Document:

exv4w8

 

Exhibit 4.8

EQUITY TRANSFER AGREEMENT

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

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

		
	 	     WHEREAS:

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

 

 

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

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

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

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

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

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

 

 

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

 

 

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

 

 

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

 

 

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

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

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

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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

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

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

	By: Ye Li Mao	 	By: John Finlay

	 	 	 
	Title: Director	 	
Title: Director

 

 

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

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

#

SCHEDULE ONE

TRANSFER OF EQUITY INTEREST

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Before Transfer	 	After Transfer
	 	 	
	 	

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

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

 

 

SCHEDULE TWO

EMPLOYEES

 

SCHEDULE THREE

LOANS AND SECURITIES

 

ANNEXURE A

REVISED ARTICLES OF ASSOCIATION

 

ANNEXURE B

REVISED JOINT VENTURE CONTRACT

 

ANNEXURE C

LEGAL REPRESENTATIVE’S UNDERTAKING AND GUARANTEE

TO:

Trench (UK) Limited

South Drive

Hebburn, Tyne & Wear NE31 1UW

 

 

Trench Limited

71 Maybrook Drive

Scarborough, Ontario

Canada M1V 4B6

Shanghai Instrument Transformer Works

427 Jumen Road

Shanghai

PRC

Fushun Reyrolle Bushing Co., Limited

Economic Development Area

Fushun, Liaoning Province,

PRC

26th September 2002

Dear Sirs

PERSONAL UNDERTAKING

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

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

 

 

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

 

 

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

DISCLOSURE SCHEDULE

	 	1.	 	Fushun Court Orders described in paragraphs (i) to (iv) or Article 1.1(r) of
the Equity Transfer Agreement, being the following property preservation orders
issued by the Fushun City Intermediate Court:
	 
	 	(a)	 	Against the FEPW’s equity holdings in the Company in favour of the Fushun City
Social Security Insurance General Corporation issued on 11 April 2002;
	 
	 	(b)	 	Against the FEPW’s equity holdings in the Company and debts in favour of the
Fushun City Housing Fund Administrative Bureau issued on 18 July 2002;
	 
	 	(c)	 	Against the FEPW’s equity holdings in the Company and its deposits or assets in
favour of the Bank of China Fushun Branch issued on 30 August 2002; and
	 
	 	(d)	 	the enforcement assistance order issued to the Company in relation to the
property preservation order described in paragraph (iii) dated 2 September
2002.
	 
	 	1.	 	Statutory preemptive rights of Trench (UK) Limitedexv4w9

 

	 	 	 
	 	 	Exhibit 4.9
	 	 
	 	 	Contract No.: 02190

 

DATED           April 2002

 

TRENCH LIMITED

 

AND

 

SHANGHAI INSTRUMENT TRANSFORMER WORKS CO LTD

 

SHANGHAI SITICO INTERNATIONAL TRADING COMPANY

 

AND

 

MWB (SHANGHAI) CO LTD

 

SHUNT REACTOR TECHNOLOGY HEAD-LICENCE AGREEMENT

 

 

CONTENTS

	 	 	 	 	 
	CLAUSE	 	PAGE
	
	 	

	1. DEFINITIONS
	 	 	2	 
	 
	 	 	 	 
	2. SCOPE AND CONTENTS OF SHUNT REACTOR TECHNOLOGY AND KNOW-HOW
	 	 	5	 
	 
	 	 	 	 
	3. COMPLIANCE WITH LAWS
	 	 	7	 
	 
	 	 	 	 
	4. PAYMENTS
	 	 	8	 
	 
	 	 	 	 
	5. TAX
	 	 	9	 
	 
	 	 	 	 
	6. TECHNICAL DOCUMENTATION
	 	 	9	 
	 
	 	 	 	 
	7. VERIFICATION AND ACCEPTANCE
	 	 	9	 
	 
	 	 	 	 
	8. QUALITY AND INSPECTION
	 	 	10	 
	 
	 	 	 	 
	9. CONFIDENTIALITY
	 	 	10	 
	 
	 	 	 	 
	10. CLAIMS AND INFRINGEMENTS
	 	 	10	 
	 
	 	 	 	 
	11. WARRANTIES
	 	 	11	 
	 
	 	 	 	 
	12. TERM AND TERMINATION
	 	 	11	 
	 
	 	 	 	 
	13. AGENCIES
	 	 	13	 
	 
	 	 	 	 
	14. FORCE MAJEURE
	 	 	13	 
	 
	 	 	 	 
	15. LIABILITY FOR BREACH
	 	 	14	 
	 
	 	 	 	 
	16. SETTLEMENT OF DISPUTES
	 	 	13	 
	 
	 	 	 	 
	17. ASSIGNMENT
	 	 	13	 
	 
	 	 	 	 
	18. APPROVAL AND REGISTRATION
	 	 	15	 
	 
	 	 	 	 
	19. NOTICES
	 	 	15	 
	 
	 	 	 	 
	20. GENERAL
	 	 	17	 
	 
	 	 	 	 
	SCHEDULE 1 LIST OF LICENCED PRODUCTS AND MAIN CONTENTS OF TECHNICAL DOCUMENTATION
	 	 	19	 
	 
	 	 	 	 
	SCHEDULE 2 EMPLOYEE CONFIDENTIALITY AGREEMENT
	 	 	21	 

1

 

THIS SHUNT REACTOR TECHNOLOGY
HEAD-LICENCE AGREEMENT (the “Agreement”) is made
on _______ April 2002.

BETWEEN

	(1)	 	TRENCH LIMITED (“Licensor”), a company duly organised and existing under
the laws of Canada whose registered office is at 71 Maybrook Drive,
Scarborough, Ontario M1V 4B6, Canada;
	 
	(2)	 	SHANGHAI INSTRUMENT TRANSFORMER WORKS CO LTD (the “SITW”), a legal person
organised and existing under the laws of the PRC and registered with the
State Administration of Industry and Commerce whose legal address is at
427 Jumen Road, Shanghai, People’s Republic of China; and
	 
	(3)	 	SHANGHAI SITICO INTERNATIONAL TRADING COMPANY (the “SITICO”), a legal
person organised and existing under the laws of the PRC and registered
with the State Administration of Industry and Commerce whose legal address
is at 111 Jiu Jiang Road, Shanghai, the People’s Republic of China.
	 
	(4)	 	MWB (SHANGHAI) CO LTD (the “Joint Venture Company”), limited liability
equity joint venture company organised and existing under the laws of the
PRC and registered with the State Administration of Industry and Commerce
whose legal address is at No 3658 Jiangcheng Road, Shanghai, the People’s
Republic of China.
	 
	 	 	For the purposes of this Agreement, SITW shall be referred to as the
“Licensee” unless otherwise provided. SITICO shall act as the agent of
the Licensee only for the import of the Shunt Reactor Technology and
Know-how, which shall only be obliged to perform the payment obligations
and other related commercial obligations as agent for SITW related to the
import of the Shunt Reactor Technology and Know-how. SITICO shall not
acquire any rights in relation to this Shunt Reactor Technology and
Know-how as a result of entering into this Agreement. SITICO will not be
responsible for any breach by the Licensee and the Joint Venture Company.

WHEREAS

	(A)	 	Pursuant to a joint venture contract (the “Joint Venture Contract”) and
articles of association each dated 12 November 1992, the Licensee and MWB
High Voltage Systems GmbH (“MWB”) (which has since been restructured as
Trench Germany GmbH) established the Joint Venture Company.
	 
	(B)	 	Pursuant to the terms of the Restated JV Contract (as defined below), the
Combined Coil Products (as defined below) are to be added to the business
of the Joint Venture Company.
	 
	(C)	 	The Licensor is the owner of the Shunt Reactor Technology and Know-how
relating to the Licensed Products.
	 
	(D)	 	The Parties intend to enter into this Agreement for the license by the
Licensor to the Licensee of the right to sub-license the Shunt Reactor
Technology and Know-how relating to the Licensed

1

 

	 	 	Products to the Joint Venture Company in the Licensed Territory (in each
case as defined below) upon the terms and conditions set forth herein.

NOW IT IS AGREED between the Parties and follows:

	1.	 	DEFINITIONS
	 
	1.1	 	Unless otherwise defined in this Agreement, terms defined in the Restated
JV Contract shall have the same meanings when used in this Agreement.
	 
	1.2	 	In addition, the following words and expressions shall have the meanings
given to them below when used in this Agreement:
	 
	 	 	“Approval” means approval of the Amendment by the Examination and
Approval Authority.
	 
	 	 	“Approval Date” means the date on which the Approval is granted.
	 
	 	 	“Affiliate” means in relation to each Party, any person who is directly
or indirectly controlling or controlled by or under direct or indirect
common control with such Party and any parent of such Party. For the
purposes of this definition, “control” when used with respect to any
person means the ownership of over fifty percent (50%) of the voting
stock, registered capital or other interest of that person, directly or
indirectly, whether through the ownership of voting securities, by
contractor otherwise, or the power to appoint the manager or majority of
members of the management committee, board of directors or equivalent
decision making body.
	 
	 	 	“Amendment” means the Amendment to the Restated JV Contract and the
Amendment to the Restated Articles of Association dated on or about the
date of this Agreement.
	 
	 	 	“Center” has the meaning given in Clause 16.1.
	 
	 	 	“Combined Coil Products” means the Line Trap Products, Series Reactor
Products and Shunt Reactor Products.
	 
	 	 	“Combined Coil Technology Agreements” means this Agreement, Series
Reactor Technology Head Licence Agreement and Line Trap Technology Head
Licence Agreement.
	 
	 	 	“Combined Coil Technology and Know-how” means the Line Trap Technology
and Know-how, Series Reactor Technology and Know-how and Shunt Reactor
Technology and Know-how.
	 
	 	 	“Conversion Date” means, in relation to the conversion of Renminbi to US
Dollars for the purpose of paying the Technology Licence Fee hereunder,
the date falling five (5) banking days before the date on which the
Technology Licence Fee is due.
	 
	 	 	“Conversion Rate” means the official exchange rate published by the
People’s Bank of China, Shanghai Branch prevailing on the Conversion
Date.
	 
	 	 	“Execution Date” means the date on which this Agreement is signed.

2

 

	 	 	“Effective Term” means the period commencing on the Approval Date and
expiring on the date of expiration of the Royalty Term.
	 
	 	 	“Examination and Approval Authority” means the Ministry of Foreign Trade
and Economic Cooperation or the authority entrusted by such Ministry to
register this Agreement and approve the Amendment.
	 
	 	 	“Force Majeure” has the meaning given in Clause 14.1.
	 
	 	 	“Improvements” means any improvement, modification or alteration to the
Licensed Products or to the Shunt Reactor Technology and Know-how.
	 
	 	 	“Licensed Products” means the products defined in Schedule 1 under the
heading “Licensed Coverage”.
	 
	 	 	“Licensed Territory” means China (but excludes the Hong Kong SAR, Macau
and Taiwan).
	 
	 	 	“Line Trap Products” means the licensed products under the Line Trap
Technology Head Licence Agreement.
	 
	 	 	“Line Trap Technology and Know-how” has the meaning ascribed to it in the
Line Trap Technology Head Licence Agreement.
	 
	 	 	“Line Trap Technology Head Licence Agreement” means the agreement titled
“Line Trap Technology Head Licence Agreement” between the parties dated
on or about the same date as this Agreement.
	 
	 	 	“Parties” means the Licensee, the Licensor and the Joint Venture Company,
and “Party” means any of them.
	 
	 	 	“PRC” or “China” means the People’s Public of China.
	 
	 	 	“Restated JV Contract” means the restated joint venture contract dated 7
April 2000 as amended by the Amendment between the SITW, Trench Germany
GmbH, Trench Switzerland AG and the Licensor.
	 
	 	 	“Royalty Term” means the period of 9 years and 8 months from the date of
issue by the Joint Venture Company of the first commercial invoice for
any of the Combined Coil Products .
	 
	 	 	“Series Reactor Products” means the licensed products under the Series
Reactor Technology Head Licence Agreement.
	 
	 	 	“Series Reactor Technology and Know-how” has the meaning ascribed to it
in the Series Reactor Technology Head Licence Agreement.
	 
	 	 	“Series Reactor Technology Head Licence Agreement” means the agreement
titled “ Series Reactor Technology Head Licence Agreement” between the
parties dated on or about the same date as this agreement.

3

 

	 	 	“Shunt Reactor Products” means the Licensed Products under this
Agreement.
	 
	 	 	“Shunt Reactor Technology and Know-how” means the Licensor’s knowledge,
technology and methods necessary for the manufacture, management, quality
control, quality inspection, packaging and sale of the Licensed Products
and supplied in accordance with this Agreement, whether in written form,
drawing or otherwise, and which includes, without limitation, at least
the following:

	 	(a)	 	raw materials, product and process specifications, product
formulae, design information and drawings as well as technical
specifications of the production equipment and processing
specifications;
	 
	 	(b)	 	technology, techniques, quality control, quality inspection,
technology standards and good manufacturing practices required for
production;
	 
	 	(c)	 	information and experience required for installation,
testing, use, inspection, repair and maintenance of production
equipment;
	 
	 	(d)	 	information and experience for management of operation
procedures, production, quality control, marketing and sales;
	 
	 	(e)	 	information on marketing, label design, advertising,
promotional materials and other techniques;
	 
	 	(f)	 	information relating to the latest improvements, corrections
and developments to or of the technology and know-how licensed under
this Agreement; and
	 
	 	(g)	 	the detailed documents and appendices relating to the content
of the technology and know-how licensed under this Agreement, as
summarised in Schedule 1.

	 	 	“Shunt Reactor Technology Head Licence Agreement” means this Agreement.
	 
	 	 	“Shunt Reactor Test Date” means the date on which Licensor and the Joint
Venture Company sign a test report to certify that the 69kv Shunt Reactor
manufactured according to Chinese standard specifications using the Shunt
Reactor Technology and Know-how has been successfully type tested.
	 
	 	 	“Sub-Licence Agreement” means the agreement entered into between SITW,
the Licensor and the Joint Venture Company for the license of Combined
Coil Technology and Know-how dated on or about the date of this
Agreement.
	 
	 	 	“Technical Documentation” means documentary materials relating to the
Combined Coil Technology and Know-how furnished to the Joint Venture
Company by the Licensor in accordance with this Agreement (as summarised
in Schedule 1) and the other Combined Coil Technology Agreements.

4

 

	 	 	"Technical Service Agreement” means the agreement between the Licensor
and the Joint Venture Company for the provision of technical services
dated on or about the date of this Agreement.
	 
	 	 	"Technology Licence Fee” has the meaning given in Clause 4.1.
	 
	 	 	"US Dollar” or “US$” means the lawful currency of the United States of
America.
	 
	1.3	 	The table of contents and headings to the Clauses and Schedules are
inserted for convenience of reference only and shall be ignored in the
interpretation of this Agreement.
	 
	1.4	 	In this Agreement, unless the context otherwise requires:

	 	 	(a)	references to Clauses and Schedules are to the clauses of and
the schedules annexed to this Agreement;
	 
	 	 	(b)	words importing the plural shall include the singular, and
vice versa;
	 
	 	 	(c)	references to a “person” shall be construed as including
references to an individual, enterprise, firm, partnership,
consortium, joint venture, association, joint stock company, trust,
unincorporated organisation or governmental or non governmental
organisation, whether or not having separate legal personality; and
	 
	 	 	(d)	“including” and similar expressions are not words of
limitation.

	2.	 	SCOPE AND CONTENTS OF SHUNT REACTOR TECHNOLOGY AND KNOW-HOW
	 
	2.1	 	Subject to the terms and conditions contained herein, the Licensor hereby
grants within the Licensed Territory to the Licensee and the Licensee
hereby accepts from the Licensor, an exclusive, non-transferable licence
of the Shunt Reactor Technology and Know-how for the Effective Term,
granted strictly in accordance with the terms of this Agreement and only
to the extent that the Licensee sub-licence, strictly in accordance with
the terms of the Sub-Licence Agreement the Shunt Reactor Technology and
Know-how, together with the Line Trap Technology and Know-how and the
Series Reactor Technology and Know-how, to the Joint Venture Company in
connection with the manufacture and sale of the Combined Coil Products,
including the Licensed Products, by the Joint Venture Company in the
Licensed Territory. Nothing in this Agreement shall entitle the Licensee
to use the Shunt Reactor Technology and Know-how other than to sub-licence
the same to the Joint Venture Company.
	 
	2.2	 	The Licensor shall send experts or technical personnel and provide
complete, timely and adequate technical support to provide the Shunt
Reactor Technology and Know-how to the Joint Venture Company as specified
in the agreed training program pursuant to this Agreement, the Sub-Licence
Agreement and the Technical Service Agreement. The experts and technical
personnel may be employees of the Licensor or be retained by the Licensor
from other sources. The Shunt Reactor Technology and Know-how shall be
transferred after the training program has been formulated and agreed by
the Joint Venture Company and the Licensor.

5

 

	2.3	 	In the event that the Licensee or the Joint Venture Company encounter
technical difficulties that the Parties recognise that the Licensee or, as
the case may be, the Joint Venture Company cannot resolve by itself, the
Licensor shall, send experts or technical personnel to assist in resolving
such technical problems as provided in Clause 3.2 of the Technical Service
Agreement.

	2.4	 	2.4.1	During the Effective Term, if the Licensee and/or Joint Venture
Company makes or acquires any Improvements relating to the Licensed
Products it shall, to the extent that it is not prohibited by any
applicable law:

	 	 	(a)	promptly notify the Licensor in writing giving
details of the Improvements and shall provide the Licensor
with such information or explanations as the Licensor may
request; and
	 
	 	 	(b)	procure that the Licensor may legally and
effectively own and use the Improvements to enable the
Licensor to grant the Licensee a non-exclusive licence to use
the Improvements free of charge for the sole purpose of
sub-licensing the same to the Joint Venture Company in
accordance with the Sub-Licence Agreement.

	 	 	2.4.2	 If any applicable law prohibits ownership by Licensor of any
Improvement made or acquired by the Joint Venture Company then such
Improvement shall be owned and used by the Joint Venture Company
subject as provided below:

	 	 	(a)	Clause 2.4.2 shall by only relate to Improvements
made or acquired whilst the relevant prohibition is in force
in China;
	 
	 	 	(b)	The Joint Venture Company shall own and use the
Improvement subject to the same conditions as apply to its use
of the Shunt Reactor Technology and Know-how;
	 
	 	 	(c)	The relevant Improvement shall be forthwith
exclusively licensed to the Licensor for as long as required
by the Licensor free of charge and unconditionally; and
	 
	 	 	(d)	The Joint Venture Company shall not sell or
dispose of any interest in or to the Improvement without the
consent of the Licensor.

	2.5	 	If the Licensor makes or acquires any Improvements relating to the
Licensed Products it shall, within twelve (12) months after the
Improvements have been verified in commercial production by the Licensor,
provide the Licensee details of the Improvements and such information or
explanations as the Licensee may request for the sole purpose of
sub-licensing the Improvements to the Joint Venture Company, subject to
the restriction of Clause 2.1, free of charge.
	 
	2.6	 	The Licensee shall not (i) assign or otherwise transfer the Shunt Reactor
Technology and Know-how, or any other rights granted to it under this
Agreement, to any third party, or (ii) sub-

6

 

	 	 	license the Shunt Reactor Technology and Know-how to any entity other
than the Joint Venture Company without the prior written consent of the
Licensor.
	 
	2.7	 	Upon the expiry of this Agreement, the Licensee may continue to use the
Shunt Reactor Technology and Know-how (but solely to the extent and for
the purpose referred to in Clause 2.1) without entering into a new
technology licence agreement provided that the Licensee shall remain
subject to the following provisions of this Agreement: 2.4, 2.6, 2.11 3,
9, 10, 12, 15, 16, 19, 20 and 21. However, if after the expiration of this
Agreement, the Licensee requests to use or licence any know-how newly
developed by the Licensor after the expiration of this Agreement for any
purpose whatsoever, the Parties shall enter into a new technology know-how
licence agreement and register the same with the Examination and Approval
Authority.
	 
	2.8	 	The Licensor and the Joint Venture Company shall formulate a training
program for personnel of the Joint Venture Company to master the Combined
Coil Technology and Know-how, including the Shunt Reactor Technology and
Know-how licensed hereunder, and shall specify the qualifications of
personnel suitable for receiving such training. The Licensor shall be
responsible for such training in order to ensure that employees of the
Joint Venture Company receive adequate training in the design and
manufacture of the Licensed Products.
	 
	2.9	 	If such training as aforesaid is to be conducted within the PRC, the
Licensor will be responsible for expenses relating to travel and lodging
(including food) of its personnel sent to the Joint Venture Company for
conducting such training and the Joint Venture Company shall bear all
other expenses relating thereto. If the Joint Venture Company retains
experts who are not employees of the Licensor or its Affiliates to conduct
training in China, the Joint Venture Company shall bear all related
expenses.
	 
	2.10	 	If such training as aforesaid is to be conducted outside the PRC, the
Joint Venture Company shall be responsible for expenses relating to travel
and lodging (including food) of personnel of the Joint Venture Company
sent for such training and the Joint Venture Company shall be responsible
for all other expenses relating thereto.
	 
	2.11	 	The Licensee shall obtain the prior written approval of the Licensor
before permitting the Joint Venture Company to proceed with each proposed
use by the Joint Venture Company of any of the Combined Coil Technology
and Know-how, including the Shunt Reactor Technology and Know-how. If the
proposed use is not in conformity with this Agreement, the Licensor may,
in its sole discretion, refuse to approve such a proposal, or may amend
the proposal to bring it into conformity with this Agreement within a
reasonable period from the receipt of the proposed use, and the Licensee
shall, accept such refusal or amendment.
	 
	3.	 	COMPLIANCE WITH LAWS
	 
	 	 	The Licensee shall, observe and comply with all laws, rules and
regulations applicable to the sub-licensing of the Licensed Products in
the Licensed Territory. The Licensee shall, at its own cost and expense,
secure and maintain all necessary governmental permits, licences and
approvals, and will fulfil all other requirements and undertakings
related to this Agreement which are or may become necessary under any law
or regulation, now or hereafter existing in the PRC, to enable the
Parties to exercise, enforce and enjoy all of the rights and obligations

7

 

	 	 	contained in this Agreement, including, but not limited to, registration
certificate required from the Examination and Approval Authority and
approvals if any necessary to enable the payment and remittance of the
Technology Licence Fee to the Licensor in accordance with Clause 4.
	 
	4.	 	PAYMENTS
	 
	4.1	 	The Licensee shall pay through SITICO to the Licensor a technology
licence fee (the “Technology Licence Fee”) in an amount of Four Million
United States Dollars (US$4,000,000) as follows:

	 	 	(a)	31.25% of the Technology Licence Fee equal to one million two
hundred and fifty thousand United States dollars (US$1,250,000) on
or before 30 June 2004. This date may be extended to the Shunt
Reactor Test Date if the Shunt Reactor Test Date is later than 30
June 2004 although it is expected that the Shunt Reactor Test Date
shall not be later than 30 June 2004. In any event, payment shall
only be required after receipt by Licensee and SITICO of the
commercial invoice and payment instruction issued by the Licensor.
	 
	 	 	(b)	31.25% of the Technology Licence Fee equal to one million two
hundred and fifty thousand United States dollars (US$1,250,000) on
or before the expiration of 12 months after the day of the payment
referred to in paragraph (a). In any event, payment shall only be
required after receipt by Licensee and SITICO of the commercial
invoice and payment instruction issued by the Licensor.
	 
	 	 	(c)	37.5% of the Technology Licence Fee equal to one million five
hundred thousand United States dollars (US$1,500,000) on or before
the expiration of 12 months after the day of payment referred to in
paragraph (b). In any event, payment shall only be required after
receipt by Licensee and SITICO of the commercial invoice and payment
instruction issued by the Licensor.

	4.2	 	The Licensee and SITICO shall pay the Technology Licence Fee to such
account or accounts as shall be specified in writing by the Licensor to
the Licensee.
	 
	4.3	 	All relevant bank charges incurred with respect to the payment of the
Technology Licence Fee in the PRC shall be borne by the Licensee and
SITICO.
	 
	4.4	 	In the event the Licensee and SITICO are unable to pay the Technology
Licence Fee in US Dollars or another foreign currency acceptable to the
Licensor as a result of any change in the foreign exchange laws or
interpretation or application thereof, the Licensee and SITICO may, upon
obtaining the prior written agreement of the Licensor, pay the Technology
Licence Fee in RMB. In such case, the Licensee and SITICO shall assist the
Licensor to convert the RMB into US Dollars or another foreign currency
acceptable to the Licensor at the Conversion Rate on the Conversion Date,
but the foreign exchange risk and related costs shall be borne by the
Licensor.

8

 

	5.	 	TAX
	 
	5.1	 	Where the Licensee and SITICO are required under PRC law to withhold tax
(including business tax) on the Technology Licence Fee receivable by the
Licensor under this Agreement, the Licensee and SITICO shall withhold the
same and pay over the same to the relevant PRC tax authority on behalf of
the Licensor. The Licensee and SITICO undertake to deliver promptly to the
Licensor all receipts, certificates or other proof evidencing each amount
withheld and paid by the Licensee and SITICO on account of such tax.
	 
	5.2	 	The Licensee and SITICO agree and undertake to assist the Licensor to the
greatest extent possible in applying for all tax benefits that the
Licensor may be entitled to under Chinese law.
	 
	5.3	 	All taxes to be levied inside and outside PRC on Licensor in connection
with the payment made to the Licensor under this Agreements shall be borne
by the Licensor.
	 
	6.	 	TECHNICAL DOCUMENTATION
	 
	 	 	The Licensor shall have the right to make necessary amendments to the
Technical Documentation from time to time.
	 
	7.	 	VERIFICATION AND ACCEPTANCE
	 
	7.1	 	As soon as is practicable after delivery of the Technical Documentation,
the Licensor and the Joint Venture Company shall conduct test-runs to
determine whether the equipment of the Joint Venture Company can produce
the Licensed Products at quality standards which satisfy the quality
standards specified by the Licensor’s Shunt Reactor Technology and
Know-how. After the conduct of successful test-runs, the Licensor and the
Joint Venture Company shall sign an acceptance certificate to such effect.
	 
	7.2	 	Test runs of equipment shall be conducted jointly by the Licensor and the
Joint Venture Company. A test run is the testing of installed machinery
with respect to performance (speed and capacity) and quality.
	 
	7.3	 	Neither the Licensor nor the Licensee shall be responsible for the Joint
Venture Company’s losses resulting from:-

	 	 	(a)	the raw materials purchased by the Joint Venture Company
directly or indirectly not conforming to the raw material standards
in the Technical Documentation:
	 
	 	 	(b)	lack of experience of the Joint Venture Company’s personnel
in manufacturing the Licensed Products resulting in errors; or
	 
	 	 	(c)	Force Majeure.

9

 

	8.	 	QUALITY AND INSPECTION
	 
	8.1	 	The Licensee shall, sub-licence the Joint Venture Company to,
manufacture, store, analyse, test and sell the Licensed Products only in
strict accordance with the Shunt Reactor Technology and Know-how supplied
by the Licensor.
	 
	9.	 	CONFIDENTIALITY
	 
	9.1	 	The Licensee shall, on and from the Execution Date, during the term of
this Agreement and within five (5) years after its termination or
expiration for any reason, keep confidential and not, for any purpose
other than the performance of its obligations under this Agreement, make
use of or disclose to any other person otherwise than in accordance with
Clause 9.2 or with the prior written consent of the Licensor, the scope
and content of the Combined Coil Technology and Know-how, including the
Shunt Reactor Technology and Know-how, including but not limited to,
information contained in the Technical Documentation (if any has been
delivered to the Licensee), and any other information disclosed (whether
in writing, verbally or by other means) by or on behalf of the Licensor,
unless such technology and know-how is public knowledge or is otherwise
required by applicable laws or regulations or by an order of a court
having competent jurisdiction.
	 
	9.2	 	During the Effective Term, the Licensee may disclose information which is
confidential under Clause 9.1 to the Joint Venture Company or their
respective employees, but only to the extent necessary for the purposes of
this Agreement and provided such employees have signed a confidentiality
agreement in the form set out in Schedule 2.
	 
	9.3	 	The Licensee shall at its own expense, take such steps as the Licensor
may require to enforce the terms of any confidentiality contract executed
pursuant to Clause 9.2 including, but not limited to, the initiation,
prosecution and enforcement of any legal proceedings.
	 
	10.	 	CLAIMS AND INFRINGEMENTS
	 
	10.1	 	The Licensee shall immediately notify the Licensor of any claim, or any
fact which may lead to a claim, of any nature by a third party that the
sub-licensing of the Shunt Reactor Technology and Know-how by the Licensee
the use of the Shunt Reactor Technology and Know-how by the Joint Venture
Company is or may be an infringement of a patent or other proprietary
right of such third party, but otherwise shall take no action relating to
such claim or infringement without the Licensor’s written consent. The
Licensor shall advise the Licensee whether it wishes to conduct a defence
of any such claim. Should the Licensor elect to conduct such a defence, it
shall do so at its own expense, and the Licensor shall have sole control
of such defence and the Licensee shall give all reasonable assistance to
the Licensor to enable it to do so.
	 
	10.2	 	The Licensor shall indemnify the Licensee and bear related costs for any
claims, losses, damages, proceedings sustained by the Licensee in relation
to any claims that may be made against the Licensee pursuant to Clause
10.1, unless such claims, losses, damages, proceedings result from the
default by the Licensee of their obligations under this Agreement or the
use of Shunt Reactor Technology and Know-how by the Licensee otherwise
than in accordance with this Agreement.

10

 

	10.3	 	If any third party takes any action in connection with the sub-licensing
of the Shunt Reactor Technology and Know-how by the Licensee and thereby
hinders the Licensee from sub-licensing the Shunt Reactor Technology and
Know-how to the Joint Venture Company for the manufacture, packaging or
sale of the Licensed Products, the Licensor shall be responsible for
taking action, including defending any legal claim or reconciling with a
third party to remove such hindrance.
	 
	10.4	 	In the event that the Licensor elects not to take action under Clause
10.3, the Licensee may, with the written consent of the Licensor, take
action in relation to the relevant infringement, and the Licensor shall
reimburse the Licensee for any costs and expenses incurred for taking such
action and give all reasonable assistance in connection therewith.
	 
	10.5	 	Notwithstanding the foregoing, the Licensee shall not enter into any
compromise, settlement or agreement with any person or entities relating
to the Shunt Reactor Technology and Know-how otherwise than with the
written consent of the Licensor.
	 
	11.	 	WARRANTIES
	 
	11.1	 	The Licensor hereby represents and warrants to the Licensee that it has
the right to license the Shunt Reactor Technology and Know-how to the
Licensee in accordance with this Agreement and such licensing does not
violate the relevant laws of the jurisdictions of the Licensor and shall
not infringe any third party rights, and that the Shunt Reactor Technology
and Know-how, and the relevant technical assistance, guidance and
training, shall be sufficient to enable the quality of the Licensed
Products to reach the specifications and standards required by this
Agreement.
	 
	11.2	 	The Licensor shall use all reasonable endeavours to ensure that the
Technical Documentation shall be readable, complete and accurate in
English. The Licensee shall notify the Licensor in writing within four (4)
months after receipt thereof if any of the Technical Documentation is not
readable, complete or accurate and the Licensor shall correct or replace
the defective portions of the Technical Documentation free of charge to
the Licensee. In the absence of a written notice from the Licensee to the
Licensor within the four (4) month period, the Technical Documentation in
question shall be deemed to have been approved and accepted by the
Licensee.
	 
	11.3	 	The Licensee and SITICO warrant that it will neither contest, deny or
dispute the exclusive right of the Licensor in the Shunt Reactor
Technology and Know-how or the validity or enforceability of the Shunt
Reactor Technology and Know-how in the PRC or any other country, nor will
they assist anyone else to do so. Each of the Licensee and SITICO agrees
that it shall not, take any action of any kind inconsistent with the
Licensor’s rights in the Shunt Reactor Technology and Know-how, and
acknowledges that nothing in this Agreement confers upon either the
Licensee or SITICO a proprietary interest of any kind in and to any of the
Shunt Reactor Technology and Know-how or simulations thereof.
	 
	12.	 	TERM AND TERMINATION

11

 

	12.1	 	This Agreement shall take effect on the Execution Date and shall remain
in full force and effect thereafter until the last day of the Effective
Term subject to Clause 2.7 unless terminated earlier pursuant to Clause
12.2 provided that if the Restated JV Contract or the Sub-Licence
Agreement or any of the Combined Coil Technology Agreements is terminated
prior to the expiration of its term, this Agreement shall automatically
terminate with immediate effect from the date of termination of the
Restated JV Contract or the Sub-Licence Agreement or any of the Combined
Coil Technology Agreements (as the case may be), except that termination
shall not affect:

	 	 	(a)	The accrued rights and obligations of the Parties at the date
of termination; and
	 
	 	 	(b)	The continued existence and validity of the rights and
obligations of the Parties under those clauses which are expressed
to survive termination and any provisions of this Agreement
necessary for the interpretation or enforcement of this Agreement.

	12.2	 	This Agreement may be terminated:

	 	 	12.2.1	 by any Party giving notice to the other Parties if another Party
has committed a material breach of this Agreement and such breach,
if capable of remedy, has not been so remedied within sixty (60)
days following receipt of such notice;
	 
	 	 	12.2.2	by any Party giving notice to the other Parties in the event that
an event of Force Majeure continues for a period of twelve (12)
consecutive months that causes the Joint Venture Company to cease
the production and sale of the Licensed Products and the Parties
have been unable to find an equitable solution pursuant to Clause
14;
	 
	 	 	12.2.3	by any Party giving notice to the other Parties if at any time
during the term of this Agreement, the government of the PRC or of
Canada or any agency thereof should require any material alteration
or modification or termination of the contractual rights or
obligations of any Party pursuant to this Agreement which has the
effect of preventing any Party from performing its contractual
obligations or from achieving its business objectives.
	 
	 	 	12.2.4	by any Party giving notice to the other Parties if another Party
becomes bankrupt, or insolvent, or is the subject of proceedings or
arrangements for liquidation or dissolution, or ceases to carry on
business, or becomes unable to pay its debts as they become due; or
	 
	 	 	12.2.5	by the Licensor giving notice to the Licensee and the Joint
Venture Company if the aggregate of the interests of the Licensor
and any of its Affiliates in the Joint Venture Company is or becomes
less than fifty percent (50%) of the registered capital of the Joint
Venture Company as a result of any change in or requirement of
Chinese law or any act of any Chinese governmental agency or court.

	12.3	 	Either Party electing properly to terminate this Agreement pursuant to
Clause 12.2 shall have no liability to the other Party for damages arising
solely from the exercise of such right.

12

 

	12.4	 	Upon expiration or termination of this Agreement, all amounts then due
and unpaid to the Licensor by the Licensee hereunder shall forthwith
become due and payable by the Licensee to the Licensor.
	 
	12.5	 	All Combined Coil Technology and Know-how, including the Shunt Reactor
Technology and Know-how and the Technical Documentation (if any has been
delivered to the Licensee), recorded in any material form including but
not limited to any written records shall be returned by the Licensee to
the Licensor forthwith upon the termination of this Agreement. The
Licensee agrees on behalf of itself and its employees that no copies of
the Combined Coil Technology and Know-how, including the Shunt Reactor
Technology and Know-how, in any material form or of the Technical
Documentation shall be made or retained upon and after the termination of
this Agreement.
	 
	13.	 	AGENCIES
	 
	 	 	The Parties arc independent contractors, and nothing in this Agreement
shall be construed to constitute any Party to be the agent, partner,
legal representative, attorney or employee of any other Party for any
reason whatsoever except as specifically set out in this Agreement. No
Party shall have the power or authority to bind the other except as
specifically set out in this Agreement.
	 
	14.	 	FORCE MAJEURE
	 
	14.1	 	“Force Majeure” means all events which are beyond the control of the
Parties to this Agreement, and which are unforeseen, or if foreseen,
unavoidable, and which prevent total or partial performance by any Party.
Such events shall include but are not limited to any explosions,
shipwrecks, acts of nature or the public enemy, fires, flood, sabotage,
accidents, strikes, wars, riots, insurrections, and any other similar
contingency.
	 
	14.2	 	If an event of Force Majeure occurs, to the extent that any contractual
obligation of any Party cannot be performed as a result of such event,
such contractual obligation shall be suspended while the Force Majeure
subsists and the due date for performance thereof shall be automatically
extended, without penalty, for a period equal to such suspension.
	 
	14.3	 	The Party encountering Force Majeure shall, within fifteen (15) days of
the relevant event, notify the other Parties and furnish valid proof of
the occurrence of such Force Majeure. Within a reasonable period
thereafter that Party shall provide the other Parties with evidence of the
Force Majeure issued by a relevant agency. The Party encountering Force
Majeure shall also use all reasonable endeavours to minimise the Force
Majeure.
	 
	14.4	 	In the event of Force Majeure, the Parties shall immediately consult with
each other in order to mutually agree an equitable solution (which may
involve early termination of this Agreement, deletion of certain
provisions thereof or extension of the term of this Agreement) and shall
use all reasonable endeavours to minimise the consequences of such Force
Majeure.

13

 

	15.	 	LIABILITY FOR BREACH

	15.1	 	(1)	The Licensee shall indemnify and hold the Licensor indemnified
against all losses, liabilities, costs, claims, actions, damages, expenses
or demands, but excluding consequential loss or loss of profits, which the
Licensor may incur, or which may be made against the Licensor as a result
of or in relation to any breach by the Licensee of its obligations under
this Agreement or arising out of any use of the Shunt Reactor Technology
and Know-how by the Licensee which is not in accordance with this
Agreement. For the avoidance of doubt the payments referred to in Clause 4
are not considered profit for the purpose of this Clause.

	 	 	(2)	SITICO shall indemnify and hold the Licensor indemnified
against all losses, liabilities, costs, claims, actions, damages,
expenses or demands, but excluding consequential loss or loss of
profits, which the Licensor may incur, or which may be made against
the Licensor as a result of or in relation to any breach by SITICO
(for which SITICO is responsible) of its obligation to perform the
payment obligations and other related commercial obligations as
agent for SITW related to the import of the Shunt Reactor Technology
and Know-how.

	15.2	 	The Licensor shall each indemnify and hold the Licensee and SITICO
indemnified against all losses, liabilities, costs, claims, actions,
damages, expenses or demands, (but excluding consequential loss or loss of
profits,) which the Licensee may incur, or which may be made against the
Licensee and SITICO as a result of or in relation to any breach by the
Licensor of its obligations under this Agreement.
	 
	15.3	 	If any of the obligations in this Agreement cannot be performed due to
the fault of all of the Parties, each party shall bear the responsibility
for breach of contract in accordance with the extent of each party’s
fault.
	 
	16.	 	SETTLEMENT OF DISPUTES
	 
	16.1	 	Any dispute or difference of any kind whatsoever arising out of or in
connection with this Agreement or any of the agreements contemplated
herein, including any question in connection with the existence,
construction, interpretation, validity, termination or implementation of
this Agreement or of any of the agreements contemplated herein, shall
be referred to and finally settled by the Singapore International Arbitration
Center (the “Center”) in accordance with the applicable arbitration rules
of the United Nations Commission on International Trade Law.
	 
	16.2	 	The arbitration tribunal shall be composed of three (3) arbitrators. The
Licensor and SITW each hereto shall be entitled to appoint one (1)
arbitrator and the Center shall appoint the third (the Chairman) who shall
not be a national of the country of incorporation of any Party. The place
of arbitration shall be Singapore. The language to be used in any
arbitration proceedings shall be English.
	 
	16.3	 	Any award made by the arbitration tribunal shall be final and binding on
all Parties, who hereby exclude any right of appeal to any court which
might otherwise have jurisdiction in the matter, and shall be enforceable
in any country which is a signatory to the 1958 New York Convention.

14

 

	16.4	 	No arbitration of any dispute or difference shall commence unless the
Parties have attempted genuinely to settle the same amicably within a
period of thirty (30) days after the date of the giving of a written
notice of arbitration by one Party hereto to the other Parties, which
notice shall describe generally the nature of the dispute.
	 
	16.5	 	The costs of arbitration shall be borne by the losing Party or Parties,
unless otherwise determined by the arbitration award.
	 
	16.6	 	When any dispute occurs and when any dispute is under arbitration, except
for the matters under dispute, the Parties shall continue to fulfil their
respective obligations (and shall be entitled to exercise their rights)
under this Agreement.
	 
	17.	 	ASSIGNMENT
	 
	 	 	The Licensor may, without the written consent of the Licensee or the
Joint Venture Company and without any further registration with the
Examination and Approval Authority, have this Agreement in whole or in
part performed by any one or more of its Affiliates, and may assign this
Agreement to any company which may become a successor of the Licensor.
The Licensor is only required to give notice to the Licensee and the
Joint Venture Company of such an assignment.
	 
	18.	 	APPROVAL AND REGISTRATION AND FURTHER ASSURANCE
	 
	18.1	 	Within thirty (30) days of the Execution Date , the Licensee and SITICO
shall file an application for this Agreement (in Chinese and English) with
the Examination and Approval Authority for registration. The Licensee and
SITICO shall bear the costs in relation to such application.
	 
	18.2	 	Immediately after the Execution Date, the Licensee shall submit the
Amendment to the Examination and Approval Authority for Approval.
	 
	18.3	 	The Licensee shall advance all necessary fees and expenses for the
Approval and shall be reimbursed for the amounts so advanced from the
funds of the Joint Venture Company, provided that such fees and expenses
are fully and properly documented, and are paid directly to the relevant
government authority and not to any service company or intermediary and
are reasonably and necessarily incurred after consultation with the
Licensor.
	 
	18.4	 	Without limiting Clause 18.1, and Clause 18.2 each Party must promptly at
its own cost do all things necessary (including executing documents and
obtaining all necessary governmental permits, licenses and approvals which
are or may become necessary under any law or regulation, now or hereafter
existing in the PRC) to enable the Parties to exercise, enforce and enjoy
all of the rights and obligations contained in this Agreement.
	 
	19.	 	NOTICES
	 
	19.1	 	Any notice or other communication provided for in this Agreement shall be
in writing in the English and Chinese languages and shall be delivered
personally or sent by telefax to the

15

 

	 	 	person, address or telefax referred to below or to such other person,
address or telefax number as a Party may specify by notice in writing to
all the other Parties:

	 	(a)	 	if to the Licensor, to:
	 
	 	 	 	Name: Trench Limited
	 
	 	 	 	Address: 71 Maybrook Drive, Scarborough, Ontario, M1V 4B6, Canada
	 
	 	 	 	Facsimile: 1-416-2987083
	 
	 	 	 	Marked for the attention of: John Finlay
	 
	 	(b)	 	if to the Licensee, to:
	 
	 	 	 	Name: Shanghai Instrument Transformer Works Co. Ltd.
	 
	 	 	 	Address: 427 Jumen Road, Shanghai, People’s Republic of China
	 
	 	 	 	Facsimile: 8621-63014591
	 
	 	 	 	Marked for the attention of: Zhang Wei Guo
	 
	 	(c)	 	if to SITICO
	 
	 	 	 	Name: Shanghai SITICO International Trading Company
	 
	 	 	 	Address: SITICO Building, 111 Jiu Jiang Road, Shanghai, China
	 
	 	 	 	Facsimile: 8621-63291824
	 
	 	 	 	8621-63291096
	 
	 	 	 	Mark for the attention of: Zhang Le Shou
	 
	 	 	 	other.
	 
	 	(d)	 	if to the Joint Venture Company
	 
	 	 	 	Name: MWB (Shanghai) Co. Ltd.
	 
	 	 	 	Address: No 3658 Jiangcheng Road, Minhang Shanghai China 200245
	 
	 	 	 	Facsimile: 8621-64637828
	 
	 	 	 	Mark for the attention of: Xu Ying

	19.2	 	In the absence of evidence of earlier receipt, any notice or other
communication shall be deemed to have been duly given:

	 	(a)	 	if delivered personally, when left at the address referred to
in Clause 19.1;
	 
	 	(b)	 	if sent by facsimile, when clearly received in full.

16

 

	19.3	 	Notices given under any of the Combined Coil Technology Agreements shall
be deemed to be a notice given under this Agreement and notice given under
this Agreement shall be deemed to be notice given under all of the
Combined Coil Technology Agreements.
	 
	20.	 	GENERAL
	 
	20.1	 	The failure to exercise or delay in exercising a right or remedy under
this Agreement shall not constitute a waiver of the right or remedy or a
waiver of any other rights or remedies and no single or partial exercise
of any right or remedy under this Agreement shall prevent any further
exercise of the right or remedy or the exercise of any other right or
remedy.
	 
	20.2	 	This Agreement shall be governed by and interpreted in accordance with
Hong Kong law.
	 
	20.3	 	This Agreement shall be written and executed in both Chinese and English
language versions. Each Party agrees that each language version is an
accurate translation of the other and that both versions carry the same
legal effect.
	 
	20.4	 	Should any Clause or any part of any Clause contained in this Agreement
be declared invalid or unenforceable for any reason whatsoever, all other
Clauses or parts of Clauses contained in this Agreement shall remain in
full force and effect.
	 
	20.5	 	This Agreement constitutes the entire agreement between the Parties
relating to the subject matter of this Agreement and supersedes all
previous agreements.
	 
	20.6	 	If there is any conflict or inconsistency between the provisions of this
Agreement and the Restated JV Contract, the provisions of the Restated JV
Contract shall prevail.
	 
	20.7	 	No variation of this Agreement shall be valid unless it is in writing and
signed by or on behalf of each of the Parties.
	 
	20.8	 	This Agreement shall be executed in six (6) originals in English and six
(6) in Chinese.
	 
	20.9	 	This Agreement, the Line Trap Technology Head Licence Agreement, the
Series Reactor Technology Head Licence Agreement are interdependent and
must be signed at the same time. Default by a party under the any of
these agreements may be treated by the other party as default under this
Agreement.

17

 

IN WITNESS WHEREOF each of the Parties hereto has caused this Agreement to be
executed by its duly authorised representative on the date first set forth
above.

TRENCH LIMITED

 

/s/ John Finlay

Name: John Finlay

Title: Executive Vice President, North America and International

Nationality: Canadian

 

SHANGHAI INSTRUMENT TRANSFORMER WORKS CO. LTD.

 

/s/ Zhang Wei Guo

Name: Zhang Wei Guo

Title: Director

Nationality: Chinese

 

SHANGHAI SITICO INTERNATIONAL TRADING COMPANY

 

/s/ Zhao Jun Bo

Name: Zhao Jun Bo

Title: General Manager

Nationality: Chinese

 

MWB (SHANGHAI) CO LTD

 

/s/ John Finlay

Name: John Finlay

Position: Authorised Signatory

Nationality: Canadian

18

 

SCHEDULE 1

LIST OF LICENCED PRODUCTS AND MAIN CONTENTS OF TECHNICAL DOCUMENTATION

	1.	 	Licensed coverage
	 
	 	 	Dry type air core coil technology for Shunt reactors up to 69KV.
	 
	2.	 	Main contents
	 
	2.1	 	Design & Know How
	 
	 	 	Complete designs and know how for the entire range according to IEC &
ANSI standard, such as:

	 	(1)	 	Design Software — Electrical & Mechanical
	 
	 	(2)	 	Design Costs — Material & Labour Hours
	 
	 	(3)	 	Standard labour hours
	 
	 	(4)	 	Standard parts drawings
	 
	 	(5)	 	Typical drawing for one specific rating of each

	2.2	 	Technical documentation, such as:

	 	(1)	 	Manufacturing Procedures
	 
	 	(2)	 	Material Specifications
	 
	 	(3)	 	QA Manual
	 
	 	(4)	 	List of required manufacturing equipment
	 
	 	(5)	 	List of required routine test equipment
	 
	 	(6)	 	Welding standards
	 
	 	(7)	 	Test & Inspection Plan
	 
	 	(8)	 	Incoming material inspections and tests
	 
	 	(9)	 	In-house quality test procedures
	 
	 	(10)	 	Inspection standards
	 
	 	(11)	 	In-process and final test procedures

19

 

	 	(12)	 	The drawings for main tools & equipment and operational
procedures for assembling.
	 
	 	(13)	 	Measures for quality assurance
	 
	 	(14)	 	Completed test items (incl. type test & routine test) and
procedures
	 
	 	(15)	 	The list & specification of test equipment for routine tests,
requirement on testing equipment and testing circuit, etc.
	 
	 	(16)	 	Other necessary documentation

20

 

SCHEDULE 2

EMPLOYEE CONFIDENTIALITY AGREEMENT

I                      [name], [position] of
Transformer Shanghai Instrument
Transformer Works (“SITW”) [or MWB (Shanghai) Co., Ltd. or name of
subcontractor] (“Employer”) hereby represent, warrant and agree to keep
confidential the Combined Coil Technology and Know-how, the Technology
Sub-Licence Agreement, dated [ ] between SITW, Trench Limited (as “Contractor”)
and MWB (Shanghai) Co Ltd (the “Joint Venture Company”) and the Line Trap
Reactor Head Licence Agreement, Shunt Reactor Technology Head Licence Agreement
and the Series Reactor Technology Head Licence Agreement all dated [ ]
between Trench Limited, SITW, Shanghai SITICO International Trading Company and
the Joint Venture Company, , Technical Documentation and all other information,
technical data or know-how as follows:

	1.	 	During the term of my employment with the Employer and after the
termination thereof, I shall not, unless expressly required by law or a
court order in the PRC, directly or indirectly, disclose by any means to
any person, firm, enterprise, corporation or government agency or
organisation in or of the People’s Republic of China or any other country,
any information, whether in oral, written, pictorial, graphic or recorded
form, concerning the design, manufacture, application, inspection,
testing, maintenance, packaging, marketing or sale of the Combined Coil
Products or any part of them or any other relevant information which may
come to my knowledge or possession or be disclosed to me by the Joint
Venture Company or Trench Limited because of or as a result of my
employment by the Employer (hereinafter collectively referred to as the
“Confidential Information”).
	 
	2.	 	Without limiting in any way the foregoing agreement and obligation, I
hereby agree that all printed, written, recorded or other materials
containing or relating to the Confidential Information, prepared by me or
which comes into my possession or knowledge during my employment with the
Employer, are and shall remain to be the property of the Joint Venture
Company, the Contractor or SITW (as the case may be), and, if requested by
the Joint Venture Company, the Contractor or SITW or upon the termination
of my employment with the Employer, all such materials, including all
prints, copies or duplicates thereof, shall be either disposed of or
returned to the Joint Venture Company or the Contractor in accordance with
the Joint Venture Company’s, SITW’s or the Contractor’s instruction.
	 
	3.	 	In consideration of the disclosure to me of the Confidential Information,
I further agree that I will not, following termination of my employment
with the Employer, directly or indirectly, engage in the manufacture of
the Combined Coil Products or any part of them by making use of the
Confidential Information.
	 
	4.	 	I enter into this Contract with the express purpose and intent that
either the Joint Venture Company, SITW and the Contractor derive benefits
either herefrom, and I further understand and acknowledge that SITW, the
Joint Venture Company [name of subcontractor] and the Contractor or any of
them, shall have the right to enforce this Contract against me should I be
deemed to have violated this Contract in any manner.

21

 

Terms defined in the Technology Sub-Licence Agreement shall have the same
meanings when used in this Agreement.

 

Signed this                      day
of                     , 2002.

 

Name:

Position:

22

 

This Confidentiality Agreement is for the benefit of the undersigned:

 

TRENCH LIMITED

 

Name:

Position:

 

MWB (SHANGHAI) CO LTD

 

Name:

Position:

 

SHANGHAI INSTRUMENT TRANSFORMER WORKS CO., LTD.

 

Name:

Position:

23

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00048-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00048-of-00352.parquet"}]]