranties were to be repeated on or at any time
before Completion by reference to the facts and circumstances then existing;

(f)            save for those
dividends set out in Schedule 9 to be declared by each company set out in
column 1 prior to Completion and paid following Completion to the relevant
company set out in column 2 in the amounts equal to the relevant amount as set
out in column 3, no dividend or other distribution shall be declared, paid or
made by any Group Company;

(g)           no share or loan
capital shall be allotted or issued or, save pursuant to the Hongjia Acquisition
and/or the Nanhua Acquisition, agreed to be allotted or issued by any Group
Company;

(h)           no action is taken by
any member of the Vendor’s Group which is materially inconsistent with the
provisions of this Agreement or the consummation of the transactions
contemplated by this Agreement; and

(i)            unless the prior
written consent of the Purchaser has been obtained, none of the Hongjia
Material Terms and none of the Nanhua Material Terms have been amended,
modified or varied (in writing or otherwise) whether prior or subsequent to the
execution of the Hongjia Agreement or the Nanhua Agreement, respectively, and
whether at the direction of a regulatory body or otherwise.

4.2           Pending Completion, the
Vendor shall ensure that the Company consults fully with the Purchaser in
relation to any matters which may have a material effect upon the Group and
that, save for the Hongjia Agreement and the Nanhua Agreement, no Group
Company, shall, without the prior written consent of the Purchaser:

(a)           enter into any individual
contract or commitment (or make a bid or offer which may lead to a contract or
commitment) (but excluding any contract or commitment for the purchase or sale
of aluminum ingots or scrap or normal trade or credit facilities or the sale of
the Group’s products in the ordinary and normal course) having a value or
involving expenditure in excess of HK$5 million or which is of a long term or
unusual nature or which could involve an obligation of a material nature or
which may result in any material change in the nature or scope of the
operations of the Group (but excluding any contract or commitment between any
member of the Group and either (i) a new supplier of aluminum ingots or scrap;
or (ii) a new customer of the products manufactured by the Group);

 4
 

 

(b)           agree to any material
variation of any existing material contract to which that Group Company is a
party;

(c)           (whether in the
ordinary and usual course of business or otherwise) acquire or dispose of, or
agree to acquire or dispose of, any business or any asset, other than aluminum
ingots, scrap or other products of the Group, having a value in excess of HK$5
million; or

(d)           enter into any
agreement, contract, arrangement or transaction (whether or not legally
binding) other than in the ordinary and usual course of business.

4.3           Pending Completion, the
Vendor shall not, and shall procure that no member of the Vendor’s Group shall,
either conditionally or unconditionally, transfer or dispose, or, save pursuant
to the Hongjia Acquisition and/or the Nanhua Acquisition, agree to transfer or
dispose, of any share(s) in the capital of any Group Company to any other
person (save as contemplated by this Agreement).

4.4           The Vendor undertakes
that it shall consult with the Purchaser and keep the Purchaser informed on an
ongoing basis in relation to the due diligence review process undertaken in
relation to the Hongjia Acquisition and the Nanhua Acquisition and, upon the
Purchaser’s request, shall provide the Purchaser with all information relating
to the Hongjia Acquisition and the Nanhua Acquisition.

COMPLETION

5.1           The sale and purchase
of the Shares shall be completed at the Hong Kong offices of Freshfields
Bruckhaus Deringer on 8 June 2001 or on such date as may be agreed between the
Vendor and the Purchaser following notification by the Purchaser to the Vendor
of the fulfilment (or waiver) of all the Conditions Precedent (but, in any
event, prior to noon (Hong Kong time) on 26 June 2001 or such later date as the
parties may agree in writing). The events referred to in the following
provisions of this clause 5 shall take place on Completion.

5.2           The Vendor shall
deliver (or cause to be delivered) to the Purchaser:

(a)           duly executed transfers
into the name of the Purchaser or its nominee in respect of all of the Shares,
together with the relative share certificates;

(b)           originals of each of
the Core Agreements (other than the Service Agreements and the Amendment
Service Agreements) duly executed (where appropriate, as a deed) by each of the
appropriate parties (other than the Purchaser);

(c)           all such other
documents (including any necessary waivers of pre-emption rights or other
consents) as may be required to enable the Purchaser and/or its nominee to be
registered as the holder(s) of the Shares;

(d)           copies of the following
(i) the constitutional documents of the Vendor and the Company; (ii) the
resolutions of the boards of directors of the Vendor and the Company,
authorising the execution of and the performance by the Vendor

 5
 

 

and the Company of their obligations under the
relevant Transaction Agreements and each of the other documents to be executed
by the Vendor and the Company; and (iii) the powers of attorney, dated prior to
the date of this Agreement, executed by the Vendor in favour of Kwong to
execute, as appropriate, each of the Transaction Agreements and all other
documents referred to in any of the Transaction Agreements on the Vendor’s
behalf (each copy to be certified by a duly appointed officer as true and
correct and, in the case of the constitutional documents, accurate as at the
Completion Date); and

(e)           a copy of the
confirmation from Global Applied Technologies Limited currently of 12th Floor, Railway Plaza, 39 Chatham Road South,
Kowloon, Hong Kong, confirming its acceptance to act as the Company’s agent for
service of process and any other documents in proceedings in Hong Kong or any
other proceedings in connection with this Agreement.

5.3           The Vendor shall use
its best endeavours to procure that it shall deliver to the Purchaser copies of
each of the Service Agreements and each of the Amendment Service Agreements
(certified by a duly appointed officer as true and correct) duly executed by
each of the relevant parties.

5.4           The Vendor shall
procure that resolutions of the board of directors of the Company are passed by
which the following business are transacted:

(a)           the registration
(subject to their being duly stamped) of the transfers in respect of the Shares
referred to in clause 5.2 are approved;

(b)           the due execution of
each of the Core Agreements to which the Company is a party (where appropriate,
as a deed) by the Company; and

(c)           the adoption of the
Amendments to the Articles substantially in the form of the agreed draft set
out in Schedule 7. Prior to the Company adopting the Amendments to the Articles,
the Vendor shall, as the holder of at least 75 percent. of the issued voting
shares in the capital of the Company as at Completion, pass a shareholder’s
special resolution to approve the adoption of the Amendments to the Articles by
the Company substantially in the form of the agreed draft set out in Schedule
7.

5.5           The Purchaser shall:

(a)           pay, or shall procure
payment, to the Vendor the sum of HK$419,200,000, subject to adjustment as
provided in clause 7. Such payment shall be made in the manner and to the
account specified in clause 20 and the Purchaser shall not be concerned to see
that the funds are applied in payment to the Vendor;

(b)           deliver to the Vendor
originals of each of the Core Agreements to which the Purchaser is a party duly
executed (where appropriate, as a deed) by the Purchaser;

 6
 

 

(c)           deliver to the Vendor
copies of the following (i) a list of all directors of the Purchaser; (ii) the
latest audited financial statements of the Purchaser; (iii) the constitutional
documents of the Purchaser, (iv) the minutes of the Purchaser authorising the
execution and performance by the Purchaser of its obligations under the
relevant Transaction Agreements and each of the other documents to be executed
by the Purchaser; and (v) the power of attorney, dated prior to the date of
this Agreement, executed by the Purchaser in favour of, amongst others, Mark
Emery, to execute, as appropriate, each of the Transaction Agreements and all
other documents referred to in any of the Transaction Agreements on the Purchaser’s
behalf (each copy to be certified by a duly appointed officer as true and
correct and, in the case of the list of directors and the constitutional
documents, accurate as at the Completion Date); and

(d)           deliver to the Vendor a
copy of the confirmation from MK Electric (China) Limited currently of 9th Floor Grand Centre, 8 Humphreys Avenue,
Tsimshatsui, Kowloon, Hong Kong confirming its acceptance to act as the
Purchaser’s agent for service of process and any other documents in proceedings
in Hong Kong or any other proceedings in connection with this Agreement.

5.6           If the Vendor fails or
is unable to perform any material obligation required to be performed by the
Vendor pursuant to clauses 5.2, 5.3 or 5.4 by noon (Hong Kong time) on 26 June
2001, the Purchaser shall not be obliged to complete the sale and purchase of
the Shares and may, in its absolute discretion, by written notice to the
Vendor:

(a)           terminate this
Agreement (other than clauses 1, 12 to 24 (apart from clauses 14, 19, 20 and
22) and Schedule 1), in which case none of the parties shall have any claim of
any nature whatsoever against any of the other parties under this Agreement
(save in respect of any rights and liabilities of the parties which have
accrued prior to termination);

(b)           elect to complete this
Agreement on that date, to the extent that the Vendor or the Company, as
appropriate, is ready, able and willing to do so, and specify a later date on
which the Vendor or the Company, as appropriate, shall be obliged to complete
its outstanding obligations; or

(c)           elect to defer the
completion of this Agreement by not more than 20 Business Days to such other
date as it may specify in such notice, in which event the provisions of this
clause 5.6 (other than this sub-clause (c)) shall apply, mutatis mutandis, if
the Vendor or the Company, as appropriate, fails or is unable to perform any
such obligations on such other date.

5.7           If the Purchaser fails
or is unable to perform any material obligation required to be performed by the
Purchaser pursuant to clause 5.5 by noon (Hong Kong time) on 26 June 2001, the
Vendor shall not be obliged to complete the sale and purchase of the Shares and
the Vendor may, in its absolute discretion, by written notice to the Purchaser:

 7
 

 

(a)           terminate this Agreement
(other than clauses 1, 12 to 24 (apart from clauses 14, 19, 20 and 22) and
Schedule 1), in which case none of the parties shall have any claim of any
nature whatsoever against any of the other parties under this Agreement (save
in respect of any rights and liabilities of the parties which have accrued
prior to termination);

(b)           elect to complete this
Agreement on that date, to the extent that the Purchaser is ready, able and
willing to do so, and specify a later date on which the Purchaser shall be
obliged to complete its outstanding obligations; or

(c)           elect to defer the
completion of this Agreement by not more than 20 Business Days to such other
date as it may specify in such notice, in which event the provisions of this
clause 5.7 (other than this sub-clause (c)) shall apply, mutatis mutandis, if
the Purchaser fails or is unable to perform any such obligations on such other
date.

ADJUSTMENT ACCOUNTS

6.1           Each set of Adjustment
Accounts to be prepared under this Agreement shall be prepared in accordance with
the provisions and basis set out in Schedule 5 and this clause 6.

6.2           As soon as practicable
following the balance sheet date of the relevant Adjustment Accounts, the
Vendor shall deliver to the Purchaser the unaudited management accounts in
relation to the Company and its subsidiaries for the period to which the
relevant Adjustment Accounts relate. The Vendor shall arrange for draft
Adjustment Accounts to be prepared by the Company and the Vendor’s Accountants
and for such draft Adjustment Accounts to be delivered to the Purchaser (with a
copy to the Purchaser’s Accountants) within:

(a)           60 days of the
Completion Date;

(b)           90 days of the balance
sheet date of the 2001 Adjustment Accounts; and

(c)           60 days of the balance
sheet date of the 2002 Adjustment Accounts and the 2003 Adjustment Accounts.

6.3           The Vendor shall
arrange for the draft Adjustment Accounts to be subject to certain review
procedures as specified in Schedule 5 and performed by the Vendor’s Accountants
prior to submission to the Purchaser. The Purchaser shall notify the Vendor
within 30 days of receipt of such draft Adjustment Accounts whether or not it
accepts them for the purposes of this Agreement.

6.4           If the Purchaser
notifies the Vendor that it does not accept such draft Adjustment Accounts:

(a)           it shall set out in
detail its reasons for such non-acceptance and specify the adjustments which,
in its opinion, should be made to the draft Adjustment Accounts in order to
comply with the requirements of this Agreement; and

 8
 

 

(b)           the Vendor and Purchaser
shall use all reasonable endeavours (in conjunction with the Vendor’s
Accountants and the Purchaser’s Accountants) to meet and discuss the objections
of the Purchaser and to reach agreement upon the adjustments (if any) required
to be made to the draft Adjustment Accounts.

6.5           If the Purchaser is
satisfied with the draft Adjustment Accounts (either as originally submitted or
after adjustments agreed between the Vendor and the Purchaser) or if the
Purchaser fails to notify the Vendor of its non-acceptance of the draft
Adjustment Accounts within the 30 day period referred to in clause 6.3, then
the draft Adjustment Accounts (incorporating any agreed adjustments) shall
constitute the Adjustment Accounts for the purposes of the obligation under
this Agreement in relation to which they are being prepared.

6.6           If the Vendor and the
Purchaser do not reach agreement within 30 days of the Purchaser’s notice of
non-acceptance under clause 6.4, then, on the application of either the Vendor
or the Purchaser, the matters in dispute shall be referred for determination by
an independent firm of internationally recognised certified public accountants
in Hong Kong to be agreed upon by the Vendor and the Purchaser or, failing
agreement, to be selected by the President of the Hong Kong Society of
Accountants. The following terms of reference shall apply:

(a)           the Purchaser’s
Accountants and the Vendor’s Accountants shall each promptly prepare a written
statement on the matters in dispute which (together with the relevant documents)
shall be submitted to such independent firm for determination;

(b)           in giving such
determination, the firm shall state what adjustments (if any) are necessary to
the draft Adjustment Accounts in respect of the matters in dispute in order to
comply with the requirements of this Agreement and the detailed reasons for
such adjustments;

(c)           any such firm shall act
as an expert (and not as an arbitrator) in making any such determination which
shall be final and binding on the Vendor and the Purchaser; and

(d)           the expenses of any
such determination by an independent firm of accountants shall be borne between
the Vendor and the Purchaser in such proportions as the firm shall in its
discretion determine (acting as experts and not as arbitrators).

6.7           If the Vendor and the
Purchaser reach (or pursuant to clause 6.5 are deemed to reach) agreement on
the Adjustment Accounts or the Adjustment Accounts are finally determined at
any stage in the procedures set out in this clause 6:

(a)           the Adjustment Accounts
as so agreed, constituted or determined shall be the Adjustment Accounts for
the purposes of the obligation under this Agreement in relation to which they
are being prepared and shall be final and binding on the Vendor and the
Purchaser, and

 9
 

 

(b)           (i)            in relation to the Completion Accounts, the
amount of the Completion Net Debt; and

(ii)           in relation to the 2001
Adjustment Accounts, 2002 Adjustment Accounts and 2003 Adjustment Accounts, the
amount of the Working Capital, Company Sales and EBITDA as at the balance sheet
date in relation to which the Adjustment Accounts have been prepared,

shall be derived from the Adjustment Accounts by
reference to, among other things, the provisions of Schedule 5 and the Sample
Accounts.

6.8           Each party shall use
all reasonable endeavours to ensure that the Purchaser and the Purchaser’s
Accountants and the Vendor and the Vendor’s Accountants each have such access
to all relevant working and other papers which relate to the relevant
Adjustment Accounts and provide to the accountants appointed under clause 6.6
such information and explanations as are reasonably necessary for the purposes
of this Agreement.

INITIAL PRICE ADJUSTMENT AND
DEFERRED PAYMENT OBLIGATIONS

7.1           Following Completion,
Completion Accounts shall be prepared. Upon determination, by reference to the
Completion Accounts, of the Completion Net Debt, the following payments shall
be made:

(a)           if the Completion Net
Debt is a positive figure, the Vendor shall pay to the Purchaser an amount
equal to the Completion Net Debt multiplied by the Applicable Proportion; and

(b)           if the Completion Net
Debt is a negative figure, the Purchaser shall pay, failing which Indalex shall
pay, to the Vendor an amount equal to the Completion Net Debt multiplied by the
Applicable Proportion provided that the maximum that the Purchaser shall pay to
the Vendor under this subclause (b) shall not exceed HK$100,000,000.

7.2           Following 30 June 2001,
Adjustment Accounts shall be prepared as at 30 June 2001 (the 2001 Adjustment
Accounts). Upon determination by reference to the
2001 Adjustment Accounts of the 2001 EBITDA, the 2001 Working Capital and the
2001 Company Sales, the Purchaser shall, subject to the following conditions
being fulfilled, pay, failing which Indalex shall pay, to the Vendor by way of adjustment
to the Purchase Price an additional HK$26,200,000. The conditions are:

(a)           the 2001 Company Sales
being equal to or greater than the 2001 Company Sales Threshold;

(b)           the 2001 EBITDA being
equal to or greater than the 2001 EBITDA Threshold; and

(c)           the ratio of the 2001
Working Capital to the 2001 Company Sales being the same as or less than the
Ratio Threshold.

 10
 

 

If one or more of the conditions in paragraphs (a) to
(c) (inclusive) above is not fulfilled, then the Vendor shall irrevocably
forfeit its right to receive any payment under this clause 7.2.

7.3           Following 30 June 2002, Adjustment Accounts
shall be prepared as at 30 June 2002 (the 2002 Adjustment Accounts). Upon
determination, by reference to the 2002 Adjustment Accounts, of the 2002 EBITDA,
the 2002 Working Capital and the 2002 Company Sales, the Purchaser shall,
subject to the following conditions being fulfilled, pay, failing which Indalex
shall pay, to the Vendor by way of adjustment to the Purchase Price an
additional HK$52,400,000. The conditions are:

(a)           the 2002 Company Sales
being equal to or greater than the 2002 Company Sales Threshold;

(b)           the 2002 EBITDA being
equal to or greater than the 2002 EBITDA Threshold; and

(c)           the ratio of the 2002
Working Capital to the 2002 Company Sales being the same as or less than the
Ratio Threshold.

If one or more of the
conditions in paragraphs (a) to (c) (inclusive) above is not fulfilled, then
the Vendor shall irrevocably forfeit its right to receive any payment under
this clause 7.3.

7.4           Following 30 June 2003,
Adjustment Accounts shall be prepared as at 30 June 2003 (the 2003 Adjustment Accounts). Upon determination, by reference to the
2003 Adjustment Accounts, of the 2003 EBITDA, the 2003 Working Capital and the
2003 Company Sales, the Purchaser shall, subject to the following conditions
being fulfilled, pay, failing which Indalex shall pay, to the Vendor by way of
adjustment to the Purchase Price an additional HK$26,200,000. The conditions
are:

(a)           the 2003 Company Sales
being equal to or greater than the 2003 Company Sales Threshold;

(b)           the 2003 EBITDA being
equal to or greater than the 2003 EBITDA Threshold; and

(c)           the ratio of the 2003
Working Capital to the 2003 Company Sales being the same as or less than the
Ratio Threshold.

If one or more of the
conditions in paragraphs (a) to (c) (inclusive) above is not fulfilled, then
the Vendor shall irrevocably forfeit its right to receive any payment under
this clause 7.4.

7.5           Any payment to be made
in accordance with this clause 7 shall be made within one calendar month after
the Vendor and the Purchaser having reached (or pursuant to clause 6.5 are
deemed to have reached) agreement on the relevant Adjustment Accounts or the
relevant Adjustment Accounts having been finally determined at any stage is the
procedures set out in clause 6.

 11
 

 

7.6           All amounts payable by
the Purchaser to the Vendor under this clause 7 shall be subject to set-off
against any accrued rights of payment of any liquidated sums due to the
Purchaser from the Vendor under this Agreement or the Shareholders Agreement.

7.7           Any payment made in
accordance with this clause 7 shall be made in the manner and to the account
specified in clause 20 and the Purchaser shall not be concerned to see that the
funds are applied in payment to the Vendor.

NON-COMPETITION RESTRICTIONS

8.1           Each of Indalex and the
Purchaser shall not and each shall procure that each other member of the
Indalex Group and the Purchaser’s Group respectively shall not (whether alone
or jointly with another and whether directly or indirectly) carry on or be
engaged or interested economically or otherwise in any manner whatsoever in any
Competing Business operating in the PRC from the period commencing upon
Completion and expiring upon the Purchaser Disposal Date. The restrictions in
this clause 8.1 shall not apply:

(a)           to any direct or
indirect shareholding in the Company, any other Group Company or any other
company or business in which any member of the Purchaser’s Group or any member
of the Indalex Group has co-invested with a member of the Vendor’s Group; or

(b)           where the Shareholders
Agreement has terminated or in the event that a Deadlock (as defined in the
Shareholders Agreement) arises.

8.2           The Vendor shall not
and shall procure that each other member of the Vendor’s Group shall not
(whether alone or jointly with another and whether directly or indirectly)
carry on or be engaged or interested economically or otherwise in any manner
whatsoever in any Competing Business:

(a)           operating in North
America and / or Canada (including by way of import and sale into North America
and / or Canada by or on behalf of any Competing Business of any goods
manufactured, produced or acquired by or supplied to such Competing Business)
during the period from Completion to the third anniversary of the Vendor
Disposal Date or the third anniversary of the termination of the Shareholders
Agreement (whichever is later); or

(b)           operating in the PRC
during the period from Completion to the Purchaser Disposal Date.

The restrictions in this
clause 8.2 shall not apply:

(i)            to any direct or
indirect shareholding in the Company, any other Group Company or any other
company or business in which any member of the Vendor’s Group has co-invested
with a member of the Purchaser’s Group or a member of the Indalex Group; or

 12
 

 

(ii)           as regards the
restriction in subclause (b),

(A)      following the expiry of a
two month period commencing upon a Deadlock (as defined in the Shareholders
Agreement) arising (unless the Deadlock is resolved under the provisions of the
Shareholders Agreement prior to the expiry of the two month period) and the
restrictions in subclause (b) shall continue to cease to apply for such time as
the Deadlock is ongoing and has not been resolved under the provisions of the
Shareholders Agreement; or

(B)      in the event that the
Shareholders Agreement terminates.

8.3           The Vendor shall not
(and shall procure that each other member of the Non-Aluminum Group shall not)
within a period of two years after Completion, directly or indirectly, solicit
or endeavour to entice away from any Group Company, offer employment to or
employ, or offer or conclude any contract for services with, any director,
officer or person who was employed by any Group Company in highly skilled or
managerial work at any time during the 12 months prior to Completion.

8.4           The Purchaser shall not
(and shall procure that each other member of the Purchaser’s Group shall not)
within a period of two years after Completion, directly or indirectly, solicit
or endeavour to entice away from any Group Company, offer employment to or
employ, or offer or conclude any contract for services with, any director,
officer or person who was employed by any Group Company in highly skilled or
managerial work at any time during the 12 months prior to Completion.

8.5           Except so far as may be
required by law and in such circumstances only after prior consultation with
the Purchaser, the Vendor shall not (and shall procure that each other member
of the Non-Aluminum Group shall not) at any time disclose to any person or use
to the detriment of any Group Company any trade secret or other confidential
information of a technical character which it holds in relation to any Group
Company or its affairs.

8.6           The parties acknowledge
and agree that each of clauses 8.1, 8.2, 8.3 and 8.4 constitutes an entirely
separate and independent restriction and that the duration, extent and
application of each restriction are no greater than is reasonable and necessary
for the protection of the interests of the respective parties but that, if any
such restriction shall be adjudged by any court or authority of competent
jurisdiction to be void or unenforceable but would be valid if part of the
wording thereof were to be deleted and/or the period thereof were to be reduced
and/or the area dealt with thereby were to be reduced, the said restriction
shall apply within the jurisdiction of that court or competent authority with
such modifications as are necessary to make it valid and effective.

WARRANTIES AND UNDERTAKINGS

9.1           The Vendor represents and
warrants to the Purchaser in the terms of the Warranties and acknowledges that
the Purchaser has entered into this Agreement in

 13
 

 

reliance upon the Warranties. The Warranties are
subject to the matters fairly disclosed in
the Disclosure Letter.

9.2           The Vendor agrees to waive the benefit of all rights (if any) which it
may have against:

(a)           any Group Company; or

(b)           to the
extent that any claim against them will result in the relevant Group Company which employs such persons incurring a
corresponding liability to such
persons, any present or former officer or employee of any such company,

on
whom the Vendor may have relied in agreeing to any term of this Agreement or any
statement set out in the Disclosure Letter and the Vendor undertakes not to
make any claim in respect of such reliance.

9.3           Each of the Warranties shall be construed as a
separate Warranty and (save as expressly provided to the contrary) shall not be
limited or restricted by reference to or inference from the terms of any other
Warranty or any other term of this Agreement.

9.4           The Warranties shall be deemed to be repeated at
all times up to and including Completion with reference to the facts and
circumstances then existing.

9.5           The Vendor undertakes to notify the Purchaser in
writing promptly if it becomes aware
of any circumstance arising after the date of this Agreement which would cause any Warranty (if the Warranties were
repeated with reference to the facts and circumstances then existing) to become
untrue or inaccurate or misleading in any respect which is material to the financial or trading position of the
Group taken as a whole.

9.6           The Vendor agrees and undertakes that it shall,
and shall procure that each Group Company in relation to which an
Exemption or Exemptions is or are disclosed as having been granted in the
Disclosure Letter shall, comply with all the conditions and requirements in order to benefit from the relevant Exemption or
Exemptions; and shall duly and within appropriate time limits file all returns,
letters, notices required to be filed in order to benefit from such
Exemption or Exemptions to the full extent set out in the Disclosure Letter.

LIMITATIONS ON CLAIMS

10.1         The Vendor shall not be
liable for any Claim:

(a)           unless the Purchaser gives written notice
containing details of the Claim including the Purchaser’s estimate (on a
without prejudice basis) of the amount of such Claim:

(i)        on or before the date
falling 60 days after receipt by the Purchaser’s Accountants of the Accounts for the financial year ending 30 June

 14
 

 

2003, in the case of a
Claim for breach of any of the Warranties other than the Tax Warranties and the Environmental Warranties;

(ii)       on or before the date falling 60 days after receipt
by the Purchaser’s Accountants of the Accounts for the financial year ending 30
June 2011, in the case of a Claim for breach of any of the Tax Warranties or
under the Exemption Undertaking; and

(iii)      on or before the thirtieth anniversary of
Completion, in the case of a Claim for breach of any of the Environmental
Warranties;

(b)           unless the aggregate
amount of the liability for all Claims exceeds HK$1,000,000 (in which event the Purchaser shall be entitled to claim
the whole amount of such Claims and
not merely the excess); and

(c)           for breach of the Tax
Warranties or under the Exemption Undertaking, to the extent that the Claim
arises or is increased as a result only of any increase in rates of Tax or a
withdrawal of any Exemption or the imposition of additional conditions to a right to an Exemption which is
announced and comes into force after the date of this Agreement or of
any change in law relating to Tax governing
the Group or the interpretation or enforcement of such law which is announced
and comes into force after the date of this Agreement.

10.2         The
Vendor’s aggregate amount of liability for all Claims shall not exceed the
Purchase Price.

10.3         None
of the limitations contained in clauses 10.1 and 10.2 shall apply to any breach of any Warranty which (or the delay in
discovery of which) is the consequence of
dishonest or deliberate mis-statement, concealment or other such conduct by
Kwong or by any member of the Vendor’s Group or any officer or employee, or former officer or employee, of any member of the
Vendor’s Group.

10.4         No
liability for any Claim for breach of any Warranty shall arise:

(a)           if and to
the extent that the fact, matter, event or circumstance giving rise to such Claim was fairly disclosed in the Disclosure
Letter;

(b)           if and to the extent that the matter giving rise
to such Claim is specifically provided
or reserved for in the Last Accounts; or

(c)           if and to the extent that an adjustment to the
Purchase Price has been made under
clause 7.1 and such adjustment relates to the matter giving rise to such Claim.

10.5         In the event that any member or members of the Group makes recovery for
any loss incurred under the Tax Indemnity arising from circumstances which also
directly relate to a Claim, the liability of the Vendor to the Purchaser under
that Claim shall be limited to the
amount by which the amount of the Claim exceeds the amount so

 15
 

 

recovered by the Group (net of reasonable
out-of-pocket costs and expenses incurred in
such recovery) under the Tax Indemnity.

PURCHASER’S RIGHTS TO TERMINATE

11.           The Purchaser may by written notice given to the
Vendor at any time prior to Completion terminate this Agreement (other
than clauses 1, 12 to 24 (apart from clauses 14, 19, 20 and 22) and Schedule 1)
if any fact, matter or event (whether existing
or occurring on or before the date of this Agreement or arising or occurring afterwards)
comes to the notice of the Purchaser at any time prior to Completion which:

(a)           constitutes
a material breach by the Vendor of this Agreement (including, without limitation, any material breach of the
pre-Completion undertakings in clause
4);

(b)           would constitute a breach of any Warranty (being
material in the context of the Group
taken as a whole) subject to the matters fairly disclosed in the Disclosure
Letter if the Warranties were repeated on or at any time before Completion by reference to the facts and
circumstances then existing; or

(c)           affects or is likely to affect in a materially adverse
manner the business, financial
position or prospects of the Group taken as a whole (not being an event affecting or likely to affect to a similar
extent generally all companies carrying
on similar businesses in the PRC),

in
which case none of the parties shall have any claim of any nature whatsoever against
any of the other parties under this Agreement (save in respect of any rights
and liabilities of the parties which have accrued prior to termination).

WITHHOLDING TAX AND GROSSING UP

12.1         The
Vendor shall pay all sums payable by them under this Agreement free and dear of all deductions or withholdings. If a
deduction or withholding is so required, the Vendor shall pay such additional amount as will ensure that the net
amount the payee receives equals the
full amount which it would have received had the deduction or
withholding not been required.

12.2         If
any U.S., English or Hong Kong Tax Authority brings any sum paid by the Vendor under or pursuant to this Agreement into
charge to Tax, then the Vendor shall pay
such additional amount as will ensure that the total amount paid, less the Tax chargeable on such amount, is equal to the amount
that would otherwise be payable under
this Agreement

ENTIRE AGREEMENT

13.           This Agreement, the Deed of Undertaking, the Core
Agreements and the Disclosure Letter set out the entire agreement and
understanding between the parties in respect
of the sale and purchase of the Shares. This Agreement supersedes the

 16
 

 

Memorandum of Understanding dated 7 March 2001 (and
effective on 8 March 2001) between the parties and Kwong which shall cease to
have any further force or effect.

VARIATION

14.1         No
variation of this Agreement (or of any of the documents referred to in this
Agreement) shall be valid unless it is in writing and signed by or on behalf of
each of the parties to it.  The expression variation shall include any variation, supplement, deletion or replacement however effected.

14.2         Unless
expressly agreed, no variation shall constitute a general waiver of any provisions of this Agreement, nor shall it affect
any rights, obligations or liabilities under
or pursuant to this Agreement which have already accrued up to the date of variation, and the rights and obligations of the
parties under or pursuant to this Agreement
shall remain in full force and effect, except and only to the extent that they
are so varied.

ASSIGNMENT

15.1         It is acknowledged and agreed by the Vendor that
the Purchaser may at any time following Completion effect a corporate
reorganisation of the Purchaser’s Group and / or the Indalex Group whereby the
Purchaser may sell or transfer (or procure the sale or transfer of) all or any of the Shares to Indalex or any wholly
owned subsidiary of either the
Purchaser or Indalex. Accordingly, subject to clause 15.2 the Vendor agrees
that the benefit of this Agreement may be assigned (in whole or in part) by the
Purchaser without the consent of the Vendor
to, and may be enforced by, Indalex or any wholly owned subsidiary of either
the Purchaser or Indalex which is the legal and / or beneficial owner for the time being of any or all of the Shares as
if it were the Purchaser under this Agreement.

15.2         If the benefit of the whole or any part of this
Agreement is assigned by the Purchaser
to Indalex or any of either the Purchaser’s or Indalex’s wholly owned subsidiaries in accordance with clause 15.1 that
company may at any time assign the same
to Indalex or any other wholly owned subsidiary of either the Purchaser or Indalex and where any such assignee subsequently
ceases to be a wholly owned subsidiary of either the Purchaser or
Indalex, the Purchaser or Indalex, as appropriate, shall procure that before it so ceases it shall assign that benefit to
Indalex, to the Purchaser or to another continuing wholly owned
subsidiary of either the Purchaser or Indalex.

15.3         It is acknowledged and agreed by Indalex and the
Purchaser that the Vendor may at any
time following Completion effect an intra-group reorganisation of the Vendor’s Group whereby, subject to obtaining the
Purchaser’s prior written consent (not to be unreasonably withheld or delayed),
the Vendor may sell or transfer all or any
of the ordinary shares in the capital of the Company held by it (the Vendor’s Shares) to
any other wholly owned subsidiary of the Vendor. Accordingly, subject to clause
15.4, Indalex and the Purchaser agree that the benefit of this Agreement may be
assigned (in whole or in part) by the Vendor,
subject to obtaining the Purchaser’s prior
written consent (not to be unreasonably withheld or delayed), to, and may be

 17
 

 

enforced by, any wholly owned subsidiary of the Vendor
which is the legal and / or the beneficial owner for the time being of any or
all of the Vendor’s Shares as if it were the
Vendor under this Agreement.

15.4         If
the benefit of the whole or any part of this Agreement is assigned by the Vendor to any of its wholly owned subsidiaries in
accordance with clause 15.3 that member
of the Vendor’s Group may, subject to obtaining the Purchaser’s prior written consent (not to be unreasonably withheld or
delayed), at any time assign the same to any other wholly owned subsidiary of the Vendor’s Group and where any
such assignee subsequently ceases to be
a wholly owned subsidiary of the Vendor, the Vendor shall procure that before it so ceases it shall assign that
benefit to the Vendor or to another
continuing wholly owned subsidiary of the Vendor, subject to obtaining the
Purchaser’s prior written consent (not to be unreasonably withheld or delayed).

15.5         Save
as provided in clauses 15.1, 15.2, 15.3 and 15.4, no party shall nor shall it purport to assign, transfer, charge or
otherwise deal with all or any of its rights under this Agreement nor grant, declare, create or dispose of any right
or interest in it without the prior written consent of the other parties.

ANNOUNCEMENTS

16.1         Save
for the Announcement and except as required by law or by any stock exchange or
governmental or other regulatory or supervisory body or authority of competent jurisdiction  to whose rules the party making the announcement or disclosure is subject, whether or not having the force of
law, no announcement or circular or
disclosure in connection with the existence or subject matter of this Agreement shall be made or issued by or on behalf
of the Company, the Vendor’s Group or the Purchaser’s Group without the prior
written approval of each of the others
(such approval not to be unreasonably withheld or delayed), during any period before or within two years after Completion.

16.2         Save for the
Announcement, where any announcement or disclosure is made in reliance on the
exception in clause 16.1, the party making the announcement or disclosure will
use its reasonable endeavours to consult with the other party in advance as to
the form, content and timing of the announcement or disclosure and, unless
required to do so by the stock exchange or governmental or other regulatory or
supervisory body or authority of competent jurisdiction to whose rules the
party making the announcement or disclosure is subject, no reference shall be
made in the announcement to Kwong or any member of the Vendor’s Group (if the
announcement is being made by any member of the Purchaser’s Group) or to any
member of the Purchaser’s Group (if the announcement is being made by any
member of the Vendor’s Group or Kwong). 
If reference is required, the relevant party (or, if they cannot be
reached, their professional advisers) shall be notified and the parties (or if
relevant their professional advisers) shall discuss and use their best
endeavours to agree the content of the announcement. Any finalised
announcements made by or on behalf of one party shall be sent to each of the
parties prior to publication.

 18

 

COSTS

17.           Each of the Vendor
and the Purchaser shall pay its own Costs incurred in connection with the
negotiation, preparation and implementation of this Agreement.

SEVERABILITY

18.           If any provision of
this Agreement is held to be invalid or unenforceable, then such provision
shall (so far as it is invalid or unenforceable) be given no effect and shall
be deemed not to be included in this Agreement but without invalidating any of
the remaining provisions of this Agreement. The parties shall then use all reasonable
endeavours to replace the invalid or unenforceable provisions by a valid and
enforceable substitute provision the effect of which is as close as possible to
the intended effect of the invalid or unenforceable provision.

COUNTERPARTS

19.           This Agreement may
be executed in any number of counterparts and by the parties to it on separate
counterparts, each of which is an original but all of which together constitute
one and the same instrument.

PAYMENTS

20.1         All payments made
under this Agreement by the Vendor to the Purchaser or vice versa shall be made
in accordance with the terms of this clause.

20.2         In the event that the
Purchaser is obliged to pay any amount to the Vendor under this Agreement on
any particular day, the Purchaser shall cause the amount to be paid, in
immediately available funds, by electronic funds transfer to the Vendor’s bank
account at The Hongkong and Shanghai Banking Corporation Limited, Account Type:
HKD Savings Account, Account No: 001-4-326441, Account name: Global Applied Technologies
Holdings Limited, for value on the same day.

20.3         In the event that the
Vendor is obliged to pay any amount to the Purchaser under this Agreement on
any particular day, the Vendor shall cause the amount to be paid, in
immediately available funds, by electronic funds transfer to the Purchaser’s
bank account at Lloyds TSB Bank plc, City Office, 11-15 Monument Street, London
EC3V 9JA, swift code LOYDGB2LCTY, Account Name: Indalex UK Limited, Account No:
49005142 for value, on the same day.

WAIVERS,
RIGHTS AND REMEDIES

21.1         No failure or delay
by either the Purchaser, Indalex or the Vendor in exercising any right or
remedy provided by law under or pursuant to this Agreement shall impair such
right or remedy or operate or be construed as a waiver or variation of it or
preclude its exercise at any subsequent time and no single or partial exercise
of any such right or remedy shall preclude any other or further exercise of it
or the exercise of any other right or remedy.

 19
 

 

21.2         The rights and remedies
of the Purchaser, Indalex and the Vendor under or pursuant to this Agreement
are cumulative, may be exercised as often as either the Purchaser, Indalex or
the Vendor, as appropriate, considers appropriate and are in addition to its
rights and remedies under general law.

21.3         The rights and remedies
of the Purchaser, Indalex and the Vendor under this Agreement shall not be
affected, and the other’s liabilities under this Agreement shall not be
released, discharged or impaired, (i) by Completion, (ii) in relation to the
Purchaser’s or Indalex’s rights and remedies, by any investigation made into
the affairs of any Group Company, (iii) subject to compliance with the notice
requirements in clause 10.1(a), by the expiry of any limitation period
prescribed by law, or (iv) other than by a specific and duly authorised written
waiver or release by the Purchaser, Indalex or the Vendor, as appropriate.

FURTHER ASSURANCE

22.           The Vendor agrees to
perform (or procure the performance of) all further acts and things, and
execute and deliver (or procure the execution and delivery of) such further
documents, as may be required by law or as the Purchaser may reasonably
require, whether on or after Completion, to implement and/or give effect to
this Agreement and the transaction contemplated by it and for the purpose of
vesting in the Purchaser the full benefit of the assets, rights and benefits to
be transferred to the Purchaser under this Agreement.

NOTICES

23.1         Any notice or other
communication to be given by one party to any other party under, or in
connection with, this Agreement shall be in writing and signed by or on behalf
of the party giving it. It shall be served by sending it by fax to the number
set out in clause 23.2, or delivering it by hand, or sending it by pre-paid recorded
delivery, special delivery or registered post, to the address set out in clause
23.2 and in each case marked for the attention of the relevant party set out in
clause 23.2 (or as otherwise notified from time to tune in accordance with the
provisions of this clause 23). Any notice so served by hand, fax or post shall
be deemed to have been duly given:

(a)           in the case of delivery
by hand, when delivered;

(b)           in the case of fax, at
the time of transmission; or

(c)           in the case of prepaid
recorded delivery, special delivery or registered post, at 10am on the second
Business Day following the date of posting,

provided that in each
case where delivery by hand or by fax occurs after 6pm on a Business Day or on
a day which is not a Business Day, service shall be deemed to occur at 9am on
the next following Business Day.

References to time in
this clause are to local time in the country of the addressee.

 20
 

 

23.2         The addresses and fax
numbers of the parties for the purpose of clause 23.1 are as follows:

Global
Applied Technologies Holdings Limited

	
  Address:

  	
  12th Floor 

  
	
   

  	
  Railway Plaza 

  
	
   

  	
  39 Chatham Road South 

  
	
   

  	
  Kowloon

  Hong Kong

  
	
   

  	
   

  
	
  Fax:

  	
  +852 2156 8600

  
	
   

  	
   

  
	
  For the
  attention of:

  	
  The Chairman

  
	
   

  	
   

  
	
  Indalex,
  Inc.

  	
   

  
	
   

  	
   

  
	
  Address:

  	
  Indalex, Inc. 

  
	
   

  	
  3000 Lakeside Drive 

  
	
   

  	
  Suite 309 South 

  
	
   

  	
  Bannockburn

  
	
   

  	
  IL 60015 

  
	
   

  	
  USA

  
	
   

  	
   

  
	
  Fax:

  	
  +1 847 295 3782

  
	
   

  	
   

  
	
  For the
  attention of:

  	
  The Company Secretary of Indalex, Inc.

  
	
   

  	
   

  
	
  with a copy to:

  	
   

  
	
   

  	
   

  
	
  Novar
  PLC

  	
   

  
	
   

  	
   

  
	
  Address:

  	
  Novar PLC 

  
	
   

  	
  Novar House 

  
	
   

  	
  24 Queen’s Road 

  
	
   

  	
  Weybridge 

  
	
   

  	
  Surrey KT13 9UX

  
	
   

  	
   

  
	
  Fax:

  	
  +44 1932 823 313

  
	
   

  	
   

  
	
  For the
  attention of:

  	
  The Group Company Secretary

  
	
   

  	
   

  
	
  Indalex
  UK Limited

  	
   

  
	
   

  	
   

  
	
  Address:

  	
  Indalex UK Limited 

  
	
   

  	
  Novar House 

  
	
   

  	
  24 Queen’s Road 

  
	
   

  	
  Weybridge 

  
	
   

  	
  Surrey KT13 9UX

  

 

 21
 

 

 

	
  Fax:

  	
  +44 1932 823 313

  
	
   

  	
   

  
	
  For the
  attention of:

  	
  The Group Company Secretary of Novar PLC

  

 

23.3         A party may notify any
other party to this Agreement of a change to its name, relevant addressee,
address or fax number for the purposes of this clause 23, provided that, such
notice shall only be effective on:

(a)           the date specified in
the notice as the date on which the change is to take place; or

(b)           if no date is specified
or the date specified is less than five Business Days after the date on which
notice is given, the date following five Business Days after notice of any
change has been given.

23.4         In proving such service
it shall be sufficient to prove that the envelope containing such notice was
properly addressed and delivered either to the address shown thereon or into
the custody of the postal authorities as a pre-paid recorded delivery, special
delivery or registered post letter, or that the facsimile transmission was made
after obtaining in person or by telephone appropriate evidence of the capacity
of the addressee to receive the same, as the case may be.

GOVERNING LAW AND JURISDICTION

24.1         This Agreement and the
relationship between the parties shall be governed by, and interpreted in
accordance with, the laws of Hong Kong.

24.2         Each of the parties agrees
that the courts of Hong Kong are to have non-exclusive jurisdiction to settle
any disputes (including claims for set-off and counterclaims) which may arise
in connection with the creation, validity, effect, interpretation or
performance of, or the legal relationships established by, this Agreement or
otherwise arising in connection with this Agreement, and for such purposes
irrevocably submit to the non-exclusive jurisdiction of the courts of Hong
Kong.

24.3         The parties irrevocably
waive any objections to the jurisdiction of any court referred to in this
clause.

24.4         The parties irrevocably
agree that a judgment or order of any court referred to in this clause in
connection with this Agreement is conclusive and binding on them and may be
enforced against it in the courts of any other jurisdiction.

24.5         Each of the Purchaser and
Indalex shall at all times maintain an agent for service of process and any
other documents in proceedings in Hong Kong or any other proceedings in
connection with this Agreement. Such agent shall be MK Electric (China) Limited
currently of 9th Floor Grand Centre, 8 Humphreys Avenue,
Tsimshatsui, Kowloon, Hong Kong and any writ, judgment or other notice of legal
process shall be sufficiently served on the Purchaser if delivered to such
agent at its address for the time being.

 22
 

 

24.6         Each of the Purchaser and
Indalex irrevocably agrees with the Vendor that if its process agent ceases to
have an address in Hong Kong or ceases to act as their process agent, they
shall by no later than such cessation appoint a successor process agent and
will deliver to the Vendor within 14 days of such appointment a copy of a
written confirmation to the Vendor by the successor process agent of its
acceptance of appointment. Until such time as service on the Vendor of a
written confirmation of acceptance of appointment of a successor process agent
shall have been completed, service on the process agent last known to the
Vendor at such agent’s last known address shall be deemed sufficient service on
the Purchaser and Indalex.

24.7         The Company shall at all
times maintain an agent for service of process and any other documents in
proceedings in Hong Kong or any other proceedings in connection with this Deed.
Such agent shall be Global Applied Technologies Limited currently of 12th Floor, Railway Plaza, 39 Chatham Road South,
Kowloon, Hong Kong and any writ, judgment or other notice of legal process
shall be sufficiently served on the Company if delivered to such agent at its
address for the time being.

24.8         The Company irrevocably
agrees with the Purchaser and Indalex that if its process agent ceases to have
an address in Hong Kong or ceases to act as its process agent, it shall by no
later than such cessation appoint a successor process agent and will deliver to
the Purchaser and Indalex within 14 days of such appointment a copy of a
written confirmation to the Purchaser and Indalex by the successor process
agent of its acceptance of appointment. Until such time as service on the
Purchaser of a written confirmation of acceptance of appointment of a successor
process agent shall have been completed, service on the process agent last
known to the Purchaser at such agent’s last known address shall be deemed
sufficient service on the Company.

AS WITNESS this Agreement
has been signed on behalf of the parties the day and year first before written.

 23
 

 

SCHEDULE 1

Definitions
and Interpretation

Part A:           Definitions

2001 Company Sales Threshold means
HK$1,867 million;

2001 EBITDA Threshold means HK$375
million;

2001 Gross Sales Threshold means 6,500
metric tonnes;

2002 Company Sales Threshold means
HK$2,053 million;

2002 EBITDA Threshold means HK$431
million;

2002 Gross Sales Threshold means
18,000 metric tonnes;

2003 Company Sales Threshold means
HK$2,258 million;

2003 EBITDA Threshold means HK$474
million;

2003 Gross Sales Threshold means
24,000 metric tonnes;

Accounts means, in relation to any financial year of the Company,
the audited profit and loss account of the Company (and the audited
consolidated profit and loss account, if any, of the Company and its
subsidiaries) in respect of that financial year, together with any notes,
reports or statements included in or annexed to them;

Accounts Date means, in relation to any financial year
of any Group Company, the last day of that financial year;

Adjustment Accounts means, in relation to the Completion
Date, the Completion Accounts, and in relation to a particular date other than
the Completion Date, the audited consolidated balance sheet and the audited
consolidated profit and loss account of the Company and its subsidiaries as at
that date, to be prepared in accordance with clause 6 and Schedule 5; and 2001 Adjustment Accounts, 2002
Adjustment Accounts and
2003 Adjustment Accounts shall have the meanings assigned to them
in clause 7;

Amendment Service Agreements means the agreements relating to the
amendments to be made to the terms of service of each GAT Employee, between
each of the GAT Employees and the Vendor in the agreed form;

Amendments to the Articles means the amendments to the articles of
association of the Company as set out in Schedule 7 and to be adopted by the
Company pursuant to clause 5.4(c);

 24
 

 

Announcement means the announcement to be made
following the date of this Agreement by the Vendor, substantially in the form
attached to this Agreement at Appendix A;

Applicable Proportion means the number of Shares divided by the
total number of shares in issue in the capital of the Company as at Completion;

Business Day means a day (excluding Saturdays and Sundays) on which
banks generally are open in Hong Kong for the transaction of normal banking
business;

Business IP means the registered and material unregistered Intellectual
Property Rights owned by the Group, for which purpose registered includes registrations and applications for registration;

Claim means any claim for breach of a Warranty or any claim under the
Exemption Undertaking;

Companies Ordinance means the Companies Ordinance (Chapter 32
of the Laws of Hong Kong);

Company Sales means, in relation to any particular
financial period, the net invoiced value of goods sold and including service
income from the provision of design and testing services on an accrual basis
for services rendered (in each case after allowance for returns and trade
discounts) and after transaction taxes such as Value Added Tax during the
relevant financial period (as set out in the relevant Adjustment Accounts)
prepared as at that date; and the 2001
Company Sales, the 2002 Company Sales and the 2003 Company Sales shall be the Company Sales in relation to the Company and
its subsidiaries for the financial year ending on 30 June 2001, 30 June 2002
and 30 June 2003 respectively;

Competing Business means any business which carries on, from
time to time, the process of aluminum extrusion, casting, anodising and paint
coating and the fabrication, production or manufacture of aluminum extrusion
products (including the supply and/or distribution of aluminum extrusion
products manufactured by such business but excluding aluminum smelting);

Completion means completion of the sale and purchase of the Shares
under this Agreement in accordance with clause 5;

Completion Accounts means the statement of indebtedness and
the cash and bank balances of the Company and its subsidiaries as at the
Completion Date as reviewed by the Vendor’s Accountants, to be prepared in
accordance with clause 6 and Schedule 5;

Completion Date means the date upon which Completion
takes place;

Completion Net Debt means, as set out in the Completion
Accounts, the outstanding borrowing and indebtedness of the Company and its
subsidiaries (including without limitation all categories of borrowing and
indebtedness set out in Schedule 5, but

 25
 

 

excluding borrowing and indebtedness included within
working capital as defined in Schedule 5) less the cash and bank balances of
the Company and its subsidiaries, from time to time;

Conditions Precedent means the conditions specified in clause
3.1;

Core Agreements means the agreed form agreements as
listed at Part A and Part B Schedule 4;

Corporation Taxation means profits or corporate income tax
payable by the Company and its subsidiaries, from time to time, under all
applicable legislation;

Costs means liabilities, losses, damages, costs (including legal costs)
and expenses (including taxation), in each case of any nature whatsoever;

Deed of Undertaking means the deed to be entered into between
Indalex, Kwong, the Vendor, the Purchaser and the Company immediately after the
signing of this Agreement;

Disclosure Letter means the letter in the agreed form from
the Vendor to the Purchaser executed and delivered immediately before the
signing of this Agreement;

EBITDA means, in relation to any particular financial period, the profits
attributable to shareholders before net interest, Corporation Taxation, depreciation
and amortisation (as set out in the relevant Adjustment Accounts) prepared as
at that date; and the 2001
EBITDA, the 2002 EBITDA and the 2003 EBITDA shall be the EBITDA in relation to the Company and its subsidiaries
for the financial year ending on 30 June 2001, 30 June 2002 and 30 June 2003
respectively;

Environmental Warranties means the representations and warranties
set out in Part C of Schedule 3;

Exemption shall have the meaning assigned to it in paragraph 13.1,
Part D of Schedule 3;

Exemption Undertaking means the
undertaking contained in clause 9.6;

financial year shall be construed in accordance with
section 2(1) of the Companies Ordinance;

GAT Employees means those employees listed in Part B of
Schedule 8;

Group means the Company and the Subsidiaries;

Group Company means any member of the Group;

HK$ means the lawful currency of Hong
Kong;

Hong Kong Listing Rules means the Rules Governing the Listing of
Securities on The Stock Exchange of Hong Kong Limited;

 26
 

 

Hongjia Acquisition means the proposed acquisition from
Hongjia Aluminium Alloy Co., Ltd. by the Company’s wholly owned subsidiary of
certain of the assets of the Hongjia business and to be effected by the Hongjia
Agreements;

Hongjia Agreement means all of those agreements entered
into or to be entered into as detailed out in Part A of Schedule 10;

Hongjia Material Terms  means
those provisions of the Hongjia Agreement which are set out in Part A of
Schedule 10;

Indalex Group means Indalex and each of its
subsidiaries, from time to time;

Indalex Parties means Indalex America Inc., Indalex
Limited, the Purchaser and Indalex West Inc.;

Intellectual Property Rights means patents, trademarks, service marks,
logos, get-up, trade names, internet domain names, rights in designs, copyright
(including rights in computer software) and moral rights, database rights,
semi-conductor topography rights, utility models, rights in know-how and other
intellectual property rights, in each case whether registered or unregistered
and including applications for registration, and all rights or forms of
protection having equivalent or similar effect anywhere in the world;

Internal IT Systems means the information and communications
technologies used by the Group including hardware, proprietary and third party
software, networks, peripherals and associated documentation;

Intra-Group Guarantees means all guarantees, indemnities,
counter-indemnities and letters of comfort of any nature whatsoever:

(a)           given to any third
party by any Group Company in respect of a liability of any member of the
Non-Aluminum Group; and/or (as the context may require)

(b)           given to any third
party by any member of the Non-Aluminum Group in respect of a liability of any
Group Company;

Intra-Group Indebtedness means all debts outstanding between
members of the Group and members of the Non-Aluminum Group (other than
Intra-Group Trading Indebtedness);

Intra-Group Trading Indebtedness means all debts outstanding between
members of the Group and members of the Non-Aluminum Group in respect of intra-group
trading activities in the ordinary and usual course of business;

Key Employees means those employees listed in Part A of
Schedule 8;

Kwong means Kwong Wui Chun of 12th Floor, Railway Plaza, 39 Chatham Road South,
Kowloon, Hong Kong;

 27
 

 

Last Accounts means the Accounts of the Group in
respect of its financial year ended on the Last Accounts Date;

Last Accounts Date  means
30 June 2000;

Leased Properties means the properties leased to the Group
as at the date of this Agreement particulars of which are set out in Schedule
6;

Licences In means the licences of Intellectual Property Rights which
have been granted to the Group;

Licences Out means the licences of Intellectual Property Rights which
have been granted by the Group to third parties;

Management Agreement means the management services agreement
to be entered into between the Company and Global Applied Technologies Limited
in relation to the provision of certain ongoing services following Completion;

Nanhua Acquisition means the proposed acquisition from
Guangdong Nanhua Aluminium Co. Ltd. by the Company’s wholly owned subsidiary of
certain of the assets of the Nanhua business and to be effected by the Nanhua
Agreements;

Nanhua Agreement means all of those agreements entered
into or to be entered into as detailed out in Part B of Schedule 10;

Nanhua Material Terms means those provisions of the Nanhua
Agreement which are set out in Part B of Schedule 10;

Non-Aluminum Group means each company comprising the Vendor’s
Group (but excluding any Group Company);

PRC means the People’s Republic of China;

Property Warranties means the representations and warranties
set out in Part B of Schedule 3;

Purchase Price means the amount specified in clause
5.5(a) and the further payments and adjustments (if any) made under clause 7 of
this Agreement from time to time;

Purchaser Disposal Date  means
the date upon which neither the Purchaser nor any member of the Purchaser’s
Group nor any nominee to which the Shares were transferred at the Purchaser’s
direction on Completion hold, directly or indirectly, any shares in the Company
and have any further actual or contingent right to acquire any shares in the
Company, either issued or unissued, at a future date;

Purchaser’s Accountants means Deloitte & Touche or such other independent firm of
internationally recognised public accountants as may be the Purchaser’s
auditors from time to time;

 28
 

 

Purchaser’s Group means the Purchaser and each of its
subsidiaries, from time to time;

Ratio Threshold means 1 to 0.05;

Sample Accounts means the audited consolidated balance
sheet and profit and loss account of the Company and its subsidiaries as at and
for the financial year ended 30 June 2000 (including the calculation of the
EBITDA, Completion Net Debt, Working Capital and Company Sales as at and for
the year ended 30 June 2000 in relation to the Group) and attached at Appendix
B;

Schedules means Schedules 1 to 10 to
this Agreement and Schedule shall be construed accordingly,

security interest means any security interest of any nature
whatsoever including, without limitation, any mortgage, charge, pledge, lien,
assignment by way of security or other encumbrance;

Service Agreements means each of the service agreements
between each of the Key Employees and the Company in the agreed form;

Shareholders Agreement means the shareholders agreement between
Indalex, the Vendor, the Purchaser and the Company to be entered into on
Completion;

Shares means 541,935 fully paid ordinary shares in the capital of the
Company (representing at the date of this Agreement 26.2 per cent of the issued
share capital of the Company);

Strategic Alliance Agreement means the agreement between, inter alia,
the Indalex Parties and the Vendor relating to the supply of aluminum extrusion
products, dated 6 September 2000;

Strategic Alliance Novation Agreement means the novation agreement to be
entered into by each of the parties to the Strategic Alliance Agreement and the
Company to effect the transfer of certain benefits and burdens of the Strategic
Alliance Agreement from the Vendor to the Company;

Subsidiaries means the companies details of which are set out in Part B
of Schedule 2;

subsidiary and subsidiaries shall be construed in accordance with
sections 2(4) to 2(6) of the Companies Ordinance;

Tax or Taxation means, without limitation, in relation to
Hong Kong, the PRC or elsewhere (a) taxes on income, profits and gains, and (b)
all other taxes, levies, duties, imposts, charges and withholdings of any
nature, including any excise, customs, property, sales, transfer, franchise,
turnover and payroll taxes and other benefits related tax and stamp duties, and
any payment whatsoever which the relevant person may be or become bound to make
to any person as a result of the discharge by that

 29
 

 

person of any tax which the relevant person has failed
to discharge, together with all penalties, charges and interest relating to any
of the foregoing or to any late or incorrect return in respect of any of them,
and regardless of whether such taxes, levies, duties, imposts, charges,
withholdings, penalties and interest are chargeable directly or primarily
against or attributable directly or primarily to the relevant person or any
other person and of whether any amount in respect of them is recoverable from
any other person;

Tax Authority means any taxing or other authority
(wherever located) competent to impose any liability to Tax and Tax Authorities shall be construed accordingly;

Tax Indemnity means the deed of indemnity to be entered
into between Indalex, the Vendor, the Purchaser and each of the Group Companies
upon Completion;

Tax Relief means, unless the context otherwise requires, any
allowance, credit, deduction, exemption or set-off in respect of any Tax or
relevant to the computation of any Tax, or any repayment of or saving of Tax
(including any repayment supplement or interest in respect of Tax) and:

(a)           any reference to the use or set off of a Tax Relief shall be construed
accordingly and shall include use or set off in part; and

(b)           any reference to the loss of a Tax Relief shall include the
non-existence or cancellation of any such Tax Relief, or to such Tax Relief
being available only in a reduced amount;

Tax Warranties means the representations and warranties
set out in Part D of Schedule 3;

Transaction Agreements means this Agreement, each of the Core
Agreements and the Deed of Undertaking;

Vendor’s Accountants means Ernst & Young, or such other
independent firm of internationally recognised public accountants as may be the
Vendor’s auditors from time to time;

Vendor’s Group means the Vendor and each of its
subsidiaries, from time to time;

Vendor Disposal Date means the date upon which neither the
Vendor nor any member of the Vendor’s Group hold, directly or indirectly, any
shares in the Company and have any further actual or contingent right to
acquire any shares in the Company, either issued or unissued, at a future date;

Warranties means the representations and warranties set out in
Schedule 3; and

Working Capital means, in relation to any particular
date, the consolidated trade related current assets (excluding cash and cash
equivalents) less consolidated trade related current liabilities (excluding
bank overdrafts) of the Company and its subsidiaries as set out in the relevant
Adjustment Accounts prepared as at that date;

 30
 

 

and the 2001
Working Capital, the
2002 Working Capital and the 2003 Working Capital shall be the
Working Capital in relation to the Company and its subsidiaries as at 30 June
2001, 30 June 2002 and 30 June 2003, respectively.

 31
 

 

Part
B:           Interpretation

1.             References to persons shall include individuals, bodies
corporate (wherever incorporated), unincorporated associations and
partnerships.

2.             The headings are inserted for convenience only and
shall not affect the construction of this Agreement.

3.             References to one gender include all
gender.

4.             Any reference to an enactment or statutory provision is a reference to
it as it may have been, or may from time to time be, amended, modified,
consolidated or re-enacted.

5.             Any statement
qualified by the expression to the
best knowledge of the Vendor or
so far as the Vendor is aware or
any similar expression shall be deemed to include an additional statement that
it has been made after due and careful enquiry and shall be deemed also to
include the knowledge of Kwong, Michael Tse and Waltery Law, but so that the
expression so far as the Vendor is
actually aware shall be construed as referring only to the
actual knowledge (and not any other knowledge) of Kwong, Michael Tse and
Waltery Law.

6.             Any reference to a
document in the agreed form is, in relation to agreements listed in
Part A of Schedule 4, to the form of the relevant document and, in relation to
the agreements listed in Part B of Schedule 4, to the form or substantially the
form of the relevant document, agreed between the Vendor and the Purchaser and
for the purpose of identification initialled by each of them or on their behalf
(in each case with such amendments as may be agreed by or on behalf of the
Vendor and the Purchaser).

 32
 

 

SCHEDULE 2

The
Company And the Subsidiaries

Part A:           Details of the Company

	
  1.

  	
  Name:

  	
  China Aluminum Group Holdings (BVI) Limited

  
	
   

  	
   

  	
   

  
	
  2.

  	
  Date of Incorporation:

  	
  23 August 1994

  
	
   

  	
   

  	
   

  
	
  3.

  	
  Place of Incorporation:

  	
  British Virgin Islands

  
	
   

  	
   

  	
   

  
	
  4.

  	
  Class of Company:

  	
  Private Limited Company

  
	
   

  	
   

  	
   

  
	
  5.

  	
  Registered Number:

  	
  IBC No. 126690

  
	
   

  	
   

  	
   

  
	
  6.

  	
  Registered Office:

  	
  c/o Caribbean Corporate Services Limited

  Omar Hodge Building

  Wickhams Cay I

  P.O. Box 362

  Road Town

  Tortola

  BVI

  
	
   

  	
   

  	
   

  
	
  7.

  	
  Directors:

  	
  Michael Tse 

  Kwong Wui Chun 

  Hung Pann-Yi, Danny

  
	
   

  	
   

  	
   

  
	
  8.

  	
  Secretary:

  	
  CCM Corporate Services Limited

  
	
   

  	
   

  	
   

  
	
  9.

  	
  Authorised Capital:

  	
  US$50,000.00, divided into 5 million shares of
  nominal value US$0.01 each.

  
	
   

  	
   

  	
   

  
	
  10.

  	
  Issued Capital:

  	
  US$20,684.53 divided into 2,068,453 ordinary shares
  of nominal value US$0.01 each.

  
	
   

  	
   

  	
   

  
	
  11.

  	
  Registered Shareholders:

  	
  Global Applied Technologies Holdings Limited

  
	
   

  	
   

  	
   

  
	
  12.

  	
  Accounting Reference Date:

  	
  30 June

  
	
   

  	
   

  	
   

  
	
  13.

  	
  Auditors:

  	
  Ernst & Young

  

 

 33
 

 

 

	
  14.

  	
  Subsidiaries:

  	
  Long Hing Profits Limited

  
	
   

  	
   

  	
  Majestic Holdings Limited

  
	
   

  	
   

  	
  Nanhai Panasia Metal Spraying Co., Limited

  
	
   

  	
   

  	
  Asia Aluminum Manufacturing Co., Limited

  
	
   

  	
   

  	
  Nanhai Asia Aluminium Factory Co., Limited

  
	
   

  	
   

  	
  Pavillion Services Limited

  
	
   

  	
   

  	
  Xinya Holdings Limited

  
	
   

  	
   

  	
  Nanhai Xinya Aluminium & Stainless Steel Co.,
  Limited

  
	
   

  	
   

  	
  China Aluminum Union Limited

  

 

 34

 

Part B:           Details of Subsidiaries

	
  1.

  	
  Name:

  	
  Long Hing Profits Limited

  
	
   

  	
   

  	
   

  
	
  2.

  	
  Date of Incorporation:

  	
  5 October 1998

  
	
   

  	
   

  	
   

  
	
  3.

  	
  Place of Incorporation:

  	
  British Virgin Islands

  
	
   

  	
   

  	
   

  
	
  4.

  	
  Class of Company:

  	
  Private limited company

  
	
   

  	
   

  	
   

  
	
  5.

  	
  Registered Number:

  	
  296591

  
	
   

  	
   

  	
   

  
	
  6.

  	
  Registered Office:

  	
  Trident Trust Company (BVI) Limited

  Trident Chambers 

  P.O. Box 146 

  Road Town 

  Tortola 

  BVI

  
	
   

  	
   

  	
   

  
	
  7.

  	
  Directors:

  	
  Kwong Wui Chun

  
	
   

  	
   

  	
   

  
	
  8.

  	
  Secretary:

  	
  CCM Corporate Services Limited

  
	
   

  	
   

  	
   

  
	
  9.

  	
  Authorised Capital:

  	
  US$50,000.00 divided into 50,000 shares of nominal
  value US$1.00 each.

  
	
   

  	
   

  	
   

  
	
  10.

  	
  Issued Capital:

  	
  US$1.00 divided into 1 share of nominal value
  US$1.00.

  
	
   

  	
   

  	
   

  
	
  11.

  	
  Registered Shareholders:

  	
  China Aluminum Group Holdings (BVI) Limited

  
	
   

  	
   

  	
   

  
	
  12.

  	
  Accounting Reference Date:

  	
  30 June

  
	
   

  	
   

  	
   

  
	
  13.

  	
  Auditors:

  	
  Ernst & Young

  
	
   

  	
   

  	
   

  
	
  14.

  	
  Subsidiaries:

  	
  Majestic Holdings Limited 

  Nanhai Panasia Metal Spraying Co., Limited

  

 

 35
 

 

 

	
  1.

  	
  Name:

  	
  Majestic Holdings Limited

  
	
   

  	
   

  	
   

  
	
  2.

  	
  Date of Incorporation:

  	
  28 May 1997

  
	
   

  	
   

  	
   

  
	
  3.

  	
  Place of Incorporation:

  	
  Hong Kong

  
	
   

  	
   

  	
   

  
	
  4.

  	
  Class of Company:

  	
  Private limited company

  
	
   

  	
   

  	
   

  
	
  5.

  	
  Registered Number:

  	
  609774

  
	
   

  	
   

  	
   

  
	
  6.

  	
  Registered Office:

  	
  12th Floor, Railway
  Plaza 

  39 Chatham Road South 

  Tsimshatsui 

  Kowloon 

  Hong Kong

  
	
   

  	
   

  	
   

  
	
  7.

  	
  Directors:

  	
  Kwong Wui Chun 

  Zhong Jianqiu 

  Hung Pann-Yi, Danny

  
	
   

  	
   

  	
   

  
	
  8.

  	
  Secretary:

  	
  King Secretaries Limited

  
	
   

  	
   

  	
   

  
	
  9.

  	
  Authorised Capital:

  	
  HK$60,000,000.00 divided into 60,000,000 ordinary
  shares of nominal value HK$1.00 each.

  
	
   

  	
   

  	
   

  
	
  10.

  	
  Issued Capital:

  	
  HK$60,000,000.00 divided into 60,000,000 ordinary
  shares of nominal value HK$1.00 each.

  
	
   

  	
   

  	
   

  
	
  11.

  	
  Registered Shareholders:

  	
  Long Hing Profits Limited – 9,999 shares Kwong Wui
  Chun – 1 share

  
	
   

  	
   

  	
   

  
	
  12.

  	
  Accounting Reference Date:

  	
  30 June

  
	
   

  	
   

  	
   

  
	
  13.

  	
  Auditors:

  	
  Ernst & Young

  
	
   

  	
   

  	
   

  
	
  14.

  	
  Subsidiaries:

  	
  Nanhai Panasia Metal Spraying Co., Limited

  

 

 36
 

 

 

	
  1.

  	
  Name:

  	
  Asia Aluminum Manufacturing Co., Limited

  
	
   

  	
   

  	
   

  
	
  2.

  	
  Date of Incorporation:

  	
  23 August 1994

  
	
   

  	
   

  	
   

  
	
  3.

  	
  Place of Incorporation:

  	
  Hong Kong

  
	
   

  	
   

  	
   

  
	
  4.

  	
  Class of Company:

  	
  Private limited company

  
	
   

  	
   

  	
   

  
	
  5.

  	
  Registered Number:

  	
  489557

  
	
   

  	
   

  	
   

  
	
  6.

  	
  Registered Office:

  	
  12th Floor, Railway
  Plaza 

  39 Chatham Road South 

  Tsimshatsui 

  Kowloon 

  Hong Kong

  
	
   

  	
   

  	
   

  
	
  7.

  	
  Directors:

  	
  Kwong Wui Chun 

  Hung Pann-Yi, Danny 

  Michael Tse

  
	
   

  	
   

  	
   

  
	
  8.

  	
  Secretary:

  	
  CCM Corporate Services Limited

  
	
   

  	
   

  	
   

  
	
  9.

  	
  Authorised Capital:

  	
  HK$10,000.00 divided into 10,000 ordinary shares of
  nominal value HK$1.00 each.

  
	
   

  	
   

  	
   

  
	
  10.

  	
  Issued Capital:

  	
  HK$2.00 divided into 2 ordinary shares of nominal
  value HK$1.00.

  
	
   

  	
   

  	
   

  
	
  11.

  	
  Registered Shareholders:

  	
  China Aluminum Group Holdings (BVI) Limited – 1
  share

  Li Chuk Kwan – 1 share

  
	
   

  	
   

  	
   

  
	
  12.

  	
  Accounting Reference Date:

  	
  30 June

  
	
   

  	
   

  	
   

  
	
  13.

  	
  Auditors:

  	
  Ernst &
  Young

  
	
   

  	
   

  	
   

  
	
  14.

  	
  Subsidiaries:

  	
  Nanhai Asia Aluminium Factory Co., Limited

  

 

 37
 

 

 

	
  1.

  	
  Name:

  	
  Pavillion Services Limited

  
	
   

  	
   

  	
   

  
	
  2.

  	
  Date of Incorporation:

  	
  3 January 1996

  
	
   

  	
   

  	
   

  
	
  3.

  	
  Place of Incorporation:

  	
  British Virgin Islands

  
	
   

  	
   

  	
   

  
	
  4.

  	
  Class of Company:

  	
  International Business Company

  
	
   

  	
   

  	
   

  
	
  5.

  	
  Registered Number:

  	
  IBC No. 171230

  
	
   

  	
   

  	
   

  
	
  6.

  	
  Registered Office:

  	
  c/o Offshore Incorporations Limited 

  P.O. Box 957 

  Offshore Incorporations Centre 

  Road Town 

  Tortola 

  BVI

  
	
   

  	
   

  	
   

  
	
  7.

  	
  Directors:

  	
  Kwong Wui Chun 

  Zhong Jianqiu

  
	
   

  	
   

  	
   

  
	
  8.

  	
  Secretary:

  	
  CCM Corporate Services Limited

  
	
   

  	
   

  	
   

  
	
  9.

  	
  Authorised Capital:

  	
  US$50,000.00 divided into 50,000 shares of nominal
  value US$1.00 each.

  
	
   

  	
   

  	
   

  
	
  10.

  	
  Issued Capital:

  	
  US$200.00 divided into 200 ordinary shares of
  nominal value US$1.00 each.

  
	
   

  	
   

  	
   

  
	
  11.

  	
  Registered Shareholders:

  	
  China Aluminum Group Holdings (BVI) Limited

  
	
   

  	
   

  	
   

  
	
  12.

  	
  Accounting Reference Date:

  	
  30 June

  
	
   

  	
   

  	
   

  
	
  13.

  	
  Auditors:

  	
  Ernst & Young

  
	
   

  	
   

  	
   

  
	
  14.

  	
  Subsidiaries:

  	
  Xinya Holdings Limited 

  Nanhai Xinya Aluminium & Stainless Steel Co., Limited

  

 

 38
 

 

 

	
  1.

  	
  Name:

  	
  Xinya Holdings Limited

  
	
   

  	
   

  	
   

  
	
  2.

  	
  Date of Incorporation:

  	
  6 June 1997

  
	
   

  	
   

  	
   

  
	
  3.

  	
  Place of Incorporation:

  	
  Hong Kong

  
	
   

  	
   

  	
   

  
	
  4.

  	
  Class of Company:

  	
  Private limited company

  
	
   

  	
   

  	
   

  
	
  5.

  	
  Registered Number:

  	
  611741

  
	
   

  	
   

  	
   

  
	
  6.

  	
  Registered Office:

  	
  12th Floor 

  Railway Plaza 

  39 Chatham Road South 

  Tsimshatsui 

  Kowloon 

  Hong Kong

  
	
   

  	
   

  	
   

  
	
  7.

  	
  Directors:

  	
  Kwong Wui Chun 

  Zhong Jianqiu

  
	
   

  	
   

  	
   

  
	
  8.

  	
  Secretary:

  	
  CCM Corporate Services Limited

  
	
   

  	
   

  	
   

  
	
  9.

  	
  Authorised Capital:

  	
  HK$10,000.00 divided into 10,000 ordinary shares of
  nominal value HK$1.00 each.

  
	
   

  	
   

  	
   

  
	
  10.

  	
  Issued Capital:

  	
  HK$2.00 divided into 2 ordinary shares of nominal
  value HK$1.00 each.

  
	
   

  	
   

  	
   

  
	
  11.

  	
  Registered Shareholders:

  	
  Pavillion Services Limited – 1 share Hung Pann Yi –
  1 share

  
	
   

  	
   

  	
   

  
	
  12.

  	
  Accounting Reference Date:

  	
  30 June

  
	
   

  	
   

  	
   

  
	
  13.

  	
  Auditors:

  	
  Ernst & Young

  
	
   

  	
   

  	
   

  
	
  14.

  	
  Subsidiaries:

  	
  Nanhai Xinya Aluminium & Stainless Steel Co.,
  Limited

  

 

 39
 

 

 

	
  1.

  	
  Name:

  	
  Nanhai Panasia Metal Spraying Co., Limited

  
	
   

  	
   

  	
   

  
	
  2.

  	
  Date of Incorporation :

  	
  28 October 1997

  
	
   

  	
   

  	
   

  
	
  3.

  	
  Place of Incorporation:

  	
  PRC

  
	
   

  	
   

  	
   

  
	
  4.

  	
  Class of
  Company:

  	
  Wholly foreign owned enterprise

  
	
   

  	
   

  	
   

  
	
  5.

  	
  Business Licence Number:

  	
  Qi Du Yue Nan Zong Zi Di 001113 Hao

  
	
   

  	
   

  	
   

  
	
  6.

  	
  Registered Office:

  	
  Zhong Bian Administrative Zone 

  Dali District, Nanhai City 

  Guangdong Province, PRC

  
	
   

  	
   

  	
   

  
	
  7.

  	
  Directors:

  	
  Zhong Jianqiu 

  Kwong Wui Chun 

  Michael Tse 

  Wang Yuxia 

  Kuang Shunfen

  
	
   

  	
   

  	
   

  
	
  8.

  	
  Secretary:

  	
  n/a

  
	
   

  	
   

  	
   

  
	
  9.

  	
  Registered Capital:

  	
  US$2,900,000

  
	
   

  	
   

  	
   

  
	
  10.

  	
  Total Investment:

  	
  US$2,900,000

  
	
   

  	
   

  	
   

  
	
  11.

  	
  Registered Shareholders:

  	
  Majestic Holdings Limited

  
	
   

  	
   

  	
   

  
	
  12.

  	
  Accounting Reference Date:

  	
  31 December

  
	
   

  	
   

  	
   

  
	
  13.

  	
  Auditors:

  	
  Nanhai Junlang Certified Public Accountants Finn
  Co., Ltd.

  
	
   

  	
   

  	
   

  
	
  14.

  	
  Subsidiaries:

  	
  n/a

  

 

 40
 

 

 

	
  1.

  	
  Name:

  	
  Nanhai Asia Aluminium Factory Co., Limited

  
	
   

  	
   

  	
   

  
	
  2.

  	
  Date of Incorporation:

  	
  1 September 1992

  
	
   

  	
   

  	
   

  
	
  3.

  	
  Place of Incorporation:

  	
  PRC

  
	
   

  	
   

  	
   

  
	
  4.

  	
  Class of Company:

  	
  Wholly foreign owned enterprise

  
	
   

  	
   

  	
   

  
	
  5.

  	
  Business Licence Number:

  	
  Qi Du Yue Nan Zong Zi Di 001008 Hao

  
	
   

  	
   

  	
   

  
	
  6.

  	
  Registered Office:

  	
  Guijiang Highway, Middle Section 

  Dali Town, Nanhai City 

  Guangdong Province, PRC

  
	
   

  	
   

  	
   

  
	
  7.

  	
  Directors:

  	
  Kwong Wui Chun 

  Michael Tse 

  Hung Pann-Yi, Danny

  
	
   

  	
   

  	
   

  
	
  8.

  	
  Secretary:

  	
  n/a

  
	
   

  	
   

  	
   

  
	
  9.

  	
  Registered Capital:

  	
  US$34,790,000

  
	
   

  	
   

  	
   

  
	
  10.

  	
  Total Investment:

  	
  US$44,110,000

  
	
   

  	
   

  	
   

  
	
  11.

  	
  Registered Shareholders:

  	
  Asia Aluminum Manufacturing Company Limited

  
	
   

  	
   

  	
   

  
	
  12.

  	
  Accounting Reference Date:

  	
  31 December

  
	
   

  	
   

  	
   

  
	
  13.

  	
  Auditors:

  	
  Nanhai Junlang Certified Public Accountants Firm
  Co., Ltd.

  
	
   

  	
   

  	
   

  
	
  14.

  	
  Subsidiaries:

  	
  n/a

  

 

 41
 

 

 

	
  1.

  	
  Name:

  	
  Nanhai Xinya Aluminium & Stainless Steel Co., Limited

  
	
   

  	
   

  	
   

  
	
  2.

  	
  Date of Incorporation:

  	
  5 December 1995

  
	
   

  	
   

  	
   

  
	
  3.

  	
  Place of Incorporation:

  	
  PRC

  
	
   

  	
   

  	
   

  
	
  4.

  	
  Class of Company:

  	
  Wholly foreign owned enterprise

  
	
   

  	
   

  	
   

  
	
  5.

  	
  Business Licence Number:

  	
  Qi Du Yue Nan Zong Zi Di 000395 Hao

  
	
   

  	
   

  	
   

  
	
  6.

  	
  Registered Office:

  	
  Guijiang Highway, Middle Section 

  Dali Town, Nanhai City 

  Guangdong Province, PRC

  
	
   

  	
   

  	
   

  
	
  7.

  	
  Directors:

  	
  Kwong Wui Chun 

  Zhong Jianqiu 

  Hung Pann-Yi, Danny

  
	
   

  	
   

  	
   

  
	
  8.

  	
  Secretary:

  	
  n/a

  
	
   

  	
   

  	
   

  
	
  9.

  	
  Registered Capital:

  	
  US$11,399,000

  
	
   

  	
   

  	
   

  
	
  10.

  	
  Total Investment:

  	
  US$11,700,000

  
	
   

  	
   

  	
   

  
	
  11.

  	
  Registered Shareholders:

  	
  Xinya Holdings Limited

  
	
   

  	
   

  	
   

  
	
  12.

  	
  Accounting Reference Date:

  	
  31 December

  
	
   

  	
   

  	
   

  
	
  13.

  	
  Auditors:

  	
  Nanhai Junlang Certified Public Accountants Firm
  Co., Ltd.

  
	
   

  	
   

  	
   

  
	
  14.

  	
  Subsidiaries:

  	
  n/a

  

 

 42
 

 

 

	
  1.

  	
  Name:

  	
  China Aluminum Union Limited

  
	
   

  	
   

  	
   

  
	
  2.

  	
  Date of Incorporation:

  	
  7 August 2000

  
	
   

  	
   

  	
   

  
	
  3.

  	
  Place of Incorporation:

  	
  Hong Kong

  
	
   

  	
   

  	
   

  
	
  4.

  	
  Class of Company:

  	
  Private limited company

  
	
   

  	
   

  	
   

  
	
  5.

  	
  Registered Number:

  	
  726620

  
	
   

  	
   

  	
   

  
	
  6.

  	
  Registered Office:

  	
  12th Floor 

  Railway Plaza 

  39 Chatham Road South 

  Tsimshatsui 

  Kowloon 

  Hong Kong

  
	
   

  	
   

  	
   

  
	
  7.

  	
  Directors:

  	
  Kwong Wui Chun 

  Michael Tse

  
	
   

  	
   

  	
   

  
	
  8.

  	
  Secretary:

  	
  CCM Corporate Services Limited

  
	
   

  	
   

  	
   

  
	
  9.

  	
  Authorised Capital:

  	
  HK$10,000.00 divided into 10,000 ordinary shares of
  nominal value HK$1.00 each.

  
	
   

  	
   

  	
   

  
	
  10.

  	
  Issued Capital:

  	
  HK$10,000.00 divided into 10,000 ordinary shares of
  nominal value HK$1.00.

  
	
   

  	
   

  	
   

  
	
  11.

  	
  Registered Shareholders:

  	
  China Aluminum Group Holdings (BVI) 

  Limited – 9,999 shares 

  Kwong Wui Chun – 1 share

  
	
   

  	
   

  	
   

  
	
  12.

  	
  Accounting Reference Date:

  	
  30 June

  
	
   

  	
   

  	
   

  
	
  13.

  	
  Auditors:

  	
  Ernst & Young

  
	
   

  	
   

  	
   

  
	
  14.

  	
  Subsidiaries:

  	
  n/a

  

 

 43
 

 

 

	
  1.

  	
  Name:

  	
  Huge Spot Holdings Limited

  
	
   

  	
   

  	
   

  
	
  2.

  	
  Date of Incorporation:

  	
  6 February 2001

  
	
   

  	
   

  	
   

  
	
  3.

  	
  Place of Incorporation:

  	
  British Virgin Islands

  
	
   

  	
   

  	
   

  
	
  4.

  	
  Class of Company:

  	
  Private Limited Company

  
	
   

  	
   

  	
   

  
	
  5.

  	
  Registered Number:

  	
  IBC No. 430835

  
	
   

  	
   

  	
   

  
	
  6.

  	
  Registered Office:

  	
  Akara Buildings, 24 De Castro Street, 

  Wickhams Cay, Road Town, Tortola, 

  British Virgin Islands.

  
	
   

  	
   

  	
   

  
	
  7.

  	
  Directors:

  	
  Kwong Wui Chun 

  Hung Pann Yi, Danny

  
	
   

  	
   

  	
   

  
	
  8.

  	
  Secretary:

  	
  Santo Management Limited

  
	
   

  	
   

  	
   

  
	
  9.

  	
  Authorised Capital:

  	
  US$50,000.00, divided into 50,000 shares of nominal
  value US$1.00.

  
	
   

  	
   

  	
   

  
	
  10.

  	
  Issued Capital:

  	
  US$1.00 divided into 1 share of nominal value
  US$1.00

  
	
   

  	
   

  	
   

  
	
  11.

  	
  Registered Shareholders:

  	
  China Aluminum Group Holdings (BVI) Limited

  
	
   

  	
   

  	
   

  
	
  12.

  	
  Accounting Reference Date:

  	
  30 June

  
	
   

  	
   

  	
   

  
	
  13.

  	
  Auditors:

  	
  Ernst & Young

  

 

 44
 

 

 

	
  1.

  	
  Name:

  	
  Kar Yip Holdings Limited

  
	
   

  	
   

  	
   

  
	
  2.

  	
  Date of Incorporation:

  	
  6 February 2001

  
	
   

  	
   

  	
   

  
	
  3.

  	
  Place of Incorporation:

  	
  British Virgin Islands

  
	
   

  	
   

  	
   

  
	
  4.

  	
  Class of Company:

  	
  Private Limited Company

  
	
   

  	
   

  	
   

  
	
  5.

  	
  Registered Number:

  	
  IBC No. 430837

  
	
   

  	
   

  	
   

  
	
  6.

  	
  Registered Office:

  	
  Akara Buildings, 24 De Castro Street, 

  Wickhams Cay, Road Town, Tortola, 

  British Virgin Islands.

  
	
   

  	
   

  	
   

  
	
  7.

  	
  Directors:

  	
  Kwong Wui Chun 

  Hung Pann Yi, Danny

  
	
   

  	
   

  	
   

  
	
  8.

  	
  Secretary:

  	
  Santo Management Limited

  
	
   

  	
   

  	
   

  
	
  9.

  	
  Authorised Capital:

  	
  US$50,000.00, divided into 50,000 shares of nominal
  value US$1.00.

  
	
   

  	
   

  	
   

  
	
  10.

  	
  Issued Capital:

  	
  US$1.00 divided into 1 share of nominal value
  US$1.00

  
	
   

  	
   

  	
   

  
	
  11.

  	
  Registered Shareholders:

  	
  China Aluminum Group Holdings (BVI) Limited

  
	
   

  	
   

  	
   

  
	
  12.

  	
  Accounting Reference Date:

  	
  30 June

  
	
   

  	
   

  	
   

  
	
  13.

  	
  Auditors:

  	
  Ernst & Young

  

 

 45

 

SCHEDULE 3

The Warranties

Part A:           General

INFORMATION

Information provided by Vendor

1.1           The information
provided to the Purchaser in writing during the preparation and negotiation of
this Agreement was provided by the Vendor (or its advisers) in good faith and,
to the best knowledge of the Vendor, is in all material respects true, accurate
and not misleading.

Disclosure

1.2(a)      There are fully and
accurately in all material respects set out in the Disclosure Letter all facts
and matters which are necessary to qualify the statements set out in this
Schedule in order that such statements, as so qualified, are true, accurate in
all material respects and not misleading in any material respect.

(b)           All information set out
in the Disclosure Letter is true, accurate in all material respects and not
misleading in any material respect.

THE VENDOR AND THE GROUP

Authorisations

2.1           The Vendor has obtained
all corporate authorisations and all other applicable governmental, statutory,
regulatory or other consents, licences, waivers or exemptions required to
empower it to enter into and to perform its obligations under this Agreement.

The Company and the Shares

2.2(a)      All of the Shares are
fully-paid or properly credited as fully-paid and the Vendor is the sole legal
and beneficial owner of them free from all security interests, options,
equities, claims or other third party rights (including rights of pre-emption)
of any nature whatsoever.

(b)           The information in
respect of the Company set out in Part A of Schedule 2 is true and accurate.

 46
 

 

The
Subsidiaries

2.3(a)      The Company is (or a
Subsidiary is) the sole legal and beneficial owner of the entire issued share
capital of each of the Subsidiaries free from all security interests, options,
equities, claims or other third party rights (including, without limitation,
rights of pre-emption) of any nature whatsoever.

(b)           The information in
respect of each of the Subsidiaries set out in Part B of Schedule 2 is true and
accurate.

Other Interests

2.4           No Group Company owns
or has any interest of any nature whatsoever in any shares, debentures or other
securities issued by any undertaking other than the Subsidiaries.

FINANCIAL MATTERS

Accounts

3.1(a)      The Last Accounts give a
true and fair view of the state of affairs of the Company and its subsidiaries
as at the Last Accounts Date and of their results for the financial year ended
on the Last Accounts Date.

(b)           The Completion Accounts
will give a true and fair view of the Completion Net Debt of the Group as at
Completion. There will be no liabilities (accrued, contingent or otherwise) of
the Group as at Completion except to the extent that provision or reserve is
made in the Completion Accounts.

(c)           Without limiting the
generality of paragraph (a):

(i)        the Last Accounts either
make appropriate provision for or disclose all significant liabilities (whether
actual, contingent or disputed and including finance lease commitments and
pension liabilities), all significant outstanding capital commitments and all
bad or doubtful debts of the Company and its subsidiaries as at the Last
Accounts Date, in each case in accordance with generally accepted accounting
principles;

(ii)       the Accounts for each of
the last three financial years ended on the Last Accounts Date were prepared
under the historical convention, complied with the requirements of all relevant
laws then in force and with all statements of standard accounting practice (or
financial reporting standards) and generally accepted accounting principles of
Hong Kong then in force;

(iii)      any slow moving stock
included in the Last Accounts has been written down appropriately and any
redundant or obsolete stock has been wholly written off, and in no case did the
value attributed to any stock

 47
 

 

included in the Last
Accounts exceed the lower of cost and net realisable value as at the Last
Accounts Date;

(iv)      all work-in-progress valued
in the Last Accounts was valued at figures not exceeding the amounts which
could in the circumstances existing at the Last Accounts Date reasonably be
expected to be realised in the normal course of carrying on the business;

(v)       the method of valuing stock
and work-in-progress and the basis of depreciation and amortisation adopted in
the Last Accounts were the same as those adopted in the Accounts for each of
the two financial years preceding the financial year ended on the Last Accounts
Date;

(vi)      the rate of depreciation
adopted in the Accounts for each of the three financial years ended on the Last
Accounts Date was sufficient for each of the fixed assets to be written down to
nil by the end of its useful life;

(vii)     except as stated in its
Accounts, no changes in the accounting policies were made in any of the three
financial years ended on the Last Accounts Date; and

(viii)    the results shown by the
Accounts for each of the three financial years ended on the Last Accounts Date
were not (except as therein disclosed) affected by any extraordinary or
exceptional item or by any other factor rendering such results for all or any
of such periods unusually high or low.

Management Accounts

3.2           The unaudited
management accounts of each Group Company for all periods ended after the Last
Accounts Date were properly prepared in a manner consistent with that adopted
in the preparation of its management accounts for all periods ended during the
twenty four months prior to the Last Accounts Date.

Position since Last Accounts Date

3.3(a)      Since the Last Accounts Date
there has been no material adverse change in the financial or trading position
or (save to the extent that the same would be likely to affect to a similar
extent generally all companies carrying on similar businesses in Hong Kong) in
the prospects of any Group Company and no event, fact or matter has occurred
which is likely to give rise to any such change.

(b)           Since the Last Accounts
Date:

(i)        the business of each Group
Company has been carried on in the ordinary and usual course and no Group
Company has made or agreed to make any payment other than routine payments in
the ordinary and usual course of trading;

 48
 

 

(ii)       save for the Strategic
Alliance Agreement, no contract, liability or commitment (whether in respect of
capital expenditure or otherwise) has been entered into by any Group Company
which is of a long term or unusual nature or which involved or could involve an
obligation of a material nature or magnitude;

(iii)      save pursuant to the Nanhua
Agreement and the Hongjia Agreement, no Group Company has (whether in the
ordinary and usual course of business or otherwise) acquired or disposed of, or
agreed to acquire or dispose of, any business or any asset having a value in
excess of HK$1 million;

(iv)      no debtor has been released
by any Group Company on terms that it pays less than the book value of its debt
and no debt in excess of HK$100,000 owing to any Group Company has been deferred,
subordinated or written off or has proved to any extent irrecoverable;

(v)       no resolution of the
members of any Group Company has been passed whether in general meeting or
otherwise (other than resolutions relating to the routine business of annual general
meetings); and

(vi)      the business of each Group
Company has not been affected by any abnormal factor not affecting to a similar
extent generally all companies carrying on similar businesses.

Accounting and other Records

3.4           The statutory books,
books of account and other records of each Group Company:

(a)           up-to-date and have
been maintained in accordance with all applicable laws and generally accepted
accounting practices on a proper and consistent basis;

(b)           comprise complete and
accurate records of all information required to be recorded therein; and

(c)           are in its possession
or under its control together with all documents of title and executed copies
of all existing agreements to which the relevant Group Company is a party.

DEBT POSITION

Debts owed to the Group

4.1(a)      There are no debts owing to
any Group Company as at 1 March 2001 other than:

 49
 

 

(i)        the Intra-Group
Indebtedness details of which are set out in the Disclosure Letter; and

(ii)       other trade debts incurred
in the ordinary and usual course of business which do not exceed HK$1 million
in aggregate for the Group as a whole (and none of which exceeds HK$100,000)
save for trade debts arising out of any contract for the purchase or sale of
aluminum ingots or scrap, normal trade or credit facilities or the sale of the
Group’s products in the ordinary and normal course.

(b)           The book debts shown in
the Last Accounts have realised their nominal amount less any specific
provision for bad or doubtful debts included in such accounts. The book debts
incurred since the Last Accounts Date and which are outstanding as at the date
of this Agreement will realise within six months from the due date not less
than 95 per cent, of their nominal amount.

Debts owed by the Group

4.2(a)      No Group Company has
outstanding any borrowing or indebtedness in the nature of borrowing
(including, without limitation, any indebtedness for moneys borrowed or raised
under any acceptance credit, bond, note, bill of exchange or commercial paper,
finance lease, hire purchase agreement, trade bills or facilities (in each case
other than those on terms normally obtained), forward sale or purchase
agreement or conditional sale agreement or other transaction having the
commercial effect of a borrowing) other than:

(i)        Intra-Group Indebtedness
which does not exceed HK$1 million in aggregate for the Group as a whole and
details of which are set out in the Disclosure Letter; and

(ii)       moneys borrowed from third
parties of a non-trade nature (which do not exceed HK$1 million in aggregate
for the Group as a whole) and details of which as at 1 March 2001 are set out
in the Disclosure Letter.

(b)           No Group Company has
received any notice to repay under any agreement relating to any borrowing or
indebtedness in the nature of borrowing which is repayable on demand.

REGULATORY MATTERS

Licences

5.1(a)      Each Group Company has
obtained all licences, permissions, authorisations and consents required for
carrying on its business effectively in the places and in the manner in which
such business is now carried on.

(b)           The licences,
permissions, authorisations and consents referred to in paragraph (a) are in
full force and effect, are not limited in duration or subject

 50
 

 

to any unusual or onerous conditions and have been
complied with in all respects.

(c)           To the best knowledge
of the Vendor, there are no circumstances which indicate that any of the
licences, permissions, authorisations or consents referred to in paragraph (a)
will or are likely to be revoked or not renewed, in whole or in part, in the
ordinary course of events (whether as a result of the acquisition of the Shares
by the Purchaser or otherwise).

Compliance with Laws

5.2(a)      Each Group Company has
conducted its business and corporate affairs in accordance with its Memorandum
and Articles of Association and in all material respects with all applicable
laws and regulations (whether of Hong Kong or any other jurisdiction).

(b)           No Group Company is in
default of any order, decree or judgment of any court or any governmental or
regulatory authority (whether of Hong Kong or any other jurisdiction).

THE GROUP’S ASSETS

Ownership

6.1(a)      For the purpose of this
Warranty 6.1, assets shall not include the Leased Properties,
to which the provisions of Part B of this Schedule shall apply.

(b)           Each of the assets
included in the Last Accounts or acquired since the Last Accounts Date (other
than assets sold in the ordinary course of business) is the absolute property
of the Group. Those assets are not the subject of any security interest (other
than those the existence of which the Vendor is not actually aware and arise or
are imposed by law) or any assignment, equity, option, right of pre-emption,
royalty, factoring arrangement, leasing or hiring agreement, hire purchase
agreement, conditional sale or credit sale agreement, agreement for payment on
deferred terms or any similar agreement or arrangement (or any agreement or
obligation, including a conditional obligation, to create or enter into any of
the foregoing) except for:

(i)        any hire or lease
agreement in the ordinary course of business involving expenditure of less than
HK$1 million per annum (where the aggregate expenditure of the Group under all
such agreements is less than HK$5 million per annum);

(ii)       title retention provisions
in respect of goods and materials supplied to the Group in the ordinary course
of business; or

(iii)      liens arising in the
ordinary course of business by operation of law.

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Possession and Third Party Facilities

6.2           All of the assets owned
by each Group Company, or in respect of which any Group Company has a right of
use, are in the possession or under the control of that Group Company.

Condition

6.3           All the plant,
machinery, equipment and vehicles used by each Group Company are in a good
state of repair and have been regularly and properly maintained in accordance
with appropriate technical specifications, safety regulations and the terms and
conditions of any applicable agreement.

Insurances

6.4(a)      There is set out in the
Disclosure Letter a summary of the insurances maintained by or covering members
of the Group. Such insurances are in full force and effect and, to the best
knowledge of the Vendor, there are no circumstances which might lead to any
liability under such insurance being avoided by the insurers or the premiums
being increased and Completion will not have the effect of terminating, or
entitling any insurer to terminate, cover under any such insurance.

(b)           Except for claims under
medical insurances taken out by the Group, no claim is outstanding by any Group
Company under any such policy of insurance and, to the best knowledge of the
Vendor, there are no circumstances likely to give rise to such a claim.

INTELLECTUAL PROPERTY AND
INFORMATION TECHNOLOGY

Business
IP

7.1(a)      The Disclosure Letter
contains a complete and accurate list of the Business IP. The owner or
applicant for each Intellectual Property Right specified in the Disclosure
Letter is correctly stated.

(b)           A Group Company owns
all of the rights and interests in, and has title to, the Business IP. The
Business IP is valid and subsisting.

(c)           A Group Company is the
registered proprietor of the registrations and applications included in the
Business IP, and the registrations and applications are not subject to, or
likely to be subject to, amendment, challenge, removal or surrender. There is
nothing which might prevent the applications from being granted.

(d)           No compulsory licences,
licences of right or anything similar have been, or are likely to be, granted
for the Business IP.

 52
 

 

(e)           All application,
filing, registration, renewal and other fees for the Business IP have been
paid. The Disclosure Letter contains a complete and accurate list of renewal
dates for the next six months.

Licences
In and Licences Out

7.2(a)      The Disclosure Letter
contains a complete and accurate list of the Licences In and the Licences Out,
excluding, in each case, licences for computer software acquired by the Group
from bona fide third party vendors.

(b)           The Licences In and the
Licences Out are binding and in force. None of the parties to them is in
default and there are no grounds on which they might be terminated. No disputes
have arisen or are foreseeable in connection with them.

No
Infringement by Group

7.3(a)      None of the operations of
the Group infringes, or is likely to infringe, the Intellectual Property Rights
of a third party.

(b)           No claim has been made
by a third party which alleges that the operations of the Group infringe, or
are likely to infringe, the Intellectual Property Rights of a third party or
which otherwise disputes the right of a Group Company to use the Intellectual
Property Rights owned or used by the Group. The Vendor is not aware of any
circumstances likely to give rise to a claim.

Restrictions
on Use

7.4(a)      There are no agreements or
arrangements which restrict the disclosure, use or assignment by the Group of
the Intellectual Property Rights owned or used by the Group.

(b)           The Group is not under
any obligation to pay a royalty, licence fee or other consideration, or to
obtain approval or consent, for use of the Intellectual Property Rights owned
or used by the Group.

Documentation

7.5           Complete and accurate
records, files and documents have been maintained for all material Intellectual
Property Rights owned or used by the Group and the records, files and documents
are in the Group’s possession or under its control.

Information
technology

7.6(a)      The Internal IT Systems are
either owned by, or properly licensed or leased to, a member of the Group. The
relevant Group Company is not in defeult under the licences or leases and there
are no grounds on which they might be terminated.

 53
 

 

(b)           The Group has binding
maintenance and support contracts for the Internal IT Systems. There is no
reason to believe that the contracts will not be renewed when they expire on
the same or substantially similar terms.

(c)           The Group has, in
accordance with best industry practice, taken precautions to preserve the
availability, security and integrity of the Internal IT Systems and the data
and information stored on the Internal IT Systems.

(d)           The Internal IT Systems
do not contain third party software or systems which are not available from
third party suppliers on arms length commercial terms.

CONTRACTUAL MATTERS

Material
Contracts

8.1           The Disclosure Letter
lists all agreements and arrangements of the kinds described in this Warranty
8.1 to which any Group Company is a party. Except as specified in the
Disclosure Letter, there is not outstanding any agreement or arrangement to
which any Group Company is a party:

(a)           which, by virtue of the
acquisition of the Shares by the Purchaser or other performance of the terms of
this Agreement, will result in:

(i)        any other party being
relieved of any obligation or becoming entitled to exercise any right
(including any right of termination or any right of pre-emption or other option);
or

(ii)       any Group Company being in
default under any such agreement or arrangement or losing any benefit, right or
licence which it currently enjoys or in a liability or obligation of any Group
Company being created or increased;

(b)                                 entered
into otherwise than by way of a bargain at arm’s length;

(c)                                  save
for the Nanhua Agreement and the Hongjia Agreement, which requires (or confers
any right to require) the allotment or issue of any shares, debentures or other
securities of any Group Company now or at any time in the future;

(d)                                 (save
for the Intra-Group Guarantees specified in the Disclosure Letter) which
establishes any guarantee, indemnity, suretyship, form of comfort or support
(whether or not legally binding) given by any Group Company in respect of the
obligations or solvency of any third party;

(e)                                  pursuant
to which any Group Company has sold or otherwise disposed of any company or
business in circumstances such that it remains subject to any liability
(whether contingent or otherwise) which is not fully provided for in the Last
Accounts;

 54
 

 

(f)            which, upon completion
by a Group Company of its work or the performance of its other obligations
under it, is likely to result in a loss for that Group Company which is not
fully provided for in the Last Accounts;

(g)           which establishes any
joint venture, consortium, partnership or profit (or loss) sharing agreement or
arrangement to which any Group Company is a party;

(h)           which involves or is
likely to involve (i) expenditure by any Group Company in excess of HK$1
million in respect of any one contract (but excluding any contract or
commitment for the purchase or sale of aluminum ingots or scrap, or normal
trade or credit facilities or the sale of the Group’s products in the ordinary
and normal course) or (ii) obligations or restrictions of any Group Company of
an unusual or exceptional nature or magnitude and not in the ordinary and usual
course of business; and

(i)            save for the Strategic
Alliance Agreement, which is any other agreement or arrangement having or
nicely to have a material effect on the financial or trading position or
prospects of any Group Company.

Defaults

8.2(a)      No Group Company is in
default under any agreement to which it is a party and, to the best knowledge
of the Vendor, there are no circumstances likely to give rise to any such
default.

(b)           To the best knowledge
of the Vendor, no party with whom any Group Company has entered into any
agreement or arrangement is in default under such agreement or arrangement and
there are no circumstances likely to give rise to any such default.

Trading
Relationships

8.3           During the twelve
months preceding the date of this Agreement no significant customer of or
supplier to any Group Company has ceased to deal with that Group Company or has
indicated an intention to cease to deal with that Group Company, either in
whole or in part, and, so far as the Vendor is actually aware, no such person
is likely to cease to deal with that Group Company or deal with that Group
Company on a smaller scale (whether as a result of the acquisition of the
Shares by the Purchaser or other performance of the terms of this Agreement or
for any other reason).

Grants

8.4           No Group Company has
done or agreed to do anything as a result of which, and the acquisition of the
Shares by the Purchaser or other performance of the terms of this Agreement is
not likely to have the result that, either:

(a)           any investment or
subsidy or other grant or allowance paid to any Group Company is or will be
liable to be refunded in whole or in part; or

 55
 

 

(b)           any such subsidy, grant
or allowance for which application has been made by any Group Company will not
be paid or will be reduced.

Trade
Bills

8.5       As at 1 March 2001, no Group Company has
incurred any liability (actual or contingent) or will incur any liability which
has arisen or will arise from the issuing of trade related bills to customers
based either in Hong Kong or elsewhere where such bills are issued on a
recourse basis and one or more of the parties to whom recourse may be made, in
the event of default by the relevant customer, is a member or are members of
the Group.

LITIGATION AND INVESTIGATIONS

Litigation

9.1(a)      Except as plaintiff in the collection of
debts arising in the ordinary course of business (none of which exceeds HK$500,000
and which do not exceed HK$5 million in aggregate), no Group Company is a
plaintiff or defendant in or otherwise a party to any litigation, arbitration
or administrative proceedings which are in progress or threatened or pending by
or against or concerning any Group Company or any of its assets.

(b)           So far as the Vendor is
aware, no governmental or official investigation or inquiry concerning any
Group Company is in progress or pending.

(c)           The Vendor is not aware
of any circumstances which are likely to give rise to any such proceeding,
investigation or inquiry as is referred to in paragraph (a) or paragraph (b).

Defective
Products

9.2           So far as the Vendor is
aware, no Group Company has manufactured, sold or supplied any product or
service which is or was or will become in any material respect faulty,
defective or dangerous (unless inherently dangerous) or which does not comply
in any material respect with any warranties or representations expressly or
impliedly made by any Group Company or with all applicable laws, regulations,
standards and requirements.

DIRECTORS AND EMPLOYEES

Employees

10.1         The Disclosure Letter
sets out or refers to a list of all employees of each Group Company showing, by
reference to appropriate grades or categories, the remuneration payable and
other principal benefits which the Company is bound to provide.

 56
 

 

Compliance

10.2         Each Group Company has in
relation to each of its employees (and so far as relevant to each of its former
employees) complied in all material respects with all statutes, regulations,
codes of conduct, collective agreements, terms and conditions of employment,
orders and awards relevant to their conditions of service or to the relations
between it and its employees (or former employees, as the case may be) or any
recognised trade union.

Disputes

10.3         No dispute has arisen
within the last five years between any Group Company and a material number or
category of its employees (or any trade union or other body representing all or
any of such employees) and there are no present circumstances which are likely
to give rise to any such dispute.

Incentive
Schemes

10.4         Except as specified in
the Disclosure Letter, no Group Company has in existence (or is proposing to
introduce) any share incentive scheme, share option scheme or profit sharing,
bonus, commission or other incentive scheme for all or any of its directors or
employees.

Payments
on Termination

10.5         Except to the extent (if
any) to which provision or allowance has been made in the Last Accounts:

(a)           no outstanding liability
has been incurred by any Group Company for breach of any contract of employment
or for services or redundancy payments, protective awards, compensation
payments or for failure to comply with any order for the reinstatement or
re-engagement of any employee or for any other liability accruing from the
termination of any contract of employment or for services; and

(b)           no gratuitous payment
has been made or benefit given (or promised to be made or given) by any Group
Company in connection with the actual or proposed termination or suspension of
employment, or variation of any contract of employment, of any present or
former director or employee of any Group Company.

INSOLVENCY ETC.

11.1         No order has been made,
petition presented or meeting convened for the purpose of considering a
resolution for the winding up of any Group Company or for the appointment of
any provisional liquidator. No receiver (including any administrative receiver)
has been appointed in respect of the whole or any part of any of the property,
assets and/or undertaking of any Group Company.

 57
 

 

11.2         No composition in
satisfaction of the debts of any Group Company, or scheme of arrangement of its
affairs, or compromise or arrangement between it and its creditors and/or
members or any class of its creditors and/or members, has been proposed,
sanctioned or approved.

11.3         No distress, distraint,
charging order, garnishee order, execution or other process has been levied or
applied for in respect of the whole or any part of any of the property, assets and/or
undertaking of any Group Company.

11.4         No Group Company has been
party to any transaction with any third party or parties which, in the event of
any such third party going into liquidation or a bankruptcy order being made in
relation to it or him, is likely to constitute (in whole or in part), a
fraudulent preference, an invalid floating charge or part of a general
assignment of debts.

11.5         All charges in favour of
any Group Company required to be registered in accordance with the provisions
of sections 80 to 91 of the Companies Ordinance have been so registered or
comply with all necessary formalities as to registration or otherwise in any
foreign jurisdiction.

11.6         No person who now is, or
who at any time within the last three years was, a director or officer of any
Group Company is, or at any material time was, subject to any disqualification
order under sections 168C to 168T of the Companies Ordinance.

11.7         No events or
circumstances analogous to any of those referred to in Warranties 11.1 to 11.6 have
occurred in any jurisdiction outside Hong Kong.

11.8         To the best knowledge of
the Vendor, no circumstances exist which are likely to give rise to the
occurrence of any events or circumstances described in Warranties 11.1 to 11.7
if the Warranties were to be repeated at any time on or before Completion.

 58
 

 

Part B: Property
Warranties

1.             The Leased Properties
comprise all the land and premises rented, occupied or otherwise used by any
Group Company or in which any Group Company has any right or interest.

2.             A list of all tenancy
agreements or leases entered into by the Group Companies in respect of the
Leased Properties has been disclosed in Schedule 6 and the description set out
therein is correct and accurate and not misleading in any material respects.

3.             Each of the Group
Companies has paid the rent, rates and all other charges for which the tenant
is responsible under the tenancy agreements or leases of the Leased Properties
up to the last payment date and has observed and performed the covenants on the
part of the tenant and the conditions contained in the tenancy agreements or
leases in all material respects and all such tenancies or leases are valid,
binding and in full force.

4.             All licences,
consents and approvals required from the landlords, any superior landlords and
mortgagees (where necessary) in respect of any of the tenancies or leases of
the Leased Properties have been obtained and the covenants on the part of the
tenant contained in such licences, consents and approvals (if any) have been duly
performed and observed in all material respects.

5.             The Group Companies
together have exclusive and unfettered possession of the Leased Properties and
no right of occupation has been acquired or is in the course of being acquired
by any third party.

6.             All covenants,
restrictions, stipulations, conditions and other terms and obligations in so
far as the same affect the Leased Properties have been observed and performed
in all material respects and, so far as the Vendor is aware, there are no
circumstances which would entitle or require the government or any landlord or
other person to exercise any powers of re-entry and taking possession or which
would otherwise restrict or terminate the continued possession or occupation of
any of the Leased Properties.

7.             There are no
circumstances, actions, disputes, notices, liabilities, demands, complaints,
litigation or pending litigation which (with or without the taking of other
action) would entitle any third party to exercise a right or power of entry or
to take exclusive possession, or which would in any other way affect or
restrict the continued possession, enjoyment or use of any of the Leased
Properties for its present purposes.

8.             Each Group Company
has complied with all ordinances, regulations, by-laws and other relevant
legislation to which they are subject in relation to the Leased Properties.

9.             No Leased Property is
affected by any order, notice or proceedings involving any governmental, state,
municipal or local authority or other body or third party or any agreement with
any of the same.

 59
 

 

10.           The present use of each
Leased Property is the permitted use for the purpose of the relevant tenancy
agreement or lease of such Leased Property.

11.           There is no outstanding
and unobserved or unperformed obligation necessary to comply with any notice or
other material requirement given or imposed by the landlord under any tenancy
agreement or lease of any of the Leased Properties.

12.           No material structural
or other defects have appeared in respect of or affecting the buildings and
structures on or comprising the Leased Properties or any parts thereof and all
such Leased Properties are in good and substantial repair and condition and fit
for the purposes for which they are presently used and will not require
substantial expenditure for regular repair and maintenance.

13.           All rent review notices
and counter-notices and notices, counter-notices and applications to the court
under the Landlord and Tenant (Consolidation) Ordinance of Hong Kong or any
other applicable rules and regulations to be served by any of the Group
Companies have been served within the prescribed time limits and there has been
and are no disputes outstanding as to the settlement of the relevant level of
rent under the tenancy or lease of any of the Leased Properties.

14.           None of the Group
Companies are aware of any breaches of any condition by any of them in respect
of the tenancy agreement or lease of any Leased Properties, including the
covenants to pay rent.

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Part C: Environmental
Warranties

1.             The Vendor and each
Group Company is in full compliance in all material respects with codes,
statutes or other laws or all and any legislation concerning health, safety or
matters related to pollution or protection of the environment which are
applicable to any Group Company or to the Leased Properties and all rules,
regulations, ordinances, orders, notices and directives made thereunder (Environmental Legislation),
and each Group Company has obtained all necessary consents, permits, licences,
authorisations and approvals required under the Environmental Legislation (Environmental Authorisations) in order for the continual conduct by any
Group Company of its business and there has been and is no breach of any
permits, consents, the Environmental Authorisations or Environmental
Legislation in any material respect. Copies of such permits and consents have
been provided to the Purchaser.

2.             All environmental
studies, audits and other environmental reports or assessments commissioned or
otherwise obtained by the Vendor in respect of the Leased Properties, whether
in final form or in draft, have been disclosed to the Purchaser.

3.             No claim of any
violation, breach or infringement of Environmental Legislation has been made
against the Vendor or any Group Company and neither the Vendor nor any Group
Company has been notified in writing by any regulatory body that to any extent
it is not in compliance with any Environmental Authorisations.

4.             So far as the Vendor
is aware, the continuing conduct of its business or use of the Leased
Properties by any Group Company will not give rise to any claim, proceeding or
action under any Environmental Legislation.

5.             There has been no
spill, discharge, leak, emission, injection, escape, deposit or release of any
kind on the Leased Properties or into the environment, whether from the Leased
Properties or otherwise of any substances, material or waste (whether solid,
liquid or gaseous) which is capable of causing harm to the health of living
organisms or the environment or other interference with the ecological systems
of which living organisms form part and in the case of man includes offences
caused to any of his senses or harm to his property resulting from the conduct
of the business of the Vendor or any Group Company other than those releases
permissible under the Environmental Authorisations held by a Group Company or
under the Environmental Legislation.

6.             So far as the Vendor
is aware, there is not currently and there has not been on the Leased
Properties any spill leakage, discharge, release or deposit (whether to water,
land, sewage systems or air or a combination or these) of any substance
material or waste (whether solid, liquid or gaseous) which:

(a)                                  is
capable of causing harm to the health of living organisms or the environment or
other interference with the ecological systems of which living organisms form
part and which in the case of man includes offence caused to any of his senses
or harm to his property, or

 61
 

 

(b)           may inhibit or restrict
or make materially more costly any operation of the businesses of the Vendor or
any Group Company or the occupation of or redevelopment of the Leased
Properties or any part of them by reason of contamination or otherwise.

7.             To the best of the
Vendor’s knowledge:

(a)           no property in the
immediate vicinity of the Leased Properties has been used as a landfill;

(b)           there has been no
material release, discharge or disposal of any hazardous materials by any third
party in the immediate vicinity of the Leased Properties; and

(c)           no hazardous materials
have been stored, treated or managed at the Leased Properties operated by any
Group Company or at any adjoining location other than those likely to be
stored, treated or managed in the ordinary course of the businesses carried out
at the Leased Properties.

8.             No notice, order,
judgement, demand or letter requiring the taking of remedial or other action
under or pursuant to the Environmental Legislation has been received by the
Vendor or any Group Company.

9.             Neither the Vendor
nor any Group Company has been notified nor is the Vendor aware that the Vendor
or any Group Company has any indebtedness or outstanding liability (absolute or
contingent) in respect of the Environmental Legislation with respect to the
storage, treatment, clean-up or disposal of any pollutant, contaminant,
substance, material or waste (whether solid, liquid or gaseous).

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Part D:          Tax Warranties

GENERAL/COMPLIANCE

Accounts

1.1           All liabilities
expected to fall due of each Group Company for Tax measured by reference to
income, profits or gains earned, accrued or received on or before the Last
Accounts Date or arising in respect of an event occurred, occurring or deemed
to occur on or before the Last Accounts Date are fully provided for in the Last
Accounts, and the same have been accounted for in timely fashion in the period
they arose. All other warranties relating to specific Tax matters set out in
this Schedule are made without prejudice to the generality of this paragraph.

Position
since Last Accounts Date

1.2           Since the Last Accounts
Date:

(a)           no Group Company has
been involved in any transaction which has given or may give rise to a
liability to Tax on any Group Company (or would have given or might give rise
to such a liability but for the availability of any Tax Relief) other than Tax
in respect of normal trading income or receipts of the Group Company concerned;

(b)           no payment has been
made by any Group Company which will not be deductible and no income, profits
or gains have been excluded which will not be excludable for the purposes of
any Tax, including but not limited to computing the profits of that Group
Company or in computing the corporate Tax chargeable on it;

(c)           no disposal has taken
place or other event occurred which has or may have the effect of crystallising
a liability to Tax which, if such disposal or event had been planned or
predicted at the Last Accounts Date, should have been reflected in the
provision for deferred Tax contained in the Last Accounts; and

(d)           no event has occurred
which has or may have the effect of prejudicing any relief taken into account
in computing or eliminating the provision for deferred tax contained in the
Last Accounts.

Continuing
commitments

1.3           All sums payable under
any obligation incurred by any Group Company prior to Completion and which will
continue to bind any Group Company after Completion have been and will continue
to be deductible for the purposes of any Tax, either in computing the profits
of any Group Company or in computing the Tax chargeable on it.

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Returns etc

1.4           Each Group Company has
duly, and within any appropriate time limits, made all returns, given all notices
and supplied all other information required to be supplied to all relevant Tax
Authorities and has maintained all records required to be maintained for Tax
purposes; all such information was and remains complete and accurate in all
material respects and all such returns and notices were and remain complete and
accurate in all material respects and were made on the proper basis and do not,
and so far as the Vendor is aware are not likely to, reveal any transactions
which may be the subject of any dispute with, or any enquiry raised by, any Tax
Authority.

Disputes, investigations

1.5           No Group Company is
involved in any current dispute with any Tax Authority or is or has been the
subject of any investigation, audit or non-routine visit by any Tax Authority.
So far as the Vendor is aware in relation to each Group Company there is no
planned investigation, audit or non-routine visit by any Tax Authority and
there are no facts (including facts not disclosed to any Tax Authority) which
might cause such an investigation, audit or non-routine visit to be instituted.

Penalties, interest

1.6           No Group Company nor
any director or officer of any Group Company (in his capacity as such) has paid
or become liable to pay, and, so far as the Vendor is aware, there are no circumstances
by reason of which it or they may become liable to pay to any Tax Authority,
any penalty, fine, surcharge or interest in respect of Tax (including in
respect of any failure to make any return, give any notice or supply any
information to any relevant Tax Authority, or any failure to keep or preserve
any records or to pay Tax on the due date for payment).

Tax avoidance

1.7           No Group Company has
been challenged, disallowed or investigated by any Tax Authority for (a)
entering into any transaction the sole or main purpose of which was the
avoidance or evasion or deferral or reduction of Tax by any Group Company or
any associated person or (b) entering into any transaction the object of which
was the exclusion or reduction of the amount of any income, profits, gains,
sales, supplies or imports made or enjoyed by any Group Company or any
associated person for any Tax purpose, or the creation or increase of the
amount of any deduction, loss, allowance or credit claimed or intended to be
claimed by any Group Company or any associated person for any Tax purpose.

Losses

1.8           All losses, allowances
or credits taken into account in computing the provision for Tax (including
deferred tax) in the Last Accounts, or represented to the Purchaser as being
available at any time to any Group Company have been properly incurred and

 64
 

 

claimed and are not expected to be the subject of a challenge or
investigation by any Tax Authority.

Consents,
clearances

1.9           No transaction in
respect of which any consent or clearance was required or sought from any Tax
Authority is or has been entered into or carried out by any Group Company
otherwise than in accordance with a properly obtained written consent or
clearance.

Special
arrangements

1.10         No Tax Authority has
operated or agreed to operate any special arrangement (being an arrangement
which is not based on relevant legislation or any published practice) in
relation to any Group Company’s affairs.

Agency,
permanent establishment

1.11         No Group Company is or
has been or is expected to be liable for any Tax as the agent or deemed agent
of any other person or business or constitutes, has constituted or is expected
to constitute a permanent establishment of any other person, business or
enterprise for any Tax purpose.

EMPLOYEES

2.             All amounts payable
to any Tax Authority in respect of any employee or any other person (including
any Tax deductible from any amounts paid to an employee or any other person,
and any social security or similar contributions required to be made in respect
of employees or any other person) due and payable by any Group Company up to
the date hereof have been duly paid and each Group Company has made all such
deductions and retentions as should have been made under applicable laws or
regulations.

CAPITAL GAINS

3.             If each Group Company
disposed of each of its assets (except trading stock and work-in-progress) for
a consideration equal to the book value of that asset as shown in or adopted
for the purposes of the Last Accounts, to a person not connected with it and by
way of bargain at arm’s length, no liability to Tax would arise by reference to
any actual or deemed gain.

CAPITAL EXPENDITURE

4.             If each Group Company
disposed of each of its assets for a consideration equal to their book value as
shown in or adopted for the purpose of the Last Accounts, no Tax charge would
arise under any legislation relating to depreciation allowances (or
corresponding legislation of the relevant jurisdiction).

 65
 

 

COMPANY RESIDENCE/PERMANENT
ESTABLISHMENT

5.             Each Group Company is
and has at all times been resident for Tax purposes in its place of
incorporation and is not and has not at any time been treated as resident in
any other jurisdiction for any Tax purpose (including any double Taxation
arrangement). No Group Company is or has been or is expected to be subject to
Tax in any jurisdiction other than its place of incorporation by virtue of
having a permanent establishment or other place of business in that
jurisdiction.

TRANSFER PRICING

6.             The Group has not
been challenged, disallowed or investigated by any Tax Authority for any
indication of transfer pricing adjustment to the profits of any Group Company,
or require any such adjustment to be made to the terms on which any such
transaction is treated as taking place, and no such adjustment has been made or
threatened.

SALES TAXES AND IMPORT DUTY

7.1           For the purposes of
this paragraph 7 the expression sales
tax means Tax on
sales, turnover, value added or any similar measure imposed in any relevant
jurisdiction. Import Duty means tax or duty or charge on
importation or exportation or any similar measure imposed in any relevant
jurisdiction.

7.2           Each Group Company:

(a)           has been registered or
declared for the purposes of sales tax and import duty at all times that it has
been required to be so registered or declared by sales tax legislation or
import duty regulation;

(b)           has complied fully with
and observed in all material respects the terms of sales tax legislation or
import duty regulation;

(c)           is not and has not been
treated for the purposes of sales tax legislation or import duty regulation as
a member of a group that includes any company that is not a Group Company, and
has not applied for such treatment; and

(d)           is not and has not been
subject under sales tax legislation to any penalty, fine or surcharge, or any
warning or notice which could (whether with or without other events) lead to
the imposition of any penalty, fine or surcharge and no event has occurred
which could give rise to such a penalty, fine or surcharge.

7.3           All sales tax, import
duty and other taxes or charges payable upon the importation of goods or
services and all excise duties payable in respect of any assets (including
trading stock) imported or owned by any Group Company have been paid in full.

 66
 

 

7.4           All importations of goods
by any Group Company are and have been the subject of proper customs clearance
procedures (including correct classification and valuation according to the
applicable legislation and the following of the correct procedure for any
exemption claimed from import duties). So far as the Vendor is aware, no goods
imported by a third party on behalf of any Group Company or sold to a Group
Company are liable to seizure or forfeiture for non-payment or improper reclaim
of any import duty.

7.5           No Group Company has
imported any goods or materials without full payment of import duties and taxes
or sales taxes in circumstances where import duties and taxes or sales taxes
may become payable in respect of such goods or materials after such importation
on the occurrence or non-occurrence of any event or on the utilisation or
non-utilisation of such goods or materials in any manner.

STAMP DUTY/CAPITAL DUTY

8.1           All documents in the
possession or under the control of each Group Company or to the production of
which any Group Company is entitled which establish or are necessary to
establish the title of any Group Company to any asset, or by virtue of which
any Group Company has any right, have been duly stamped and any applicable
stamp duties or similar duties or charges in respect of such documents have
been duly accounted for and paid.

8.2           All duties, fees and
penalties payable in respect of the capital of each Group Company have been
duly accounted for and paid, and there are no circumstances under which any
relief obtained against payment of any such amount could be withdrawn.

DOUBLE TAX TREATIES

9.             Save as disclosed in
the Disclosure Letter, each Group Company is entitled to claim the benefit of
any double taxation agreement or convention entered into between the jurisdiction
in which it is resident and any other relevant jurisdiction.

THIN CAPITALISATION

10.           No Group Company is or
could be treated as thinly capitalised for any Tax purpose. There are no
circumstances which could cause any Tax Authority to deny relief for interest
paid by any Group Company, and no such relief has been denied in fact.

COMPLIANCE

11.           None of the assets
which relate to the business carried on by the Company is subject to any
security interest arising in connection with any failure (or alleged failure)
to pay Tax. All duties of customs and excise and other Tax payable on the

 67
 

 

importation or acquisition of any such assets have
been paid in full, and none of the assets is liable to confiscation or
forfeiture by virtue of non-payment of Tax or non-compliance with any
legislation or regulation relating to Tax.

WLTHHOLDINGS

12.           Each Group Company has
made all deductions and retentions of or on account of Tax as it was or is
obliged or entitled to make and all such payments of or on account of Tax as should
have been made to any Tax Authority, in respect of such deductions or
retentions.

TAX EXEMPTION

13.1         The Disclosure Letter
sets outs in sufficient detail each exemption from Taxation available to each
Group Company (the Exemptions and each an Exemption), including the extent of that Exemption, the period for which that
Exemption will apply, the legislation or concession pursuant to which that
Exemption was granted and the date and method in which that Exemption was
granted. The information set out in the Disclosure Letter in relation to each
of the Exemptions is correct, complete and accurate.

13.2         Each Group Company in
relation to which an Exemption or Exemptions is or are disclosed as having been
granted in the Disclosure Letter has met, continues to meet and will continue
to meet all the conditions and requirements in order for the relevant Exemption
or Exemptions to be available to that Group Company to the full extent set out
in the Disclosure Letter; and has always duly and within appropriate time limits
filed all returns, letters, notices required to be filed in order to benefit to
the full extent set out in the Disclosure Letter from such Exemption or
Exemptions.

TAX RECORDS

14.           Each Group Company has
maintained and obtained at all times complete, correct and up-to-date records,
invoices and other documents (as the case may be) appropriate or requisite for
the purposes of Tax and has preserved such records, invoices and other
documents in such form and for such periods as are required by legislation
relating to such Tax.

FOREIGN EXCHANGE

15.           Each Group Company has
complied with all applicable regulations and legislation in relation to foreign
currency and has maintained all necessary records and has obtained all
necessary consents, approvals and certificates in respect thereof.

 68
 

 

SCHEDULE 4

The Core Agreements

Part A:

1.             the Shareholders
Agreement; and

2.             the Tax Indemnity.

 

 

Part B:

1.             each of the Service
Agreements;

2.             each of the Amendment
Service Agreements;

3.             the Strategic
Alliance Novation Agreement; and

4.             the Management
Agreement.

 69
 

 

SCHEDULE 5

Adjustment Accounts

1.             Basis of Preparation

1.1           The
Adjustment Accounts shall:

(a)           be prepared and
delivered to the Purchaser on the following basis:

	
  Adjustment Accounts

  	
   

  	
  Period

  covered

  	
   

  	
  Indebtedness /

  Balance sheet

  date

  	
   

  	
  Deadline for

  submission to

  Purchaser

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Completion
  Accounts

  	
   

  	
  n/a

  	
   

  	
  Completion Date

  	
   

  	
  60 days following 

  Completion Date

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2001 Adjustment
  Accounts

  	
   

  	
  1 July 2000 - 

  30 June 2001

  	
   

  	
  30 June 2001

  	
   

  	
  90 days following 

  30 June 2001

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2002 Adjustment
  Accounts

  	
   

  	
  1 July 2001- 

  30 June 2002

  	
   

  	
  30 June 2002

  	
   

  	
  60 days following 

  30 June 2002

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2003 Adjustment
  Accounts

  	
   

  	
  1 July 2002- 

  30 June 2003

  	
   

  	
  30 June 2003

  	
   

  	
  60 days following 

  30 June 2003

  

(b)           save in relation to the
Completion Accounts, include consolidated balance sheet and profit and loss
account of the Company and its subsidiaries together with any notes included in
or annexed to them;

(c)           (except as otherwise
specifically provided in this Schedule) be prepared under the historical cost
convention and in accordance with Hong Kong Statements of Standard Accounting
Practice, accounting principles generally accepted in Hong Kong and the
disclosure requirements of the Hong Kong Companies Ordinance, and on a basis
consistent with that adopted by the Vendor in the preparation of the Last
Accounts and the financial statements in the last 24 months; and

(d)           not re-appraise the
value of any of the assets of the Company or its subsidiaries as a result of
the change in ownership of the share capital of the Company (or any changes in
the business of the Company or any of its subsidiaries since Completion
following such change in ownership) except only as specifically set out in this
Schedule.

 70
 

 

2.             Working Capital,
Completion Net Debt, Company Sales and EBITDA

The Working Capital, the
Completion Net Debt, the Company Sales and the EBITDA shall be calculated from
the relevant set of Adjustment Accounts in accordance with the provisions of
clause 6 and in relation to Working Capital and Completion Net Debt, the
following additional criteria shall apply:

2.1           In relation to the
calculation of Working Capital:

Current
assets includes (without limitation):

·          prepayments,
deposits and other receivables of a trade related nature;

·          trade
receivables (net of bad debt write-offs, general and specific provisions in
accordance with the Company’s provisioning policies and reviewed and adjusted
by the Purchaser’s and Vendor’s Accountants);

·          bills
receivables (undiscounted); and

·          inventories
(net of inventory write-downs and provisions for obsolescence in accordance
with the Company’s provisioning policies and reviewed and adjusted by the
Purchaser’s and Vendor’s Accountants).

Current
liabilities includes (without limitation):

·          bank
and other loans (including those from the Vendor) for working capital purposes;

·          trade
payables;

·          trust
receipt loans/bills payable; and

2.2           In relation to the
calculation of Completion Net Debt:

Completion
Net Debt includes (without limitation):

·          long
and short term bank and other third party loans (secured and unsecured) and
accrued interest thereon;

·          debit
bank balances (to comprise the net balance between (i) any bank overdrafts; and
(ii) the cash in the bank and any cash equivalents) less any cash in hand;

·          net
balances owed to the Non-Aluminum Group, Kwong and associates and accrued
interest payable thereon;

·          other
shareholder loans;

·          contingencies
(such as discounted bills (with recourse), guarantees, standby letters of
credit, indemnities or derivatives);

 71
 

 

·          forward/futures
contract commitments;

·          debentures;

·          loan
stock or similar instruments;

·          total
finance lease commitments (principal and finance charges);

·          total
operating lease commitments (and other non-cancellable cost and revenue
commitments);

·          other
contracted capital commitments;

·          deferred
payments outstanding for future acquisitions; and

·          instruments
having the commercial effect of borrowing,

other than any of the
above which are of a working capital nature.

3.             Review procedures to
be performed by the Vendor’s Accountants in relation to the draft Adjustment
Accounts

The procedures below will
be the minimum procedures applied by the Vendor’s Accountants upon their review
of the Completion Accounts, in relation to the review of Completion Net Debt,
and of the 2001 Adjustment Accounts, the 2002 Adjustment Accounts and the 2003
Adjustment Accounts, generally, save where otherwise noted:

3.1           Working Capital

Accounts/bills
receivable

·          Obtain
an analysis of trade debtors by product line, division, customer and geographical
region (as appropriate) and enquire about significant trends and fluctuations.
Agree to supporting or external documentation as appropriate.

·          Arrange
for debtors’ confirmations for a specified sample of trade debtor balances.
Obtain explanations for any discrepancies in replies received.

·          Obtain
trade debtors’ ageing as at the balance sheet date (and latest available date)
and highlight potential collection problems. Obtain management’s comments as to
recoverability of large overdue balances. Agree to supporting or external
documentation as appropriate.

·          Obtain
an analysis of bad debt write-offs and consider adequacy of allowance for
doubtful debts as at the balance sheet date.

Inventories

·          Obtain
an analysis of inventory (by product category, volume and value as
appropriate), calculate inventory turnover ratio and enquire about any
significant

 72
 

 

trends and fluctuations. Agree to supporting or
external documentation as appropriate.

·          Obtain
finished products inventory ageing report at balance sheet date (and latest
available date). Discuss with management the physical and accounting treatment
of significantly aged inventory.

·          Enquire
about and consider the adequacy of the procedures used by management to
determine any obsolete inventory.

·          Enquire
about any inventories held on consignment or consigned to others. Arrange for
confirmations of inventories held on consignment or consigned to others, as
appropriate.

·          Attend
stocktake and enquire about timing/ extent of physical inventory procedures and
historical experience with book to physical adjustments. Agree to supporting or
external documentation as appropriate.

Accounts
payable

·          Obtain
an analysis of accounts payable by supplier (by value, purchase volume,
material category if appropriate). Agree to supporting or external
documentation as appropriate.

·          Arrange
for creditors’ confirmations for a specified sample of trade creditor balances.
Obtain explanations for any discrepancies in replies received.

·          Enquire
about ageing profile of accounts payable and discuss any trends over time.

3.2          Completion Net Debt

·          Arrange
for confirmation for all debt, cash and bank balances at the balance sheet
date. Obtain explanations for any discrepancies in replies received.

·          Review
confirmation responses for unrecorded liabilities.

3.3          Company Sales

·          Consider
the basis for recognition of sales.

·          Perform
cut-off review procedures of sales in the appropriate period.

·          Obtain
an analysis of actual sales by value, volume, product category and geographical
region, if appropriate. Enquire about any significant or unusual trends and the
impact for future trading. Agree to supporting or external documentation as
appropriate.

 73
 

 

3.4           EBITDA

·          Obtain
explanations from management as to fluctuations from the prior year in the
Company’s income and expense items excluding interest, taxes, depreciation and
amortisation. Agree to supporting evidence as necessary.

4.             Specific Adjustments
to the Adjustment Accounts to be made prior to the deadline for submission to
the Purchaser as set out in paragraph 1

4.1           Adjustments to
the Completion Accounts

No specific adjustments
to be made to the Completion Accounts.

4.2           Adjustments to the 2001 Adjustment Accounts

Following the audit of
the 2001 Adjustment Accounts by the Vendor’s Accountants, the 2001 Company
Sales and the 2001 EBITDA shall be adjusted such that the 2001 Company Sales
and the 2001 EBITDA shall be:

·          reduced
by such amounts as correspond to the financial results of the Hongjia
Acquisition and Nanhua Acquisition during the period to which the 2001
Adjustment Accounts relate; and

·          increased
by the 2001 Sales Adjustment and the 2001 EBITDA Adjustment, respectively.

For the purposes of this
paragraph 4.2:

2001 Shortfall
means x metric
tonnes (save where x is less than
zero, in which case x shall be
deemed to be zero), where:

x
= a - (b + c);

2001 Sales
Adjustment means
HK$y, where:

	
  y = 

  	
  x.d

  	
  ;

  
	
  b

  

2001 EBITDA
Adjustment means
HK$z, where:

	
  z = 

  	
  y.e

  	
  ;

  
	
  f

  

and where,

	
  a  =

  	
  the 2001 Gross Sales Threshold;

  

 

 74
 

 

 

	
  b  =

  	
  the gross sales expressed in metric tonnes
  attributable to those products sold, distributed or supplied under the
  Strategic Alliance Agreement during the financial period to which the 2001
  Adjustment Accounts relate;

  
	
   

  	
   

  
	
  c  =

  	
  the gross sales expressed in metric tonnes
  attributable to those products agreed to be sold, distributed or supplied
  under the Strategic Alliance Agreement during the financial period to which
  the 2001 Adjustment Accounts relate which were not so sold, distributed or
  supplied but which were sold, distributed or supplied by the Company or any
  of its subsidiaries to any third person during the financial period to which
  the 2001 Adjustment Accounts relate;

  
	
   

  	
   

  
	
  d  =

  	
  the gross sales expressed by value in the lawful
  currency of Hong Kong attributable to those products sold, distributed or
  supplied under the Strategic Alliance Agreement during the financial period to
  which the 2001 Adjustment Accounts relate;

  
	
   

  	
   

  
	
  e  =

  	
  the 2001 EBITDA; and

  
	
   

  	
   

  
	
  f  =

  	
  the 2001 Company Sales.

  

4.3           Adjustments to the 2002 Adjustment Accounts

Following the audit of
the 2002 Adjustment Accounts by the Vendor’s Accountants, the 2002 Company Sales
and the 2002 EBITDA shall be adjusted such that the 2002 Company Sales and the
2002 EBITDA shall be:

·          reduced
by such amounts as correspond to the financial results which relate to the 2002
Profits Adjustment; and

·          increased
by the 2002 Sales Adjustment and the 2002 EBITDA Adjustment, respectively.

For the purposes of this
paragraph 4.3:

2002 Profits Adjustment means the net profits derived from the
Hongjia Acquisition and the Nanhua Acquisition during the financial period to
which the 2002 Adjustment Accounts relate, and in the event that the net
profits so derived exceed HK$71 million, the net profits shall be deemed to be
HK$71 million; and

2002 Shortfall means x
metric tonnes (save where x is
less than zero, in which case x shall
be deemed to be zero), where:

x
= a - (b + c);

2002 Sales
Adjustment means
HK$y, where:

	
  y = 

  	
  x.d

  	
  ;

  
	
  b

  

 

 75
 

 

2002 EBITDA Adjustment means HK$z, where:

	
  z = 

  	
  y.e

  	
  ;

  
	
  f

  

 

and where,

	
  a  =

  	
  the 2002 Gross Sales Threshold;

  
	
   

  	
   

  
	
  b  =

  	
  the gross sales expressed in metric tonnes
  attributable to those products sold, distributed or supplied under the
  Strategic Alliance Agreement during the financial period to which the 2002
  Adjustment Accounts relate;

  
	
   

  	
   

  
	
  c  =

  	
  the gross sales expressed in metric tonnes
  attributable to those products agreed to be sold, distributed or supplied
  under the Strategic Alliance Agreement during the financial period to which
  the 2002 Adjustment Accounts relate which were not so sold, distributed or
  supplied but which were sold, distributed or supplied by the Company or any
  of its subsidiaries to any third person during the financial period to which
  the 2002 Adjustment Accounts relate;

  
	
   

  	
   

  
	
  d  =

  	
  the gross sales expressed by value in the lawful
  currency of Hong Kong attributable to those products sold, distributed or
  supplied under the Strategic Alliance Agreement during the financial period
  to which the 2002 Adjustment Accounts relate;

  
	
   

  	
   

  
	
  e  =

  	
  the 2002 EBITDA; and

  
	
   

  	
   

  
	
  f  =

  	
  the 2002 Company Sales.

  

4.4          Adjustments to the 2003 Adjustment Accounts

Following the audit of
the 2003 Adjustment Accounts by the Vendor’s Accountants, the 2003 Company
Sales and the 2003 EBITDA shall be adjusted, such that the 2003 Company Sales
and the 2003 EBITDA shall be:

·          reduced
by such amounts as correspond to the financial results which relate to the 2003
Profits Adjustment; and

·          increased
by the 2003 Sales Adjustment and the 2003 EBITDA Adjustment, respectively.

For the purposes of this
paragraph 4.4:

2003 Profits Adjustment means the net profits derived from the
Hongjia Acquisition and the Nanhua Acquisition during the financial period to
which the 2003 Adjustment Accounts relate, and in the event that the net
profits so derived exceed HK$78.5 million, the net profits shall be deemed to
be HK$78.5 million; and

 76
 

 

2003 Shortfall means x
metric tonnes (save where x is
less than zero, in which case x shall
be deemed to be zero), where:

x
= a - (b + c);

2003 Sales
Adjustment means
HK$y, where:

	
  y = 

  	
  x.d

  	
  ;

  
	
  b

  

2003 EBITDA Adjustment means
HK$z, where:

	
  z = 

  	
  y.e

  	
  ;

  
	
  f

  

and where,

	
  a  =

  	
  the 2003 Gross Sales Threshold;

  
	
   

  	
   

  
	
  b  =

  	
  the gross sales expressed in metric tonnes
  attributable to those products sold, distributed or supplied under the
  Strategic Alliance Agreement during the financial period to which the 2003
  Adjustment Accounts relate;

  
	
   

  	
   

  
	
  c  =

  	
  the gross sales expressed in metric tonnes
  attributable to those products agreed to be sold, distributed or supplied
  under the Strategic Alliance Agreement during the financial period to which
  the 2003 Adjustment Accounts relate which were not so sold, distributed or
  supplied but which were sold, distributed or supplied by the Company or any
  of its subsidiaries to any third person during the financial period to which
  the 2003 Adjustment Accounts relate;

  
	
   

  	
   

  
	
  d  =

  	
  the gross sales expressed by value in the lawful
  currency of Hong Kong attributable to those products sold, distributed or
  supplied under the Strategic Alliance Agreement during the financial period
  to which the 2003 Adjustment Accounts relate;

  
	
   

  	
   

  
	
  e  =

  	
  the 2003 EBITDA; and

  
	
   

  	
   

  
	
  f  =

  	
  the 2003 Company Sales.

  

 

 77
 

 

SCHEDULE 6

The Leased Properties

Group
I – property rented by the Group in Hong Kong

1.             Property:

12th Floor, Railway
Plaza, No. 39 Chatham Road South, Tsim Sha Tsui, Kowloon, Hong Kong

2.             Description and
tenancy particulars

(i)            The property is
currently leased to the Group for a term of one year commencing from 1 April
2000 at a rent of HK$250,240 per month (exclusive of rates and management fees)
with an option to renew for a further term to two years.

(ii)           The Group is currently
in the process of negotiating a renewal of the lease with the lessor.

3.             Particulars of
occupancy

The property is currently
occupied by the Group as an office.

4.             Lessor  

Harbour Talent
Limited

Group II - Properties occupied by the
Group under agreements in the
PRC

A.

1.             Property:

An industrial complex
situated at Xiaochanggang of Lezhukou Village, Qicha Management Zone, Middle
Section of Guijiang Highway, Dali Town, Nanhai, Guangdong Province

2.             Description and
tenancy particulars:

(i)            The property comprises
an industrial complex erected on various plots of irregular shaped site having
a total site area of approximately 80,182 sq.m.

(ii)           The industrial complex
has a total gross floor area of approximately 49,338 sq.m.

 78
 

 

(iii)          The land use rights of
the property comprising various plots of land having a total site area of
approximately 80,182 sq.m. are currently leased to Nanhai Asia Aluminium
Factory Co., Limited, a wholly-owned subsidiary of the Company, for terms due
to expire between 2011 to 2016 at a current total annual rent of RMB2,180,524
and a current total annual management fees of RMB791,600. (Please see
particulars of land undertaking contracts below)

Particulars
of land undertaking contracts

	
  Endorsement Date

  of Contracts

  	
   

  	
  Lessor

  	
   

  	
  Site Area (sq.m.)

  	
   

  	
  Lease Term

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  18-7-1995

  	
   

  	
  Qicha Economic 

  

  United 

  Association

  	
   

  	
  25,272

  	
   

  	
  1-10-1991 to
  30-9-1994 

  

  1-10-1994 to 30-9-2011

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  18-7-1995

  	
   

  	
  Qicha Economic 

  

  United

  Association

  	
   

  	
  18,579

  	
   

  	
  1-11-1991 to
  30-10-1994 

  

  1-11-1994 to 30-9-2011

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  18-7-1995

  	
   

  	
  Qicha Economic 

  

  United 

  Association

  	
   

  	
  13,088

  	
   

  	
  1-4-1994 to
  30-3-1994 

  

  31-3-1994 to 30-9-2011

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  18-7-1995

  	
   

  	
  Qicha Economic 

  

  United 

  Association

  	
   

  	
  15,968

  	
   

  	
  15-1-1995 to
  14-1-1997 

  

  15-1-1997 to 30-9-2011

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  27-7-1995

  	
   

  	
  Qicha 

  Management 

  Zone Lezhukou 

  (East) Economic 

  Association

  	
   

  	
  1,897.375

  	
   

  	
  1-4-1994 to
  30-3-1997 

  

  31-3-1997 to 30-4-2014

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  27-7-1995

  	
   

  	
  Qicha 

  Management 

  Zone Lezhukou 

  (East) Economic 

  Association

  	
   

  	
  882.85

  	
   

  	
  15-1-1995 to
  14-1-1997 

  

  15-1-1997 to 14-1-2016

  

 

 79
 

 

 

	
  Endorsement Date

  of Contracts

  	
   

  	
  Lessor

  	
   

  	
  Site Area (sq.m.)

  	
   

  	
  Lease Term

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  25-12-1996

  	
   

  	
  Qicha (Group)

  Company Limited

  (Economic 

  

  United

  Association)

  	
   

  	
  4,495

  	
   

  	
  1-7-1996 to
  30-6-1998 

  

  1-7-1998 to 30-6-2016

  

B.

1.             Property:

An Industrial Complex
Situated at Qicha Management Zone, Middle Section of Guijing Highway, Dali
Town, Nanhai, Guangdong Province

2.
Description and tenancy particulars:

(i)            The property comprises
an industrial complex erected on two plots of irregular-shaped site having a
total site area of approximately 56,910 sq.m.

(ii)           The industrial complex
has a total gross floor area of approximately 34,876 sq.m.

(iii)          The land use rights of
the property is currently leased to Nanhai Xinya Aluminium & Stainless
Steel Co., Limited, a wholly-owned subsidiary of the Company, for a term
commencing from 1 July 1995 to 30 June 2015 at a current total annual rent of
RMB2,731,680 and a current total annual management fees of RMB682,960 (Please
see particulars of land undertaking contracts below)

Particulars
of land undertaking contracts

	
  Endorsement Date

  of Contract

  	
   

  	
  Lessor

  	
   

  	
  Site Area (sq.m.)

  	
   

  	
  Lease Term

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1-11-1995

  	
   

  	
  Qicha (Group) 

  Company Limited

  	
   

  	
  55,683

  	
   

  	
  1-7-1995 to
  30-6-2015

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  6-12-1996

  	
   

  	
  Qicha (Group) 

  Company Limited

  	
   

  	
  1,227

  	
   

  	
  1-7-1995 to
  30-6-2015

  

 

 80

 

 

C.

1.        Property:

An industrial complex
situated in the industrial district of Zhongbian Management Zone, Nanhai,
Guangdong Province

2.        Description and tenancy
particulars:

(i)        The property comprises an
industrial complex on a site having a total site area of approximately 7,813
sq.m.

(ii)       The industrial complex has
a total gross floor area of approximately 1,500 sq.m.

(iii)      The
land use rights of the property, which was originally leased to a Mr Zhong
Jianqiu, are currently leased to Nanhai Panasia Metal Spraying Co., Limited, a
wholly-owned subsidiary of the Company, for a term of 24 years due to expire in
2018 at a current total annual rent of RMB845, 623 and no management fees is
required. No transfer agreement has been entered into between Mr Zhong Jianqiu
and Nanhai Panasia Metal Spraying Co., Limited for the transfer of the lease
but the transfer of lease was certified by a letter dated 19 November 1998
issued by Zhong Bian Management Zone of Dali Town, Nanhai

3.        Particulars of occupancy

The property is currently
occupied by the Group as workshop, ancillary offices, warehouses and ancillary
uses.

4.        Lessor

Zhong Bian Management
Zone (Economic United Association)

 81
 

 

SCHEDULE
7

Amendments
to the Articles

The Articles are amended as follows:

PRELIMINARY

1.             Insert
the following new definitions under Article 2:

“A Group” means the A
Shareholder and its Subsidiaries from time to time;

“A Group Member” means
any member of the A Group;

“A Shareholder” means GAT
(or the transferee of its shares following a permitted transfer to another
member of the A Group);

“Aluminum Extrusion”
means the processes of aluminum extrusion, casting, anodising and paint
coating, and the fabrication, production or manufacture of aluminum extrusion
products (including the supply and/or distribution of the aluminum extrusion
products manufactured by the business that carries on such process but
excluding, for the avoidance of doubt, aluminum smelting);

“B Group” means the B
Shareholder and its Subsidiaries from time to time;

“B Group Member” means
any member of the B Group;

“B Shareholder” means
Indalex UK Limited, a company incorporated under the laws of England whose
company number is 188407 and whose registered office is at Novar House, 24
Queens Road, Weybridge, Surrey KT13 9UX (or the transferee of its shares
following a permitted transfer to another member of the B Group or the Indalex
Group);

“Board” means the Company’s
board of directors or any duly appointed committee of it;

“Business” means the
manufacture, sale and distribution of Aluminum Extrusion products and such
other aluminum business as the Group may agree to undertake;

“Business Day” means a
day (other than a Saturday) on which banks generally are open in Hong Kong for
a full range of business;

“GAT” means Global
Applied Technologies Holdings Limited, a company incorporated under the laws of
Bermuda whose registered office is at Clarendon House, 2 Church Street,
Hamilton, HM11, Bermuda;

“Group” means the Company
and its Subsidiaries for the time being, and, following completion of the
Hongjia Acquisition and the Nanhua Acquisition, the Group shall

 82
 

 

be deemed to include the
sino foreign equity joint venture enterprises to be established to effect the
Hongjia Acquisition and the Nanhua Acquisition;

“Group
Member” means any member of the Group;

“Hongjia
Acquisition” means the certain proposed establishment of a sino foreign equity
joint venture enterprise as a 60 per cent. subsidiary of the Company for the
acquisition of certain of the assets of Hongjia Aluminiurn Alloy Co., Ltd.;

“Indalex”
means Indalex, Inc., a company incorporated under the laws of Delaware whose
registered office is at 3000 Lakeside Drive, Suite 309 South, Bannockburn, IL
60015, U.S.A.;

“Indalex
Group” means Indalex and its Subsidiaries, from time to time;

“Intellectual
Property Rights” means patents, trade marks, service marks, logos, get-up,
trade names, internet domain names, rights in designs, copyright (including
rights in computer software) and moral rights, database rights, semi-conductor
topography rights, utility models, rights in know-how and other intellectual
property rights, in each case whether registered or unregistered and including
applications for registration, and all rights or forms of protection having
equivalent or similar effect anywhere in the world;

“Joint
Working Party”, in relation to any matter, means a joint working party of the
Company established to consider such matter consisting of four (4)
representatives and comprising equal numbers of representatives from both (i)
Indalex and (ii) the A Shareholder or the Company;

“Nanhua
Acquisition” means the certain proposed establishment of a sino foreign equity
joint venture enterprise as a 60 per cent. subsidiary of the Company for the
acquisition of certain of the assets of Guangdong Nanhua Aluminium Co. Ltd.;

“Reserved
Shareholder Matters” means those matters defined in Article 146B;

“Shareholders”
means the A Shareholder and the B Shareholder (and “Shareholder” shall be
construed accordingly);

“Subsidiaries”
means, in relation to an undertaking (the “holding undertaking”), any other
undertaking in which the holding undertaking (or persons acting on its or their
behalf) for the time being directly or indirectly holds or controls either:

(a)       a majority of the voting
rights exercisable at general meetings of the members of that undertaking on
all, or substantially all, matters; or

(b)       the right to appoint or
remove directors having a majority of the voting rights exercisable at meetings
of the board of directors of that undertaking on all, or substantially all,
matters,

and any undertaking which
is a Subsidiary of another undertaking is also a Subsidiary of any further
undertaking of which that other is a Subsidiary; PROVIDED THAT, for the

 83
 

 

purposes of the Articles,
neither the Company nor any Subsidiary of the Company is to be regarded as a
Subsidiary of the A Shareholder or the B Shareholder or any other A Group
Member or B Group Member;

“undertaking”
means a body corporate or partnership or an unincorporated association carrying
on trade or a business with or without a view to profit. In relation to an
undertaking which is not a company, expressions in the Articles appropriate to
companies are to be construed as references to the corresponding persons,
officers, documents or organs (as the case may be) appropriate to undertakings
of that description;

2.             Delete “Ordinance” in the first line of
Article 4 and replace with “Act”.

3.             Delete “articles” in the first line of Article
6 and replace with “Articles”.

MEETINGS OF MEMBERS

Meetings of Members

4.             Delete “more than”,
and insert “or more” after “10
per cent” in the first line of Article 52.

Notice of Meetings

5.             Delete “seven” in
the first line of Article 60 and replace with “fourteen”.

Conduct of Meetings

6.             Insert “more than” after “holding” in line 2 of Article 61.

7.             Delete “fifty per cent of the votes of the shares of each
class or series of shares entitled to vote as a class or series thereon and the
same proportion of the votes of the remaining shares entitled to vote thereon” in
lines 1-3 of Article 63 and replace with “one
duly authorised representative of the A Shareholder and one duly authorised
representative of the B Shareholder”.

8.             (1)           Delete “one
hour” in the first
line of Article 64 and replace with “thirty
minutes”.

(2)           Delete “if convened upon the requisition of members, shall be
dissolved; in any other case, it shall stand adjourned to the same day in the
next week, at the same time and place or to such other day and at such other
time as the directors may determine” in lines 2-4 of Article 64 and replace
with “shall be adjourned for seven Business Days to be held at the same venue
and at that adjourned meeting any two members present in person or by proxy
shall be a quorum”.

9.             Delete Article 69 and
replace with the following:

 84
 

 

“69.        The chairman of the
meeting shall not be entitled to a casting vote.”

DIRECTORS, OFFICERS, AGENTS AND LIQUIDATORS

Powers and Proceedings of Directors

10.           Insert the following at
the end of Article 74:

“The B Shareholder shall have the right to appoint one
director at any time and the remaining directors shall be appointed by the A
Shareholder. Any director may, and the secretary shall at the request of any
director, summon a meeting of the directors.”

11.           Delete “the directors shall be elected by the members or the
directors for such term as the members or the directors may determine” in
lines 2-3 of Article 75 and replace with “,
subject to the provisions of Article 74, a Shareholder may appoint a director
nominated by it by notice to the Company and to the other Shareholder”.

12.           Delete “a resolution of members or by a resolution of
directors” in the first line of Article 77 and
replace with “the Shareholder by whom he was
appointed by notice to the Company and to the other Shareholder”.

13.           Delete “by a resolution of members or by a resolution of a
majority of remaining directors” in lines 2-3 of Article
79 and replace with “in accordance with the provisions of Article 75”.

14.           (1)           Insert “and
each of the Shareholders” after “A
director” in the first line of Article 84.

(2)           Delete “three” in the first line of Article 84 and
replace with “fourteen”.

(3)           Delete “all of the directors entitled to vote at the meeting”
in lines 2-3 of Article 84 and replace with “the
A Shareholder and the B Shareholder have agreed to shorten or”.

(4)           Insert “, as the case may be” after “the notice of the meeting” in line 3 of
Article 84.

(5)           Insert “agreement or” before “waiver” in line 4 of Article 84.

(6)           Insert after “on his part” in line 4 of Article 84 “and the
presence at the meeting of at least one of the directors appointed by a
Shareholder shall be deemed to constitute agreement or waiver on the part of
that Shareholder”.

15.           (1)           Delete “no
less than one half of the total number of directors” in
line 2 of Article 85 and replace with “at least
two directors”.

(2)           Insert the following as
a continuation of Article 85:

 85
 

 

“The Board shall decide on matters by simple majority
vote. Each director shall have one vote. Any director who is absent from a
meeting may nominate any other director to act as his alternate and to vote in
his place at the meeting. The chairman shall not have a casting vote.”

NOTICES

16.           Renumber Article 138 as
Article 138A.

17.           (1)           Delete “mail” in the first line of sub-paragraph (a) of
renumbered Article 138A and replace with “prepaid
recorded delivery, special delivery or registered post”.

(2)           Insert after “share register” in line 2 of sub-paragraph
(a) of renumbered Article 138A “or to such
other address, or by fax to such fax number, as may be notified by the members
to the Company from time to time for such purpose”.

18.           Insert the following as
new Article 138B:

“138B. Any such notice, information or written
statement shall be in the English language or, if in any other language,
accompanied by a translation into English. In the event of any conflict between
the English text and the text in any other language, the English text shall
prevail.”

ARBITRATION

19.           Delete “Ordinance” in line 5 of Article 142 and replace with “ordinance”.

RESERVED SHAREHOLDER MATTERS

20.           Insert the following as
new Article 146:

“RESERVED
SHAREHOLDER MATTERS

“146A. Notwithstanding any contrary provision in these
Articles, the A Shareholder and B Shareholder shall use their respective powers
to ensure, for so long as any members of the B Group or the Indalex Group
together hold not less than ten per cent (10%) of the issued share capital of
the Company, that none of the actions specified in Article 146B is taken
(whether by the Board, the Company, any Subsidiary of the Company or any of the
officers or managers within the Group) unless the A Shareholder and Indalex
give their prior approval to proceed in accordance with Article 146C.

146B.     The Reserved Shareholder
Matters are:

(a)          altering the Memorandum
and/or Articles or other constitutional documents of any Group Member;

 86
 

 

(b)          except with the approval
of a Joint Working Party as provided in Article 146D, changing the authorised
or issued share capital of any Group Member or any Group Member increasing (or
reducing) its shareholding in any other company;

(c)           materially changing the
nature or scope of the Business of any Group Member;

(d)          any Group Member
borrowing or raising money or entering into any commitment to borrow or raise
money (including entering into any finance lease, but excluding normal trade
credit or trade facilities entered into in the ordinary course of business)
which would result in the Group’s aggregate actual and contingent borrowings
exceeding HK$10,000,000 (or such other amount as the A Shareholder and Indalex
may agree from time to time);

(e)           any Group Member
entering into any guarantee agreement or arrangement for the benefit of any
person other than a member of the Group;

(f)            any Group Member
incurring any capital expenditure in respect of all items and projects in
aggregate in excess of HK$15,000,000 (or such other amounts as the A
Shareholder and Indalex may agree from time to time);

(g)          any Group Company
disposing of (whether in a single transaction or series of transactions) any
business (or any material part of any business) or any shares in any company;

(h)          except with the approval
of a Joint Working Party as provided in Article 146D, any Group Member
acquiring (whether in a single transaction or series of transactions) any
Aluminum Extrusion business (or any material part of any Aluminum Extrusion
business) or any shares in any company which carries on the business of
Aluminum Extrusion;

(i)           any Group Member
acquiring (whether in a single transaction or series of transactions) any
business other than Aluminum Extrusion (or any material part of any business
other than Aluminum Extrusion) or any shares in any company which carries on
any business other than Aluminum Extrusion;

(j)            any Group Member
entering into (or terminating) any material partnership, joint venture,
profit-sharing agreement, technology licence or collaboration (other than a
contract entered into in the ordinary course of business);

(k)          any Group Member
entering into any contract, liability or commitment which:

(i)       is of a long term nature;
for this purpose “long term” means continuing for more than two (2) calendar
years;

(ii)      could involve an obligation
of a material magnitude or nature; for this purpose “material” means a
liability for expenditure in excess of HK$20,000,000; or

 87
 

 

(iii)    is outside the ordinary course
of business of the Group;

unless
a contract satisfies such authorisation criteria as the A Shareholder and
Indalex may approve from time to time as part of the procedures for any Group
Member entering into contracts;

(l)                                  major decisions
relating to the conduct (including the settlement) of material legal
proceedings to which any Group Member is a party, excluding legal proceedings
against Indalex or any of its affiliates; for these purposes “material” means a
potential liability or claim of more than HK$10,000,000;

(m)          any Group Member
entering into any transaction which would constitute a connected transaction as
defined in chapter 14 of the Rules Governing the Listing of Securities on The
Stock Exchange of Hong Kong Limited;

(n)          any transaction between
any Group Member and any A Group Member (save for another Group Member) which
is either:

(i)       outside the ordinary course
of business; or

(ii)      within the ordinary course
of business but has a value of more than HK$10,000,000 or is not on commercial
arm’s length terms;

(o)          creating any mortgage,
charge, encumbrance or other security interest of any nature in respect of all
or any material part of any Group Member’s undertaking, property or assets;

(p)          any Group Member making
any material acquisition or disposal (including any material acquisition or
grant of any licence) of or relating to any Intellectual Property Rights;

(q)          any proposal or
proceedings to wind up any Group Member.

146C.
Approval of any of the Reserved Shareholder Matters (or to any variation
thereof) shall require a unanimous vote of the A Shareholder and the B
Shareholder given either in writing by the A Shareholder and Indalex or by
their respective representatives at a general meeting of the Company.

146D.
Notwithstanding Articles 146B and 146C, the Reserved Shareholder Matters
described in Articles 146B(b) and 146B(h) may be approved by a majority vote of
a Joint Working Party made in accordance with the voting procedures of the
Joint Working Party agreed between the A Shareholder and Indalex.”

 88
 

 

SCHEDULE
8

Key
Employees and GAT Employees

Part A:              Key Employees

	
  Employee

  	
   

  	
  Present Position

  
	
   

  	
   

  	
   

  
	
  Mr. Thomas
  Tsang

  	
   

  	
  General Manager of Majestic Holdings Limited

  
	
   

  	
   

  	
   

  
	
  Mr. Benny
  Lam

  	
   

  	
  Import Manager of the Vendor

  
	
   

  	
   

  	
   

  
	
  Mr. Xie Jia
  Hua

  	
   

  	
  General Manager of Asia Aluminum Manufacturing Co.
  Limited

  
	
   

  	
   

  	
   

  
	
  Mr. Zhou
  Guo Bin

  	
   

  	
  Asst. General Manager of Asia Aluminum Manufacturing
  Co. Limited

  
	
   

  	
   

  	
   

  
	
  Mr. Peng
  Zhen Xiong

  	
   

  	
  Export Manager of Asia Aluminum Manufacturing Co.
  Limited

  
	
   

  	
   

  	
   

  
	
  Mr. Zhong
  Jianqiu

  	
   

  	
  General Manager of Nanhai Xinya Aluminum &
  Stainless Steel Co. Limited

  
	
   

  	
   

  	
   

  
	
  Mr. Huang
  Zhi Bo

  	
   

  	
  Sales Manager of Asia Aluminum Manufacturing Co.
  Limited

  
	
   

  	
   

  	
   

  
	
  Mr. Wan Xie
  Min

  	
   

  	
  Managing Director of Nanhai Panasia Metal Spraying
  Co. Limited

  
	
   

  	
   

  	
   

  
	
  Ms. Betty
  Wang

  	
   

  	
  Sales Director of Asia Aluminum Manufacturing Co.
  Limited

  

 

 89
 

 

Part B:              GAT Employees

	
  Employee

  	
   

  	
  Present Position

  
	
   

  	
   

  	
   

  
	
  Mr. Kwong

  	
   

  	
  Chairman of the Vendor

  
	
   

  	
   

  	
   

  
	
  Mr. Michael
  Tse

  	
   

  	
  Deputy Chairman and Managing Director of the Vendor

  
	
   

  	
   

  	
   

  
	
  Mr. Danny
  Hung

  	
   

  	
  Executive Director of the Vendor

  
	
   

  	
   

  	
   

  
	
  Mr. Waltery
  Law

  	
   

  	
  Chief Financial Officer of the Vendor

  
	
   

  	
   

  	
   

  
	
  Ms. June
  Yip

  	
   

  	
  Export Manager of the Group

  

 

 90
 

 

 

SCHEDULE
9

Pre-Completion
Dividends

	
  Payor of
  Dividend

  (1)

  	
   

  	
  Payee of Dividend

  (2)

  	
   

  	
  Amount of Dividend 

  (3)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Asia Aluminum Manufacturing Company Limited

  	
   

  	
  China Aluminum Group Holdings (BVI) Limited

  	
   

  	
  HK$14,616,000.00

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  China Aluminum Group Holdings (BVI) Limited

  	
   

  	
  Global Applied Technologies Holdings Limited

  	
   

  	
  HK$14,616,000.00

  

 

 91Exhibit 10.19

Dated 29 April
2004

(1)        INDALEX,
INC

(2)        ASIA
ALUMINUM GROUP LIMITED

 

SUPPLY
AGREEMENT

 

THIS
AGREEMENT is made this 29th day of April, 2004

BETWEEN:-

(1)                    Indalex, Inc, a
company incorporated in Delaware whose correspondence address is situated at
3000 Lakeside Drive, Suite 309 South, Bannockburn, Illinois 60015 (the “Purchaser”); and

(2)                    ASIA ALUMINUM GROUP LIMITED, a company
incorporated under the laws of British Virgin Islands whose correspondence
address is situated at 12th Floor, Railway Plaza, 39 Chatham Road South,
Tsimshatsui, Kowloon, Hong Kong (the “Supplier”).

WHEREAS the
Purchaser and the Supplier have agreed to enter into this Agreement which sets
out the principal terms in relation to the supply of aluminum extrusion
products (the “Products”) by the
Supplier to the Purchaser. The conditions contained herein shall be applied to
each of the Contracts (as defined below) to be entered into between the
Purchaser and the Supplier.

1.                         BASIS
OF SALE

The Supplier shall
supply, and the Purchaser shall purchase, the Products, on a non-exclusive
basis, subject to the terms contained in the Purchaser’s purchase orders (“Orders”)
for the Products accepted in writing by the Supplier (the “Contract”).

2.                         QUANTITY

The Purchaser indicates
in principle that the maximum quantity of the Products to be purchased from the
Supplier for the following respective periods shall be as follows:

(a)                    4,500 metric
tons for the 6 months ending 30 June 2004;

(b)                   20,000 metric
tons for the 12 months ending 30 June 2005;

(c)                    30,000 metric
tons for the 12 months ending 30 June 2006; and

(d)                   18,000 metric
tons for the 6 months ending 31 December 2006.

The parties agree that
the quantities indicated above are non binding and may be varied by them from
time to time based on changes in the Supplier’s and/or the Purchaser’s
marketing strategy or changes in the economic and market conditions affecting
the Supplier’s and/or the Purchaser’s business including any decline in the
aluminum extrusion market, which may adversely affect the Purchaser’s demand.

 1
 

 

3                            PRICE

3.1                    The price of
the Products shall be the Supplier’s quoted price, which shall be determined by
reference to the then prevailing ingot price per metric ton in US$ as quoted on
the London Metal Exchange at the time of confirmation of the Order plus a
processing fee based on the level and complexity of the processing work in
accordance with the specification of the Products.

3.2                    A price list
for different levels of processing work acknowledged by the Parties is set
forth in Schedule A. The Parties agree that the prices of the Products as shown
in the list are not binding on the Parties but are intended for the reference
of the Parties when agreeing on the prices of the Products for the Orders.

4                            TERMS
OF PAYMENT

4.1                    Subject to any
special terms agreed in writing between the Purchaser and the Supplier, the
Supplier may invoice the Purchaser for the price of the Products on or at any
time after delivery of the Products and that the Purchaser shall pay the price
of the Products within 60 days of the date of the Supplier’s invoice;

4.2                    If the
Purchaser fails to make any payment on the due date then, without limiting any
other right or remedy available to the Supplier, and unless such failure is due
to any of the matters stated in paragraph 5 below or other breach of Contract
by the Supplier resulting in the Purchaser’s dispute in good faith regarding
payment, the Supplier may:

4.2.1          cancel the Contract or
suspend any further deliveries to the Purchaser under any Contract;

4.2.2          scrap and reclaim any
Products which are the subject of any Contract by the Purchaser, whether or not
appropriated thereto; or

4.2.3          charge the Purchaser
interest (both before and after any judgment) on the amount unpaid at the rate
of 10 per cent per annum (both before and after any judgment) from (a) (in the
case of overdue price for the Products) the date of delivery of the relevant
Products or (b) (in all other cases) from the date on which payment is due
until payment in full is made.

Provided that the
Supplier may at its discretion waive any of the above rights. However, no
waiver of any of the above rights, in one or more instances, will be deemed or
construed as a further or continuing waiver of any of the rights set forth
above.

 2
 

 

5                            DELIVERY,
INSPECTION AND ACCEPTANCE

5.1                    Title to and
all risk of loss or damage with regard to the Products will pass to Purchaser
upon delivery by Supplier to the carrier designated by, for or on behalf of
Purchaser in its Orders or otherwise.

5.2                    Supplier
agrees to deliver to the carrier designated by Purchaser all Products by the
delivery dates designated by Purchaser in its Orders duly accepted by the
Supplier. Purchaser’s remedies for delay in delivery will include the recovery
of Purchaser’s reasonable out-of-pocket expenses and (upon notice in writing as
soon as practicable to Supplier of such purchase) the difference in the
reasonable cost to Purchaser of any Products purchased from another
manufacturer (where applicable) to cover the delay, as compared to Supplier’s
price.

5.3                    Subject to
paragraph 5.4 below, Purchaser will have the right to refuse to accept or to
reject any Products at any time should the Products fail to meet applicable
specifications or are otherwise defective or faulty at the time title passes to
Purchaser. If it is proved that the Supplier is in default of its obligations
in relation to the quality of the Products pursuant to an Order, Supplier will
be responsible for reimbursement to Purchaser for any reasonable costs incurred
in inspecting, processing, scrapping, handling, and transporting defective or
faulty Products.

5.4                    The Purchaser
shall, without prejudice to the other rights and remedies of the Purchaser, be
entitled, within three months from the date of receipt of the Products in the
United States of America and Canada (but not otherwise save as otherwise
expressly provided herein), by notice in writing to the Supplier reject all, or
any part, of the Products that are the subject matter of any Order in any one
or more of the following events: (1) all or any of the Products are not fit for
their respective purposes (if any) made known to the Supplier in writing, (2)
all or any of the Products do not comply with applicable specifications; (3)
all or any of the Products are not of merchantable quality; and (4) all or any
of the Products do not correspond in all material respects with any and all
samples or do not correspond with the descriptions contained in such Order, or
both.

6                            TERM

This Agreement shall be
deemed to have commenced on 1 January 2004 and shall continue until 31 December
2006 (the “Initial Term”), and shall be renewed for successive three
years terms unless terminated by either party giving a prior written notice of
three months to the other. Termination of this Agreement shall not affect the
rights and obligations of either party under any Contract.

7                            MISCELLANEOUS

7.1                    The Supplier
is a member of a group of companies, and accordingly, the Supplier may perform
any of its obligations or exercise any of its rights under this Agreement or

 3
 

 

any Contract by itself or
through any company which is at the relevant time the holding company of or
subsidiary of the Supplier or the subsidiary of any such holding company,
provided that any act or omission of any such other member shall be deemed to
be the act or omission of the Supplier.

7.2                    The Purchaser
is a member of a group of companies, and accordingly, the Purchaser may perform
any of its obligations or exercise any of its rights under this Agreement or
any Contract by itself or through any company which is at the relevant time the
holding company of or subsidiary of the Purchaser or the subsidiary of any such
holding company, provided that any act or omission of any such other member
shall be deemed to be the act or omission of the Purchaser.

7.3                    Each party
agrees to indemnify, defend, and hold the other party harmless from any and all
claims, liabilities, damages, reasonable costs and expenses (including, without
limitation, reasonable attorney’s fees and expenses) suffered or incurred by that
other party resulting from, arising out of or relating to any breach by it of
its warranties, covenants or agreements under this Agreement.

7.4                    A notice
required or permitted to be given by either party to the other under the terms
herein shall be in writing addressed to that other party at its registered
office or principal place of business or such other address as may at the
relevant time have been notified pursuant to this provision to the party giving
the notice.

7.5                    This Agreement
is governed by and shall be construed in all respects in accordance with laws
of the United States and the state of Delaware as applicable to contracts made
and to be performed in the state of Delaware without regard to conflict of law
principles and the parties hereby submit to the non-exclusive jurisdiction of
the courts of Delaware in connection herewith.

7.6                    To the extent
the provisions of any Contract are inconsistent with or conflict with this
Agreement the terms of this Agreement shall prevail.

IN WITNESS WHEREOF, each party has caused this Agreement
to be executed by its duly authorized representative on the date first written
above.

	
  Indalex, Inc

  	
  Asia Aluminum Group Limited

  
	
   

  	
   

  
	
   

  	
   

  
	
  By

  	
  :

  	
  /s/ Trj Stubbs

  	
   

  	
  By

  	
  :

  	
  /s/ Benby Chan

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Name

  	
  :

  	
  TRJ STUBBS

  	
   

  	
  Name

  	
  :

  	
  BENBY CHAN

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Title

  	
  :

  	
  CEO

  	
   

  	
  Title

  	
  :

  	
  DIRECTOR

  	
   

  

 

 4
 

 

 

SCHEDULE A 

PRODUCT PRICES

	
  Press Size

  	
   

  	
  550 T

  	
   

  	
  800-1350 T

  	
   

  	
  1750-2000 T

  	
   

  	
  2750-4000 T

  	
   

  
	
   

  	
   

  	
  (US$/MT)

  	
   

  	
  (US$/MT)

  	
   

  	
  (US$/MT)

  	
   

  	
  (US$/MT)

  	
   

  
	
  Mill
  Finish

  	
   

  	
  550

  	
   

  	
  550

  	
   

  	
  650

  	
   

  	
  800

  	
   

  
	
  Anodizing
  (10-15u) premium over Mill Finish

  	
   

  	
  440

  	
   

  	
  310

  	
   

  	
  320

  	
   

  	
  320

  	
   

  
	
  Painting
  (1 coat), Premium over Mill Finish

  	
   

  	
  450

  	
   

  	
  375

  	
   

  	
  375

  	
   

  	
  375

  	
   

  
	
  Brite
  Dip (Chemical Polish) premium over Mill Finish

  	
   

  	
  850

  	
   

  	
  850

  	
   

  	
  750

  	
   

  	
  —

  	
   

  
	
  Transparency Coating, premium
  over Mill Finish

  	
   

  	
  590

  	
   

  	
  490

  	
   

  	
  400

  	
   

  	
  400

  	
   

  

 

The Product prices listed
above are subject to the following provisions:-

1.                          All
prices are based on +LME per Metric Ton (“MT”) in US$, FOB Shansan Port in
South China near Foshan.

2.                          All
Product prices include all packaging specified in the applicable
specifications.

3.                          The LME
price component of the Product prices is determined by the LME 3 months future
prices at the same day as to the placement of the order.

4.                          All
prices quoted for specific orders are inclusive of all items specified in any
request for price quotation, and they shall remain effective for the life of
the order.

5.                          All
prices are quoted and all transactions will be executed in US Dollars.

6.                          Categorization
of new Products within the above table will be subject to agreement between the
Purchaser and the Supplier, prior to placement of the Order.

 5

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