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Reference is made to the announcement dated 25 September 2002. AmMerchant Bank Berhad (AmMerchant Bank) (formerly known as Arab-Malaysian Merchant Bank Berhad) on behalf of the Board of Directors of Engtex, wishes to announce that, on 10 December 2002, the Company and Ultimate Target Sdn Bhd (Ultimate Target) (collectively the Parties) had entered into a supplemental agreement to the Share Sale and Purchase Agreement dated 25 September 2002 (SPA) with the vendors of Linear Solid (i.e. Lee Geok Ai and Law Seong Chye (collectively the Vendors)) to vary certain terms contained therein the SPA.

The above supplemental agreement to the SPA (SSPA) was entered into pursuant to the execution of a supplemental agreement between Linear Solid and Suasa Unik (M) Sdn Bhd (Receiver and Manager Appointed) (herein referred to as SSPASU) on the evendate, to amend the terms of the sale and purchase agreement between Linear Solid and Suasa Unik dated 9 August 2002 (SPASU) in relation to the acquisition of the Assets, which comprise the following:
(i) a piece of leasehold industrial land held under H.S. (D) 15633 for Lot No. 46479 in Mukim Sungai Karang, Daerah Kuantan, Negeri Pahang together with the buildings erected thereon (collectively the land and the building is referred to Property); and

(ii) plant and machinery, ancillary equipment and stocks (Other Assets).

The salient terms of the SSPASU are, inter-alia, as follows:

(a) Linear Solid is to complete the purchase of the Other Assets upon payment in full of the balance 90% of the purchase price for the Other Assets, which is due upon execution of the SSPASU (the Take-over Date);

(b) For the period commencing on the seventh(7) working day after the Take-over Date and until the completion of the sale and purchase of the Property of the SPASU, Suasa Unik will grant to Linear Solid free and unlimited access to the Property to carry out, inter-alia, the various repairs, refurbishment and testing activities on the Other Assets;

(c) Linear Solid agrees that even though the sale and purchase of the Other Assets have been completed on the Take-over Date, Linear Solid will not remove any of the Other Assets from the Property, save and except for the removal of stocks or raw materials and the pipes of various stages of completion; and

(d) In the event the SPASU is terminated for any reasons whatsoever and/or in the event the sale and purchase of the Property is not completed for any reasons whatsoever, both parties agree that Linear Solid will remove the Other Assets from the Property within thirty(30) days upon Linear Solids receipt of the notice thereof from Suasa Unik.

Pursuant to the SPA, the Vendors have agreed to sell and the Parties have agreed to purchase the entire equity of Linear Solid comprising 1,500,000 ordinary shares of RM1.00 each (Sale Shares) for a total consideration of RM1,500,000 (the Purchase Price).
The salient terms of the SSPA are, inter-alia as follows:
a) the balance 90% of the Purchase Price of RM1,350,000 will be paid by the Parties to the Vendors upon the execution of the SSPASU; and

b) Completion of the Proposed Acquisition will be effected upon, inter-alia, the payment in full of the balance sum by the Parties to the Vendors.

The supplemental agreements have been executed to enable Engtex to complete the acquisition of Linear Solid, and for Linear Solid to complete its acquisition of the Other Assets prior to the perfection of the transfer of the Property, which may take some time to complete.

The execution of the abovementioned supplemental agreements is not expected to have any effects on the issued and paid-up share capital, major shareholders shareholdings in Engtex, earnings and NTA of the Group for the financial year ending 31 December 2002.

The Directors of Engtex after careful deliberation on the SSPA, are of the opinion that the execution of the SSPA is in the best interest of the Engtex Group.

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