Pursuant to the SPA, NTIH has guaranteed to TWPH that the net profit after tax of Alliance Print Technologies Co. Ltd (“APT”) derived from activities conducted in the ordinary course of business of APT for the three (3) financial year(s) ended (“FYE”) on 31 December 2008, 31 December 2009 and 31 December 2010, based on the audited accounts of APT (as adjusted below) (“NPAT”), for such financial years, will be USD1,800,000, USD2,000,000 and USD2,200,000 respectively (“NPAT Target”). In the event that the NPAT Target is not achieved in any financial year, NTIH had agreed that it shall pay to TWPH, within 30 days from the date of presentation of the relevant audited accounts of APT to NTIH, any difference between the NPAT and the NPAT Target for that financial year.

In determining the NPAT, inter-alia, the gross profits attributable to:

(i) any and all business transferred or sub-contracted from TWPH’s existing group of companies to APT; or

(ii) any and all businesses with or which is in connection with sales to the largest gravure printing customer of TWPH at the date of the SPA,

shall be excluded from the calculation of the NPAT. The costs attributable to the above businesses, on the basis of proportion of turnover, shall be excluded.

Pursuant to the Supplemental Agreement, TWPH and NTIH have agreed that the following elements are to be included by way of an addition to and not a subtraction from the NPAT for the FYE 31 December 2009 and 2010:

(i) gross profits that are attributable to all business that is transferred from APT to all companies within the TWPH Group on the basis of proportion of turnover;

(ii) any discount on the sub-contracting price by Max Ease International Limited (“MEIL”), a subsidiary of TWPH, to APT in respect of all businesses that are sub-contracted by MEIL to APT; and

(iii) gross profits that are attributable to all businesses that should have been directed to APT in the first place, but are then diverted by MEIL directly to Toyo (Viet) Paper Product Co. Ltd, a wholly-owned subsidiary of TWPH, based on a decision by TWPH to refuse such businesses for APT for reasons that may include insufficient production capacity on the part of APT.

Subsequent to the Acquisition, TWPH had on 1 July 2008, announced the acquisition of Anzpac Services (Australia) Pty Limited (“Anzpac”) which was approved by TWPH’s shareholders in the EGM held on 29 October 2008. The acquisition of Anzpac came with the award of the supply agreements (“Supply Agreements”) to supply printed carton requirements for Tobacco Importers and Manufacturers Sdn Bhd (“TIM”), a subsidiary of British American Tobacco (Malaysia) Berhad and other companies within the British American Tobacco Plc group of companies. Due to the increase in orders from the Supply Agreements, TWPH had subcontracted a significant amount of orders from TIM to APT as APT has the required facilities and machinery to meet these orders and as the factory under Tien Wah Press (Malaya) Sdn Bhd, a wholly-owned subsidiary of TWPH was having capacity constraints.

As a result of these sub-contracted works, APT’s factory was operating at full capacity and was unable to accept other printing orders. The orders that APT could not accept due to capacity constraints were allocated to other companies within the TWPH Group instead. This arrangement allows TWPH Group more flexibility to fulfil its orders and manage the production output of its factories.

As set out in the SPA, the sub-contracted works for the supply of printed cartons to TIM is excluded from the NPAT for the purposes of computing amount payable pursuant to the profit guarantee. However, had the orders from TIM been allocated to other companies within the TWPH Group which may result in lower efficiency and inability to meet the delivery deadline for TWPH Group, APT would have been able to accept other printing orders. The profits earned from such business would not have been excluded from the computation of the NPAT.

Accordingly, the Proposed Variation is to reflect a more equitable computation of the NPAT to also provide for the inclusion of profits from the transfer of business out of APT, which would have been profits earned by APT.